According to Max Wideman, author of A Management Framework for Project, Program, and Portfolio Integration, the project portfolio life span consists of the following steps:
1. Identification of needs and opportunities
2. Selection of best combinations of projects (the portfolios)
3. Planning and execution of the projects (project management)
4. Product launch (acceptance and use of deliverables)
5. Realization of benefits
Many organizations focus only on Step 3, which involves the planning and execution of projects. However, from a project portfolio management point of view, the focus should be placed on the entire process and not on a single step.
Let’s talk about each step and then discuss how the entire process fits together to deliver the best value for an organization.
First, ideas, opportunities, and needs are evaluated based on a predetermined screening process. This screening process starts with the creation of your organization’s mission, vision, strategy, goals, and objectives. Once the baseline is established, the ideas, opportunities, and needs are measured against the baseline. Do these new ideas align with corporate strategy? Will solving a defined need improve the value proposition for your business?
Second, once an idea is validated, it continues through the screening process in order to create the best combination of projects for the company. Which of the many good ideas should the organization pursue? Which of all the opportunities will provide the most value for the organization? In this stage, the ideas, opportunities, and needs identified in Step 1 are put through an additional filter to select the best projects for the portfolio. This concept phase weeds out the good projects in order to select the best projects.
Third, now that a portfolio of projects has been selected and evaluated, it is time to start planning and executing on the projects. At this point, project managers will identify the individual tasks of the project, create a Gantt chart, allocate resources, and oversee the completion of the project. This project management phase is normally where most of the focus is placed due to the time and money involved in making sure that the project is delivered as specified.
Fourth, once the projects have been completed, it is time to launch the product or service. Whether the product is a new piece of software or a new building, the Sponsors of the individual projects need to accept and then use the deliverables of the projects. Did the projects satisfy the predetermined objectives or were they over budget and late? This is the time to reflect upon the projects themselves. Did the organization receive the benefits that it intended to receive?
Fifth, realize the benefits of the projects. Assuming that the projects were successful, now is the time to sit back and reap the benefits of the hard work. The company should be seeing a positive ROI from the portfolio and hopefully hand out bonuses to all of the executives, project managers, and project teams that worked together to produce a great product.
Of course all of this sounds a lot easier than it actually is. Managing the entire process and keeping everybody in the loop can be as challenging as executing on any one of the above tasks. How do you keep the birds eye view while being in the trenches at the same time? How does the Team Member know the objectives of the Planning Committee? What if something goes wrong? Is there a process in place to fix the problem? At what point does a “good” project become a loss? And finally, is there a tool that can be used by the Planning Committee, the Project Managers, and the Team Members that can facilitate this process?
The answer to these questions can be complicated and deserve their own articles, but suffice it to say that it can be done and organizations that learn how to do it will be more effective, innovative, and competitive.
