Project Portfolio Management (PPM) Domains

August 4, 2008 | Author: PM Hut | Filed under: Project Portfolio Management

Project Portfolio Management (PPM) Domains (#1 in the series Project Portfolio Management (PPM) Domains)
By Demian Entrekin

After observing hundreds of PPM implementations (some more successful than others), we have discovered a reliable pattern for implementing PPM solutions predictably. As one might suspect, the pattern emerges from the nature of the most urgent problems in the portfolio organization.

We call these patterns PPM Domains, and there are three of them. When you boil it all down, organizations tend to implement PPM to address three systemic problems:

  • Supply/Demand management
  • Prioritization and decision making
  • Execution of critical projects or programs

What follows is a very brief outline of each of the three PPM Domains.

Supply/Demand Management: In the past we have called this need “demand containment.” In short, some organizations are struggling with modulating the constant flow of inbound demand on the portfolio and the available resources. Project organizations of all sorts struggle with this challenge, but IT departments in particular struggle with regulating demand. The supply/demand situation in IT is unique because IT resources have many operational duties in addition to projects, such as systems management and application portfolio management. If a portfolio owner cannot effectively regulate the flow of inbound demand, the forward progress of key projects can become severely degraded by the day-to-day fire fighting.

Prioritization and Decision Making: All project-driven organizations have a project portfolio. It may contain 10 projects, or a 100, or a 1000. Whatever the number may be, someone owns the overall performance of that portfolio, and that performance includes the value created by the outputs of the projects. You may be able to say that you can finish your projects “on time and on budget” but are you working on the right things? Are you creating value for the organization? These are the questions that lead business leaders to evaluate the project portfolio in terms of value creation. How do we focus our limited resources? What items are nice-to-have and what are must-have? In the private sector, What will give us competitive advantage? In the public sector, What items will create the greatest benefit for our constituents? This is a classic problem for new CIOs, who must come in and get their arms around the work being done.

Project/Program Execution: From time to time, a key project will enter the scene that simply cannot fail. If it fails, the consequences are severe. Some projects may represent career-enders, or career-makers. Of course, we all know that the success of such projects can often be manipulated by savvy politicians, but results oriented organizations would prefer to avoid such spin exercises and simply drive the critical project to it’s desired outcome. And of course, there are all those other projects in the soup that can either impede or support the elephant. Can we see how these projects are impacting each other in ways that we can measure? The need for project execution may also arise from a systemic tendency to disappoint on projects in general.

Here are a few additional observations on PPM Domains:

  • These three PPM Domains are relatively consistent and predictable
  • Most organizations fall into one of these three camps when they start to implement PPM; one of these pain areas is simply more pressing than the other two
  • These three Domains help focus the PPM implementation on pressing needs, and this focus helps to control scope – you don’t want to eat the whole burrito in one bite
  • Most organizations will want to stage their PPM implementations to address all three areas, and that drives the overall phasing of your PPM implementation
  • The vanilla implementation would go something like this
    • Implement Prioritization first so you can orient your resources on the right activities and match up with business drivers
    • Implement Supply/Demand second so you can tune the flow of inbound demand to match your overall business drivers
    • Implement Execution third so you can tune your execution from idiosyncratic to predictable

Does this match your experience?

Demian is the CTO of Innotas. As founder and CEO, Entrekin oversaw marketing, product development, sales and services for the company. Today, he focuses on strategic product direction. Prior to Innotas, Entrekin co-founded Convoy Corporation and was Chief Architect of its initial products. In that role, Entrekin helped the company lead the middleware market with an annual growth rate of 670 percent and played an instrumental role in Convoy’s subsequent acquisition by New Era Networks in 1999. A recognized thought leader in Project Portfolio Management, Entrekin has published numerous papers on PPM and his blog (PPM Today) explores current issues related to successful PPM implementation. During his 18 year career, Demian has assumed leadership roles as a consultant and as an entrepreneur, delivering commercial and corporate database applications. Demian holds a B.A. in English from UCLA and an M.A. in English from San Francisco State University.

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Project Portfolio Management (PPM) Domains Part II – PM Hut wrote on August 18, 2008 - 10:30 pm | Visit Link

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