Project Portfolio Management

The project portfolio management is a sub-task of multi-project management .
Major goal of the project portfolio management is to the right projects to find and select . These projects are then the project portfolio . Thus, the project portfolio management aims primarily to a higher effectiveness of the project economy, while the project management in general, especially the efficient implementation of projects is paramount.

Demarcation
While the project management of individual projects or programs (see program management ) ends with the completion of the projects (life orientation), is the project portfolio management to an ongoing task that is repeated cyclically.
A definition of project portfolio management provides the Swiss specialist writer Bruno Jenny : "Project portfolio management leads all projects a guide unit. This includes all the tasks that are necessary for prioritizing, coordinating, controlling and supporting the upcoming and ongoing projects and the necessary resources for project portfolio view. “
Somewhat more broadly, one can under Project Portfolio Management , the permanent planning, prioritization, comprehensive control and monitoring of all projects within an organization or a completed part of an organization understand.

Among the tasks of project portfolio management

• the definition of projects and programs for the implementation of higher-level organizational goals,
• the assessment of proposed projects,
• The approval, deferral and rejection of project proposals,
• ongoing monitoring of projects from the perspective of the client,
• Observation of the project and quality management tasks and
• the cross-project information and knowledge management.

Recently, in connection with the project portfolio management also of strategic (multi) project management is discussed (see also multi-project management ).

Consequences of project portfolios

Projects within the project portfolio of an organization are often in competition with each other for

• Management attention
• Availability of resources

Comparative selection of projects in a project portfolio

Various methods can be - and often in combination - used:

Monetary methods

Comparison based on the project NPVs ( Net Present Values ​​- net present value ) of projects over a given period. In the example, this period of four years, the Future Values ​​( future values ​​are taking expectations) with the discount rate (discount rate discounted) to use in the comparison Present Values ​​( present values ​​to be determined):
Instead of the NPV and the IRR can ( Internal Rate of Return - IRR ) are used.

Strategic Assessment

Another approach uses Strategic scoring - the strategic review of projects under weighted criteria:

Multi-dimensional view

Often, the results are considered in combination:
In the example above, it is for Project1 , which is neither strategically nor financially attractive, most unlikely that it will be executed. project4 costs a lot, but strategically interesting. Project5 is indeed strategically irrelevant, but financially attractive. Project3 is both strategically and financially attractive.

Nonlinear Optimization against a constraint (a restriction)

Several factors may limit the ability of an organization to carry out projects, such as personnel, finance, technical limitations, or even the need to not overwhelm the ability of the organization to control constant changes.
In the following example in a decision tree to select from a list of 7 potential projects is made. The selection is limited by a budget of $ 10,000,000. Project selection remains with total costs of $ 7,740,000 within this limitation and offers the highest possible payoff of $ 2,710,000. All other combinations of projects would either produce a lower payoff or over budget.

Other tasks of project portfolio management

Prevention of duplication

Especially in large organizations with many sub-organizations (eg businesses), it is possible that projects with similar objectives to be carried out in parallel without the portfolio managers know about it.

Standardization of project management methods

In many organizations, a PMO ( Project Management Office sure) that the Project Manager to develop uniformity in

• Terminology and Glossary
• Methods used
• Forms, templates, tools
• Communication and Reporting
• other elements of project management