Project portfolio management helps organizations achieve better outcomes by connecting strategy and implementation. For PPM to be effective, it must establish governance and transparency and manage organizational and project changes. It improves resource management and reduces project failures by providing insights that project managers can use to respond quickly to changes and bottlenecks.
But the ever-changing nature of project requirements, ongoing supply chain issues, and evolving clientele make it difficult for firms to align projects with an overarching business strategy. It’s easy to lose focus when juggling numerous projects for customers with different expectations. Poor project estimation, incorrect resource allocation, inaccurate scheduling, and a lack of data visibility often lead to overspending.
Fortunately, recent reports reveal a valuable solution to mitigate these common issues with portfolio project management. For example, 94% of high-maturity organizations experienced better outcomes after implementing project portfolio management software. But that doesn’t mean that major corporations and big businesses are the only ones that can benefit from PPM software.
Project portfolio software offers organizations a level of control and transparency that surpasses Excel spreadsheets and manual project management. PPM software is a consolidated solution that can help teams improve decision-making, align with business strategy, and measure performance in a single package. Read on to discover how project portfolio management software can enhance operations with data, automation, and transparency.
What is Project Portfolio Management Software?
Tracking performance and quality standards while running and maintaining several projects can take time and effort. Project portfolio management software is a digital solution that enables organizations that run various project types to become more efficient.
PPM software makes sense of numerous data sets to provide teams with unparalleled transparency. It gives project managers and business leaders the foundation for a solid portfolio strategy that streamlines workflows and simplifies project management.
Who uses project portfolio management software?
Project portfolio management software can be beneficial in many different areas and types of business. For example:
- Consulting agencies
- Financial institutions
- Construction firms
- Marketing and ad agencies
- IT departments
- Human resources organizations
- Small businesses
Why use project management software?
There are several reasons why companies of all types choose PPM software to consolidate business data. PPM software enables leadership to plan more effectively, manage cost versus value, and execute data-based decisions. Understanding how certain investments enhance overall outcomes allows firms to cut back on areas that are not as profitable, all while managing timetables and resources.
Another reason why companies turn to PPM software is because it offers managers a global view of project details such as timelines, budgets, and stakeholder requirements so that nothing falls through the cracks. Businesses that run numerous projects simultaneously also use project portfolio management software to identify areas to innovate and improve to earn more market share and operate according to company values.
The Benefits of Using a Project Portfolio Management Software
Portfolio management software offers firms a simple way to evaluate their business objectives against current project metrics and future project potentials with analytical data and powerful collaboration tools. Each project portfolio management solution will behave differently from the next, but there are universal benefits of using PPM software.
Here are some of the ways that organizations get better results by implementing project portfolio management software:
Consolidate data to a centralized location
PPM software helps companies stay informed about all aspects of each project. It’s easy to generate various data sets no matter how many projects are in the works because of how the technology consolidates data. Instead of having numerous data sets in different places, teams can access all of their business data from one centralized location. PPM also helps model potential solutions and outcomes so that forecasts are as accurate as possible.
Connect stakeholders, team members, and project managers
Unification is key to creating new and improved processes that help the company move forward. Collaboration tools are handy for organizations that rely on departmentalized functions. PPM software promotes communication and keeps everyone on the same page with real-time feedback and robust documentation. Plus, it helps allocate tasks and create replicable workflows to meet overall business goals.
Make better data-driven decisions
Going with your gut can work for many scenarios, but business isn’t one of them. Making intelligent business decisions depends on having accurate information to analyze. PPM tools drive better business decisions because they rely on solid data to produce valuable insights.
They also come with features that filter out projects that don’t deliver. And instead of drawing from numerous resources to generate reports, portfolio management software enables companies to streamline reporting with localized data.
Finish projects faster
Bottlenecks, missed appointments, lack of communication, and many other factors contribute to slow delivery times. But project portfolio management software enables organizations to turn their operation into a well-oiled machine. PPM software comes with several tools for productivity to streamline workflows and implement automation. That way, teams can stay focused on strategy while reducing project turnaround time, giving firms an edge over their competitors.
Manual methods like Excel sheets, emails, and repeatedly entering the same data across different apps have plagued project managers and teams with tedious activities and fragmented lines of communication. Project portfolio management software has built-in reporting tools that offer real-time access to specialized insights for each project and the portfolio as a whole. Since all authorized users can access data from anywhere at any time, nothing gets lost in translation, and everyone stays on the same page.
Improved financial management
Project spending can quickly get out of hand due to various factors. Inaccurate project estimates, poor resource allocation, and lousy scheduling habits are some of the most common ways projects go over budget. Fortunately, PPM tools are highly effective at balancing cost and value. They offer users a transparent view into all aspects of the organization to easily reallocate personnel, manage resources more effectively, and make better project estimates to reduce overspending.
Better project outcomes
When projects fail, everyone loses. Factors like cost overruns, overspending, vague requirements, technical issues, and never resolving problems are everyday occurrences that all lead to project failure. But PPM software can significantly reduce all of these factors. It enables organizations to plan projects based on resources and minimize problems with complete transparency into project activities, leading to better data, better processes, and better project outcomes.
Key Features of Portfolio Management Software
Portfolio management is about connecting strategy and execution. What better way to integrate these business ideas than with PPM software built to ease project decision-making and produce better outcomes? Companies need project portfolio management software to maintain a focused and coordinated portfolio of projects aligned to achieve broader organizational goals. But not all PPM solutions come with the same features and capabilities.
Here are some key features to look for when it comes to selecting the best PPM software for your business:
Teams must define program objectives and target dates to keep projects organized and on track. PPM software features help businesses create realistic roadmaps based on company vision, goals, and strategies. Program managers can quickly draw up plans, define delivery timeframes, set milestones at crucial stages, set release dates, and set up automation to communicate these phases to everyone involved with the project.
Every project runs a bit differently from the last, each with its requirements and needs to produce positive outcomes. Portfolio planning prioritizes and transfers resources to other projects within a portfolio to avoid overspending. A PPM tool that scores projects based on both quantitative and qualitative data uses computations from many KPIs that measure cost, values, and their weight on the company. A crucial PPM feature to look for involves prioritizing portfolio projects according to their overall value to the organization, not just their cost or scope.
Risk management tools
Filtering risks based on their level of impact and probability of materializing is an essential feature of risk management software that PPM tools should also incorporate. Project portfolio software comes with features that conduct simulations to measure the effects of various risks on resources, costs, and tasks. Then, it should also offer risk management options to get the project back on track. Some tools come with customizable options that enable users to automate risk responses and take action accordingly.
Monitor multiple projects
A hallmark of PPM software tools is the ability to monitor the progress of multiple projects at once without compromising visibility. Managers can oversee milestones and deliverables across the portfolio to align project timelines, resources, personnel, and more. Complete transparency also allows leaders to resolve project issues, manage scope crawl, and mitigate risks as they happen. PPM tools also let managers re-evaluate project portfolios depending on market scenarios, filters, market penetration, and more.
Resource optimization workflows
Resource optimization plays a significant role in whether or not a project succeeds or fails. When resources are managed ineffectively, budgets can quickly get out of hand. Project portfolio management tools should have efficient resource optimization workflows, and comparison maps to help users make business decisions based on data insights. A great tool will also have the ability to recommend better scenarios based on the resources available. Generating predictive scenarios can help managers use resources wisely and send reports to involved parties.
Budget forecasts are essential tools to help businesses stay on track, assess project results, and make strategic moves. PPM tools with budget maintenance features enable teams to stay on budget by tracking spending, labor, and other operational costs crucial to quality deliverables. Leaders can use cost tracking features to set realistic goals and update stakeholders throughout the project lifecycle. Plus, they’re designed to calculate estimates, project costs, and revenues and operate billing and payments.
Templates and reporting tools
Lastly, robust project portfolio management solutions should offer teams resources such as templates and reporting tools that simplify communication and streamline repeatable activities. Creating workflows from scratch offers teams a level of customization, but with templates, teams can create unique workflows for their tasks with speed. Built-in project deliverable templates help users visualize KPIs like alignment, risks, scheduling, and status across the entire portfolio.
In addition to these features, teams should also find a project portfolio management tool that can be integrated with business systems like ERP, sales, and CRM for ultimate end-to-end transparency.
What is a project portfolio management tool?
Project portfolio management tools are digital solutions that enable companies to organize data across several projects to make better business decisions, streamline processes, automate tasks, and consistently deliver positive outcomes.
Can you use an MS project for portfolio management?
Microsoft Project Online is a popular solution for project portfolio management because it is delivered through Office 365, making it widely available for businesses of all kinds. Several project portfolio management features are available in MS Project Online, such as project analysis, portfolio optimization, and resource management.
However, better alternatives, like Quickbase, exist to integrate multiple data sources and automate manual processes in project portfolio management.
How do I manage a project portfolio in Excel?
Managing a project portfolio in Excel is less effective than using PPM software, but it is possible. The best way to manage project portfolios in Excel is to utilize different templates according to the organization’s needs. Each template can include multiple portfolios or focus on a single project.
What are the three tools in portfolio management?
According to strategy expert Christian Rosenstock, three main tools are crucial in portfolio management: cost performance, strategic alignment, and continuous improvement.
Cost performance analytics tools are designed to evaluate company spending, analyze the profitability of investments and historical spending, perform competitor analysis, and highlight how the relationship between value and cost stands across various projects. Strategic alignment tools determine whether or not a particular project fits into overall business goals. And continuous improvement tools for quality control analysis help identify opportunities to improve processes for success in individual projects or throughout the entire portfolio.
The most effective project portfolio management tools incorporate all three key components.