For organizations planning or considering a formalized PPM function, it’s important to have some understanding of its recent evolution and where it stands now. Why? Establishing a mature PPM practice will not happen at once and the road to maturity will necessarily follow or correlate closely with an established and recommended path. This path tends to mirror PPM’s evolution over the past two decades.
Back before Project Portfolio Management was so universal a ‘concept,’ lacking the assortment of scholarly works, consulting organizations, and PPM System Vendors - PPM existed in a kinder, gentler world.
In the 20 or so years that I’ve been a practitioner in the field, its scope and complexity have grown considerably. Modern PPM Systems objectify the considerable range of options and capabilities comprising a given PPM methodology. The PPM tool vendor Smartsheet provides an excellent overview of the wide range of PPM processes and tools available.
Back before Project Portfolio Management was so universal a
‘concept,’ lacking the assortment of scholarly works, consulting organizations,
and PPM System Vendors - PPM existed in a kinder, gentler world.
When I retired my project manager jersey, I found myself in the world of PPM and PMOs. PPM as we practiced it then was focused primarily on the means of selecting major or strategic initiatives. Hence the name – Portfolio (of investments). Cost, Risk, and Return were the principal decision attributes and anything else that might be considered prior to executing a portfolio of projects was secondary. Sounds rather simple and, on paper, it was.
Unfortunately, the IT industry was caught in the sinister workings of those black-hearted departmental silos of yesteryear (of course, those don’t exist anymore). Given that complication, an organization could find themselves with project execution portfolios that hadn’t been screened against other organizational factors which made the portfolios themselves the problem rather than the answer. The missing link here is the human resource aspects. Specifically, human resource capacity planning.
Capacity planning became the be-all and end-all of project portfolio constraints. The ultimate master to which all other indices of a project portfolio must bow. Capacity planning around major initiatives was insufficient. Competing efforts in the enterprise required their due recognition. Soon, all project work in the organization was encompassed, including very minor ‘project work’ such as small enhancements and even break/fix work.
These were major steps in the right direction. Unfortunately for PPM at the time as well as IT groups trying to implement it, the total project inventory typically consumes between 15% to 25% of the total resource inventory in any given year of any given IT organization. So, what about the work demand tugging at the other 75% to 85% of workforce capacity? The so-called ‘Lights On’ work portfolios came to life. Naturally, the total work catalog needed to be incorporated into overall capacity planning to realize the grade of resource management required to properly execute an enterprise grand strategy.
With all of the work properly modeled, whether Strategic Initiative or Lights-On and all resources identified and committed – it sounds like game over for PPM and we can sit around and hone this paradigm to perfection, right? Nope, turns out that the expanding scope of PPM was just getting underway.
With the advent of Sarbanes Oxley, already emerging time reporting and financial management functions became part and parcel of the PPM complex. The representative PPM systems spawned their own process engines to ensure repeatability, accountability, and efficiency.
Improved portfolio functionality gave rise to more robust work monitoring and even constrained scenario generation in more capable systems. Correlation of projects to corporate strategy as well as component hierarchical strategic breakdowns became a significant driver of portfolio management designs. In many ways, the PPM systems vendors began competition with ERP vendors (and vice-versa).
With the enterprise strategies, work, and resources defined and fully integrated, we enter the current state of PPM capability. What the Lights-On portfolio of work and resources lacked in strategic correlation, it made up for with rich opportunities for management and optimization of the organization’s other principal entities.
Service, Application, and Asset portfolios came into being. Service and Application Portfolio Management now draw on disciplines such as ITIL. Within IT Portfolio Management, Enterprise Architecture Portfolio Management has sprung out of the Service, Application and Asset components into the evolving EA PPM discipline.
If I was brave, I’d say that PPM has fully matured. Speculating that – as it stands today – PPM has reached its zenith, would have been as foolish as stating 20 years ago that PPM is maxed out one level above projects and is forever a project selection technique. Axelerate's Capabilities page discusses our PPM function in terms of IT Governance.