Kapcsolat
The importance of project portfolio management (PPM) with business added value is being recognised by more and more companies, which is why its use is increasing in Hungary, furthermore in our opinion is PPM is indispensable in the life of successful companies. And we would like to support this with the latest episode of our PMO Klub Podcast, where we talked to Daniel Molnár, portfolio manager consultant at MVM Group, about the importance of project portfolio management, its operation and areas of application. And now we summarize the most important lessons for you!
It is not enough to do projects well
You also need to know how to do projects well. To do this, it is essential to have a good PPM system and a PMO (project management office) within a company. But what exactly do these systems need?
The solution to these needs can be project portfolio management, which provides high-level coordination of projects and follows them through from planning to measurement. The PPM system thus ensures informed management decision-making, enabling the efficient allocation and use of development resources in the organisation.
To use Dani’s forest analogy, if the project is the tree, then the portfolio is the forest and the PPM is the forest manager who conscientiously looks after the forest.
And what is the relationship between PMO and PPM? In general, the PMO is part of the PPM. And the PMO may also deal with project management, resource management and many other disciplines in addition to project portfolio management.
And what is the relationship between PMO and PPM? In general, the PMO is part of the PPM. And the PMO may also deal with project management, resource management and many other disciplines in addition to project portfolio management.
Does your company already need it?
If you want (or if anyone in management wants) to get a better view of investment spending and projects, it’s already worth getting a designated person or even an organisation to get the PMO up and running. For a few tens of projects, it may be justified to implement a PPM system in an organisation, but for 50-100 projects it may be necessary.
Do the loudest projects usually win resources in your company?
The PMO can help you in this case too in the following ways:
First, by introducing control points in the project lifecycle that both bring transparency to the management of projects and prevent the loudest project owner from winning resources.
A common set of concepts and terms can be applied to the management of development activities in the organisation.
It may be helpful to have a common set of planning and reporting principles, expectations and forms for all project activities and to require users to use them. In addition, it is also important that the management of the portfolio and the central coordination of project resources is a function that the PMO itself should take on.
In addition, it may be possible to outsource the control of the use of project resources to a separate senior management body, including the most vocal project owner or even the most silent. The point is to involve several managers who are independent of the project, so that transparent decisions can be made.
Managing projects and programmes and mapping the processes in a single IT system is a good way to ensure that projects are managed according to a common methodology.
A multi-level authorisation framework for the use of project resources, including a multi-gate resource allocation system, should be established.
Excel excluded
Although we often hear that Excel is now the world’s silver bullet, if we look at it as a portfolio management tool, we have to admit that it is no longer a ball-breaker for a project portfolio of tens of hundreds of projects. But then, what level of tool is needed for good portfolio management?
The Danis had just launched their new professional PPM IT application on the day of the interview, and the innovation had been preceded by extensive research, during which they had observed that while there are good opportunities for custom development, the really good solutions are in the boxed product area, so anyone who is about to implement PPM or is thinking of replacing an existing system should look at the boxed product market.In a process that takes roughly three to four months, we can tailor such a system to our own organisational needs and then start the subsequent implementation and training.
It is important that the organisation accepts the new system for reporting and measurement. Also, it is essential for these IT applications that the business application host is PM itself, and that we impose a uniform mandatory management of this at the enterprise level, to ensure that we can manage our portfolio in a transparent way.
While any change can be difficult, in the long run it is definitely worth implementing a professional PPM IT application, as it is a great way to measure progress and budget variances in projects. This makes it much easier to spot any slippage.
The actors of a well-functioning PMO system
It is important to have clearly defined actors in the PMO system. For example, the project manager, the claim manager, the business claim manager, the project sponsor, are all indispensable actors in a well-functioning PMO system.
It is also essential to have dedicated functions in the central PMO, such as portfolio coordinators who liaise with and collect information from the claim holders or project managers. There are also project analysts, who examine the portfolio, carry out analyses, filter out data inconsistencies and, not least, produce nice reports for management.
I could mention a lot of other roles, the PMO application manager responsible for IT support, or if the PMO is also responsible for preparing and managing projects, business analysts, project controllers. Everyone has an important role to play in the life of a well-functioning PMO. Other participants are for example project sponsors or senior management forum participants. If one is trying to run a resource management, the resource owners, resource managers, dedicated schedulers, cost estimators, or project procurement people are the ones who still help projects to move forward.
Give it time!
The extent to which an organisation supports a project culture depends mostly on the PMO, who is responsible for ensuring that the organisation’s culture supports portfolio management. Rules and definitions are easy to create and put in place, but it takes time to get them accepted by the organisation.
In this process, we need to support the organisation on an ongoing basis, for example by organising various forums where we present our process, the way our own organisation works and give concrete examples to those involved, which will give them a better understanding of how we work and where they fit into the whole of project management.
For example, Dani and his team managed to introduce and embed this kind of organisational functioning in two or three years and have been developing their project culture ever since:
“Support from senior management is important, but we also need to make sure that we are accepted in the organisation and that we can become more integrated into the life of the organisation as we do more essential tasks.”
Did you find the above information useful and want to delve deeper into the world of project portfolio management? Then listen to the full conversation in the latest episode of the PMO Club Podcast, where Dani also reveals how they control the 1,100 projects they run each year, what criteria they use to prioritise them, and what he finds the biggest challenges in setting up, building and running a portfolio management organisation!
You can listen the podcast episode on belwo platforms in Hungarian:
Spotify:
Apple Podcast: Click Here!
Google Podcast: Click Here!
