What is project porfolio management? When do you need it and how does it differ from multi-project management and program management?
Project portfolio management, PPM for short, is the continual planning, prioritizing, overall management and monitoring of all projects in an organization or self-contained part of an organization. The projects within a portfolio may compete with each other. The goal of portfolio management is to select and execute the right projects for carrying out the company strategy. Project portfolio managers are responsible for minimizing risks and planning resources across projects.
The Standard for Portfolio Management:
The term project portfolio management is increasingly replacing the term (strategic) multi-project management, which is mainly used in German-speaking countries. In 2008 the Project Management Institute (PMI®) published the “Standard for Portfolio Management”, which contributed to the term’s being more widely used in English. In 2011, the British Office of Government Commerce (OGC) published another guideline entitled “Management of Portfolios”, or MoP® for short. Since 2013 the German norms DIN 69909-1 and DIN 69909-2 have described basic principles, processes and process models for “Multi-Project Management – Management of Project Portfolios, Programs and Projects” In 2015 the norms were supplemented with parts 3 “Methods” and 4 “Roles”.
Multi-project management refers to the planning, comprehensive control and monitoring of several projects that do not necessarily belong together. Conflicts between individual projects (e.g. about resources or goals) should be balanced. In this respect, multi-project management connects the management level with the project level. In comparison to portfolio management, the focus is not necessarily on the implementation of the overall strategy of an organization, but rather on the coordination and control of the jointly managed projects. Multi-project management is often used as a generic term for program and portfolio management.
Program management is the initiation, planning, monitoring and controlling of several content-related projects that serve a common, overall goal. A program is limited in time. Project portfolio management is usually not limited in time. It serves to continuously economically optimize conflicts and dependencies between projects. Program management is formally located one level below the portfolio.
Because more and more projects are being carried out agilely, agile principles must be used across projects and at a higher level. Agile portfolio management means proceeding with iterations and increments even at the portfolio level. While classic project management designates budgets annually and specifies the framework and goals for project implementation at the operational level, in agile portfolio management decisions are made at levels that ensure the operational implementation of the strategy. To achieve this, this level must participate in the definition of strategic corporate goals, always have them present and want to implement them independently. To achieve this, this level must be involved in the definition of the strategic company goals, always keep them in mind and be willing to implement them autonomously.
Agile portfolio management:
Lean Portfolio Management (LPM) is a triad of terms used in Dean Leffingwell’s Scaled Agile Framework®, SAFe®. It is a new type of portfolio management characterized by a strategy for and financing of so-called value streams, agile, iterative working methods and lean management with a focus on continuous improvement.
Lean Portfolio Management differs from classical project portfolio management in these ways:
While traditional project portfolio management involves allocating resources to implement concrete plans that are expected to produce specific results, lean portfolio management focuses on assigning resources to a fixed team (the so-called team of teams) so that it can use its resources to implement initiatives. The resulting solutions are continuously evaluated for their value creation.
