By George Pitagorsky | Follow on Twitter!

Projects and operational activities are the engine of any organization. Projects create change and operations - sales, manufacturing, delivery, support - sustains the ongoing process.

At the top of any organization, the "C" Level, the executives are responsible for project portfolio management (PPfM). Project portfolio management consists of decisions to assess, prioritize, initiate, sustain and end projects to make optimal use of resources. Making optimal use of resources means delivering value to the organization - increased profits, lower costs, increased effectiveness, reduced risk - while ensuring that operations are not unnecessarily disrupted. PPfM takes a long-term view – 2, 3, 5 years or longer, depending on the organization and its management style.

A Complex Process

PPfM seems straight forward:

  1. 1) Set up a PPfM process using a tool set like Project Insight
  2. 2) Identify all the work (projects and operations, alike) being done in the organization, all the resources performing it and available funding
  3. 3) Receive project ideas
  4. 4) Assess them and compare them to other project ideas
  5. 5) Decide which ideas are worth pursuing
  6. 6) Prioritize them based on their relative value propositions, among other factors
  7. 7) Schedule them with respect to resource availability and other constraints

In reality it is a challenging effort to plan in the face of VUCA

  • Volatility: A continuous flow of project ideas, changes to resources and available budgets, and in process projects that do not perform according to initial assumptions and expectations
  • Uncertainty: Internal and external circumstances beyond the control of even the CEO
  • Complexity in the form of the interplay between technology, business process, human responses and the impact on operations and project performance
  • Ambiguity regarding goals, values, objectives, opinions and the current state of project performance. There are differences of opinions among decision makers, imperfect communications, a lack of data

Focus on the Data and Information

While we may not be able to make portfolio management simple and 100% accurate, we can reduce the overall impact of VUCA.

We can minimize ambiguity and uncertainty by better managing data. As portfolio, program and project managers, the data we have most influence over is project data. That becomes the ‘C-Level Currency’ because it helps organizations to make better decisions and become more profitable.

Let’s be clear. Data is the raw material. Information is really what gives executives and others involved in portfolio management the edge they need to make effective recommendations and decisions.

Information is meaningful data. Data itself is simply facts and figures. For example, it may be a fact that a task is running late by x days but it is not really of use as information unless it is interpreted in terms of its impact on project schedule and budget. The challenge for portfolio managers – the people who advise and administer the portfolio management process managers – is to make sure that program and project managers provide useful data and that it is communicated to the decision makers as decision support information.

Project Data Starts with The Plan

If project objectives and their relationship to business objectives are clear, ambiguity can be minimized. Uncertainty can be reduced if the plan includes clear definition of task deliverables, dependencies among tasks, resource allocations and risk related elements like buffers and the probabilities of meeting expectations. With a robust plan, it is more likely that the data about what tasks are running late or over budget can be used to enable the analysis that will result in useful information – for example the impact of slippage or change in resources on the project end date.

If the plan is structured so that tasks roll up into meaningful higher-level activities, it is more likely that information can be given to decision makers at a level of detail that is meaningful to them.

Portfolio Management Needs Information

Individual project plans must be rolled up into a portfolio level view, the portfolio plan, that shows the relationship among projects and resources and lays out their sequence as a schedule.

In the context of portfolio management, what matters most is the impact of new projects and individual project progress (and, the lack of it) on the portfolio plan, with emphasis on the value to be gained by the organization from completion of projects.

Portfolio management sessions are NOT forums for addressing project specific performance. The decision makers may choose to focus on individual projects to make go/no-go decisions, but the primary interest is about:

  • Value to the organization
  • The big picture showing the interplay among projects and resources
  • How the insertion of new projects and changes in the expected costs and durations of existing projects effect the portfolio plan
  • Risk and uncertainty

To provide the necessary information, it is necessary to have a systematic method for project planning, monitoring and control during project life and for aggregating project information into a portfolio level view.

At the project level, you need

  • Meaningful benefits, cost and risk estimates
  • Up to date time, effort and spend per task, at a reasonable level of detail
  • Current resource availability
  • Accomplishments achieved
  • Estimates to completion

Portfolio administrators work with project and functional managers to interpret project data and transform it into the information the decision makers need. This is enabled by the use of integrated project and portfolio management tools, discipline to keep plans up to date and to report progress candidly at a meaningful level of detail.


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ABOUT THE AUTHOR: George Pitagorsky, PMP, integrates core disciplines and applies mindfulness meditation and people centric systems and process thinking to achieve sustainable optimal performance. George authored Managing Expectations: A Mindful Approach to Achieving Success, The Zen Approach to Project Management, Managing Conflict in Projects and PM Foundation. He is a senior teacher at the NY Insight Meditation Center.

Online 6/1/2017
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