Companies are beginning to accept that there is something missing in their business processes, a set of processes and tools that bridge the decision gap between strategy and execution. They are starting to understand the value of effective project portfolio management.
Adding legitimacy to this relatively new and growing field, the Project Management Institute (PMI) has announced that it will certify PPM professionals. PMI is a highly respected organization that has for years certified project management professionals. This action on its part indicates that there is greater understanding, need and adoption of PPM as an essential business process sufficient to establish credentials for people practicing it.
The tools and processes for portfolio management applied to projects are still in their infancy. While some aspects have been drawn from financial portfolio management, new elements have been created by individual firms and academic pundits.
In recent years, there has been an explosion of books, papers and conferences on the subject resulting in greater discussion, argument and eventual adoption of best practices. The field is still in a state of some change, but practitioners are honing in on the tools and processes that work best to advance their businesses toward their goals.
PPM processes are becoming more effective. Better feedback mechanisms and metrics tied to business results are being identified and adopted. And through these measures, there is a growing understanding of the value of PPM to the ability of the business to achieve its objectives.
A well-designed PPM process includes regular examination of the project portfolio, testing it according to the organizational strategy and goals, and its implementation plans against execution status. In this frequent and regular cadence (often monthly), new project proposals are weighed against the active portfolio and adjustments are made based on risk and payback expectations and other elements of a good portfolio balance. Testing a new project proposal against the portfolio is more frequent, and reactions to changes in the market and industry are more immediate.
But there is a need for moderation to keep the system from over-reacting to the latest rumors. Companies seem to be finding this right balance between acting too quickly and acting too late.
PPM software is being generated and sold by very large and very small companies. Some promise to tie your PPM process together with other large systems they sell. You can find PPM software from Microsoft, Oracle, HP and many other large players. You can also find stand-alone software from smaller companies that focus only on PPM. The explosion of software is more evidence of legitimacy of this new field.