The Project Portfolio Management is the management of project portfolios for maximizing the value of the project portfolio to the overall success of the enterprise, based on the investment goals. Planning and maintaining the optimized portfolio of projects, is one of the challenges in managing the project portfolio. Optimization of portfolio means working on a set of projects over a period of time, delivering the maximum value to the business investments. Thus, the Project Portfolio Management is an art of applying the management skills, techniques and the management tools for the projects with the aim to meet the financial objectives. In project portfolio management the following steps are considered in managing the multiple elements in the projects.
Step 1. Identification of needs and opportunities: The process starts with the creation of the organizational objectives. Once the baseline is established, the needs and opportunities will be compared against this baseline.
Step 2. Selection of the best combinations of portfolio: Project Portfolio Management is all about managing the resources towards achieving the organizational goals. The organization selects the best combination of portfolio and approves the project portfolios, that meets the specific business objectives.
Step 3. Prioritization: After the selection of the project, criteria are developed against which the portfolio is prioritized according to the objectives, budget and resource availability. All the projects are listed along with their goals and the identified criteria required for determining the expected impact of the project on the entire organization and the portfolio stakeholders. This process allows to do ranking for all the projects and determine the level of priority. The project prioritization is reviewed and assessed if necessary and then finally approved for implementation of the project.
Step 4. Terminate the project: The low – priority projects and projects not linked to the corporate strategies are terminated. Termination of such projects will ensure cut down on the cost, time and resources because these projects do not add any measurable value to the organization.
Step 5. Planning and execution of the projects: Once the portfolio of projects is selected and evaluated, the next is to plan and execute the projects. The most of the focus is placed at this project management phase. The project’s execution involves management of time, cost and resources of the projects, making sure that the projects are delivered as specified.
Step 6. Close the portfolio: The business must gain the majority of the value of the portfolio by the end of the portfolio schedule. The portfolio management is a success when the portfolio schedule is prepared smartly, focused on meeting the requirements as defined. Usually, the high – valued projects are scheduled at the beginning and comparatively lower – valued projects are scheduled at the end. The portfolio is closed and reporting is done. The Portfolio Closure Report includes the specific strategic objectives achieved by the organization, communicating the portfolio stakeholders about the wealth of the portfolio gained and the portfolio has met the business objectives for which it was designed.
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