For most services organizations, the demand for new projects will always exceed their capacity (financial, skills, etc …) to do them all. The projects must be managed as a portfolio, to ensure that scarce resources are invested in those with the highest priority.
Often the payback on internal investment is difficult to measure, so alignment with strategic objectives is commonly used for project portfolio management. Other useful project attributes include:
- Priority or ranking. This is often decided by the project board or authorization authority. Statutory authorities may require corporate system changes at short notice and such projects will move to the top of the list.
- Client. For internal departments, a common need is to maintain an agreed balance of resource utilization across the client departments.
For example, the IT Director has to maintain the level of resource working on a new financial system, fending off competing demand from other departments.
- Programmes of projects. Where a number of projects must be implemented to provide key deliverables, these must be treated as a group when looking at resource investment.
This aspect of managing multiple projects is often referred to as project portfolio management. It requires functions that apply to the entire project workload, with particular emphasis on:
Managing the Project Pipeline
Although the annual budgeting process should avoid over commitment at the planning stage, new projects and changes in scope arrive unexpectedly.
With skilled resources being too specialized to work on every task, and existing commitments already out there, checking the skills capacity to take on new work is important. Clear visibility of skills bottlenecks is crucial if poor project performance is to be avoided.
If additional resource cannot be found, then lower priority work must be delayed to free up the required resource. To rebalance the workload, ‘What If…’ analysis enables alternative scenarios to be evaluated.
Proposed projects, added to the committed workload, can be dragged to reduce resource bottlenecks.
Project Tracking and Performance Measurement
Actual project performance will often diverge from that planned. If high priority projects take more resource than authorised, unforeseen bottlenecks can easily arise.
Time sheet systems that track actual effort, coupled with independent estimates to complete, will identify rogue projects. These will require re-estimating and a review of resource requirements. Poor performance on a major project can easily disrupt the resource allocation on other work.
Innate Resource Management Software
Innate provides the functions needed for effective project portfolio management. All of the required project attributes are available and the standard reports enable projects to be grouped as required.
- As new work arrives, the impact on skills capacity can easily be seen.
- ‘What if…. ‘ scenario analysis functions assist with rebalancing the workload, when bottlenecks are unacceptable. Related projects and tasks can be highlighted and moved in time as a group.
- Timesheets capture effort and, with estimates to complete, provide cost and schedule variance analysis.
- Performance measurement compares the project budget with updated estimates to complete, identifying the projects that require corrective action.
Project portfolio management keeps your plans aligned with the organization’s priorities. Innate resource management software provides effective project portfolio management.