Do the projects you take on align with your overall business and growth strategy?

Over time, projects can lose direction. Once profitable projects lose their edge, and long-term bets sometimes fall flat.

That’s where portfolio project management comes into play.

While nobody can predict the future, that won’t stop a good project portfolio manager from trying.

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What is portfolio management?

Portfolio management is the selection and maintenance of investments that are going to match an organization’s risk tolerance and help it to meet its strategic goals.

To be honest, the term “investment” can be used pretty loosely, here.

For example, you might oversee financial investments in the form of stocks, bonds, or a mutual fund (that’s the more traditional definition you’ll hear).

In business terms, an investment could also be an asset like a new headquarters, a big project or initiative, financial resources, or even somebody’s valuable time.

What’s the goal of portfolio management? To balance your risks and rewards.

Project portfolio management (PPM) is the management of the processes, methods, and technologies used by project management offices as well as project managers in order to analyze and collectively manage proposed projects based on several distinct characteristics.

Every organization has a mission and vision. The mission encompasses what that organization does day-to-day, along with its objectives and approach. The vision is where the organization sees itself a few years or a few decades from now.

Often, that future vision is an enhancement of an organization’s current way of doing business or its position in the market. No matter the reason, an organization has to take action to materialize its vision. Perhaps they need to develop technology, change up their product mix, or hire people.

The restructuring and changes come by way of developing a group of initiatives we call a portfolio. 

These initiatives are often projects or large-scale programs deployed with the aim of reaching their strategic vision.

Often an organization decides on a strategy, and it’s up to the portfolio manager to select the programs and projects that will deliver results that align with said strategy.

Some everyday use cases for PPM are:

  • Identifying potential project returns
  • Forecasting risks
  • Facilitating communication
  • Obtaining stakeholder buy-in

Now that you know what project portfolio management is, it’s time to dig into the purpose…

Why do we need project portfolio management?

The goal of project portfolio management is balancing risk and reward. Your strategic objectives revolve around selecting the right projects that satisfy the long-term strategic goals of your stakeholders.

In financial terminology, project portfolio management is a lot like hedging, which is just a fancy term that means offsetting your potential losses.

A great example of hedging is buying insurance—spending money each month for a service that protects you if you ever get sick or into a car accident.

Ultimately, project portfolio management helps you and your team keep stakeholder strategy and big-picture objectives top of mind.

What are the main differences between project management and portfolio management?

Portfolio project management focuses on project selection while project management focuses on task breakdown.

When combined, it’s ultimately doing the right projects right, which sounds great in theory.

Where it gets complicated is in the execution. 

The line between portfolio management and project management is often blurred, as people attempt to do both under the heading of centralized management.

Portfolio management view focuses on portfolio status, investment, risk, valuation, and satisfaction, while with project management, the focus is more granular.

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The 5-stage project portfolio management process

The following phases encompass what a typical portfolio management process goes through from the beginning all the way to monitoring.

You’ll notice there’s no closure stage like that found in the project lifecycle. Unlike projects, portfolios can go on indefinitely, as new projects and programs are added.

1. Decide on strategic goals and objectives

Coming up with strategy objectives requires asking yourself the right questions:

  • What strategies and investments have the greatest reward?
  • Which of them have the greatest risk?

Breaking down the costs and benefits associated with each option makes it easier to develop a strategy map outlining your objectives and top priorities.

Now that your strategy map is in place and you’ve got in an actionable list of projects, it’s time to assemble an implementation team full of technical staff and portfolio managers.

Ideally, you’d appoint a governing body composed of senior stakeholders or senior managers to keep tabs as well.

2. Research potential projects

Take inventory of your current project list and identify and categorize growth, survival, completed, and canceled projects.

As you sift through them, take the time to consider whether some projects should cease operations or combine with other projects to increase efficiency.

From there, make time to analyze the current state of your project portfolio and ask yourself:

  • What are its strengths?
  • What are its weaknesses?
  • What opportunities are ahead?
  • What risks may you encounter?

Our SWOT analysis template can help with this.

Evaluate all projects based on potential ROI, resource allocation, milestones, and reporting schedule.

3. Narrow your project list

Project selection is made considerably easier thanks to the data you collect in the previous 2 stages.

The ultimate goal of project prioritization and selection criteria is to devise a tentative portfolio that maximizes return and balances risk.

Here are some useful risk analysis methods worth considering:

  • Ranking Method: 1-10 scale based on important metrics like rate of return, stakeholder benefits, resource allocation, and capacity planning.
  • Scoring Model: similar to the ranking method but with weight added to metrics that may have greater importance like strategic alignment, risk, and ROI.
  • Analytic Hierarchy Process: an advanced approach that pits all criteria against each other in an apples-to-apples fashion that prevents error or bias.

4. Portfolio validation

Set aside time to expand on the high-level data gathered in previous steps to create a realistic view of the necessary resources to complete your projects.

Are they all feasible considering your available resources and current capacity?

It’s also an excellent time to put contingency planning into action. Anticipating potential setbacks and how you’ll handle them should they arise can save you future headaches and give you peace of mind now.

You’re now ready to commit resources to projects and take the next step toward implementation.

5. Manage and monitor

As projects launch, they’ll need resource management and oversight.

The project portfolio manager regularly assesses performance and makes adjustments as necessary in real-time.

Adjustments can include reallocating resources, rescheduling projects, re-scoping, and reviewing the portfolio in its entirety.

It’s in the management and monitoring stage that a reliable PM tool becomes absolutely necessary (not that it wasn’t before, of course).

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Project portfolio management tools

As you can see, project portfolio management is both complex and high-impact.

Project portfolio management keeps everyone on the same page and ensures nothing slips through the cracks and that business objectives are met.

However, a strategy is only as good as its implementation and the PPM tool you use.

If you haven’t already, then it’s time to ditch the whiteboards, sticky notes, and legal pads and invest in project portfolio management software.

What is project portfolio management software?

So we’ve been talking a lot about the benefits of project portfolio management. Now, it’s time to take a look at how the right software can take your project portfolio management to the next level.

Enter project portfolio management software, the moat efficient way to manage your entire project portfolio in one place.

monday.com's portfolio management template

With the right PPM software, project portfolio management becomes much more efficient. So let’s take a look at what project portfolio management software can do:

  • Creates transparency: with project portfolio management software, everyone has access to all the information about the project portfolio. It’s clear to see who’s working on what, how tasks are progressing, and if each project in the portfolio is contributing to the overall business strategy.
  • Improves decision making: the right software allows project portfolio managers to make effective business decisions about their project portfolio. For example, saying “no” to certain projects that don’t quite fit the bill.
  • Makes sure that strategy and project execution are aligned: using portfolio management software, you can easily see if the work that’s being done is definitely aligned with the company strategy. And it saves you having to review each project manually to figure this out.

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How can monday.com improve your project portfolio management?

So how does monday.com fit into all this?

We don’t want to brag, but monday.com’s versatile and intuitive interface is perfect for project portfolio management.

With our platform you can build the ideal PPM system for your business — in fact, not only will you be able to effectively manage your project portfolio with monday.com, but you’ll also be able to manage your entire work operations.

Okay, so maybe we do want to brag. But it’s only because our software is worth bragging about.

Now let’s take a look at some of the specifics that make monday.com the perfect platform to improve your project portfolio management:

  • The people column: with monday.com, you can easily see who is in charge of each project portfolio (and who’s in charge of each individual project). This provides users with a way to quickly identify the go-to person for more detailed information about the current performance.

Alt text: monday.com allows users to easily see who's in charge of which project

  • Flexible views and layout: can’t decide how best to display your project portfolio? Don’t worry — with monday.com, you’ve got the option to choose from a variety of views and layouts.

monday.com allows users to choose which view or layout is best for their project

  • Easy to collaborate: when it comes to project portfolio management, it’s likely that various teams from different departments will be working together. With monday.com, these teams can easily collaborate and work together. Whether that’s adding a comment to a task, or sharing a file, collaboration is a piece of cake with monday.com.

Building a project portfolio creates strategic alignment

High-level ambitions and advanced strategy shouldn’t be left to spreadsheets, sticky notes, and a legal pad.

Portfolio project management deserves a true work management platform that allows PMOs to strategize, track, and deliver their best work.

monday.com checks all the boxes and delivers best-in-class functionality and support so you can rest assured that you’ve always got a pulse on your portfolio.

You won’t quite be on a soothsayer’s level who’s accurately predicting the future, but you’ll be closer than ever before with monday.com in your corner.

Get started with monday.com’s project portfolio management templates today, no credit card required!

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