Project portfolio management is a concern for organisations that manage a set of projects sharing common resources. This situation requires a specific portfolio-level approach. However, different grades of inter-dependencies between projects will call for different approaches. Our new White Paper 2021-04 ‘How to Approach Project Portfolio Management’ exposes the specifics of portfolio management and what are the best ways to manage this situation.
A project portfolio is not the same as a program. In a program the set of projects all contribute to a single goal, while in a portfolio the set of projects each aim at a different objective, but they share certain resources and constraints. For example, developing a new aircraft of defence system is often referred to as a program, composed of multiple projects or sub-programs that have to converge toward a single objective; however, an owner or a contractor manages a portfolio of projects for various purposes or on various locations that share certain human and equipment resources.
Interdependencies between projects in a portfolio can be of different natures and of various grades of intensity.
The basic interdependencies between projects relate to certain rare resources, that have limited capacity and cannot be easily duplicated or sourced in an alternative manner. These key resources are often specialised disciplines or trades; or specialised equipment. Common examples are certain expert resources, specific qualification laboratories or analysis equipment, or specialised construction or transportation equipment.
Approaches to portfolio management will greatly depend on the grade of interdependency.
- For limited interdependency (limited number of well identified scarce resources used across the portfolio), developing and updating a specific schedule for those scarce resources will generally be sufficient.
- For higher grades of interdependency there is no other solution than to develop an integrated schedule of the entire portfolio, covering all projects and identifying specifically the activities linked to the shared scarce resources and using resourcing techniques to optimise their usage over time.
Irrespective of the level of portfolio interdependency, there are also certain rules that appear to apply. They are derived from the critical chain theory.
When scarce resources are needed across various projects, proper project portfolio management can have a substantial impact on the overall performance of projects and the organisation. It is important to understand the grade of interdependency – how portfolio level issues may affect individual projects’ performance – as it will inform what is the adequate portfolio-level governance, tools and processes. Solutions are different for low and high interdependency. In all cases a proper grasp of portfolio-level issues is required to effectively drive the entire organisation performance.
Read our new White Paper 2021-04 ‘How to Approach Project Portfolio Management’ to understand better how to address portfolio management challenges.
If you can’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2021-04_Portfolio_mgt_WIP_v0.pdf
