Project portfolio management is the hottest topic in the PM workspace. At one time, the term “”portfolio management”” simply meant managing multiple projects at once. The old term “”multi-project”” management referred to doing critical path and resource analysis and reporting of multiple projects grouped
together. Today, the term often has an expanded meaning to include the authorization process of the projects themselves.
We all know the statistics on failed projects, but I’ve long held that half the battle in improving these statistics is in affecting which projects are chosen in the first place.
If you’re a project manager, you might think you have no influence when it comes to choosing projects, but nothing could be further from the truth. Implementing a project approval process or “”gated”” approvals is the kernel of project portfolio management and it’s almost always initiated by the project office. Let’s start with the basics.
Establish an approval flow for new projects. The first phase or “”gate”” could be the authorization to create a detailed plan. This makes some sense as creating a detailed plan takes effort and/or money, and expending effort is almost always approved by someone. It involves creating a simple form -— online or on paper — in which some basic criteria are established, such as expected return on investment and alignment with business objectives.
Once the plan is created, it might have to be attached to a form with identified risks, bottom-up estimate of schedule, effort and costs. The combination would provide a baseline from which to measure if the project passes this approval. Being approved through this second “”gate”” might allow the project to begin. Approval might include a calculation of return on investment based on the updated schedule and costs.
Regular reviews of the project status could be implemented in the same fashion, allowing the project to be constantly evaluated against a dynamic economy and changing business conditions.
A simple gated approval process can make a tremendous difference in a number of different ways. First of all, just going through the process identifies risks and assumptions that might otherwise be ignored. Management might have an assumption that a new product could be developed within a certain amount of time and for a certain amount of money. The ground-up estimate might show that the product can’t make it to market in the time required to pay back the results expected. Another
common assumption is that key skilled personnel will be available when we need them, but in the high-tech world there are often a very small number of personnel that are so key they can form a bottleneck to new project schedules. Doing a skills assessment in our baseline and comparing it to existing projects will likely reveal the problem.
Chris Vandersluis is president of HMS Software. Chrisv@hmssoftware.ca