PROJECT
PORTFOLIO
MANAGEMENT
Concepts Généraux
PPM Definitions
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The first is a direct quote from the PMI PMBOK – “ the selection and
support of projects or program investments guided by the organization’s
strategic plan and available resources.”
This involves a decision making process. The concept of being guided by
the organization’s strategic plan and the available resources which means
being very aware of the organization’s goals and objectives and
also all types of resources that are available for projects.”
Second definition comes from the Managing Multiple Projects book
published by the Center of Business Practices which defines PPM “as a
process for ensuring the consistent selection, prioritization and
planning of the right projects for the organization”. This particular
definition begins to shed light on the different components of PPM – which
include evaluation, selection, prioritization, budgeting and planning
once again based on value and strategic fit with the organization.
PPM
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It uses…
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So as to …
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Which provides …
 An identification of Projects
 An evaluation of Projects
 A prioritization of Projects
 Check if projects meet the Enterprise Strategic Goals and Objectives
 Optimize Resource allocation
 Provide different analysis (Cost and ROI analysis, Risk Analysis, Strategic value
analysis)
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Visibility
Standardization
Measurement
Process Improvement
PM and PPM Value
Portfolio Management –
•Optimal integration of
to identify and select the investments that will
portfolio and project level
maximize organizational value
capabilities allow
100%
maximization of business
value
Portfolio
Management
66%
Project Management 50%
Value Realized
Project
Management
to successfully deliver
the selected business
value opportunities
0%
75%
Ability to Realize Business Value Potential
100%
PPM Steps
6.En attente ou
arrêté ou clos
1. Construire le Portfolio :
Nouveaux Projets ou
idées
5. Revues,
Priorisation / Sélection
2. Prioriser /
Sélectionner
4. Mettre à jour et
Piloter
3. Planifier /
Affecter
Construire le Portfolio
 Standardiser la définition des projets
 Définir et mettre en œuvre des modèles de fiches
projets / idées (Project Charter)
 Définir les propriétés
 Définir les business drivers
 Définir les processus de collecte des informations
Project Registry
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Minimum information requirements for the Project
Registry include
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Project Sponsor name
Project Manager name
Project priority ranking
Target milestone schedule
Resource requirements
Identified domain within the
project portfolio
Prioriser / Sélectionner
 Prioriser
 Définir les Business Drivers
 Valoriser les Business Drivers (Donner un poid à chaque BD)
 Evaluer la valeur stratégique de chaque projet
 Sélectionner
 Définir les contraintes
 Ressources (Compétences)
 Budget
 Techniques
 Optimiser les ressources en respectant les contraintes
Business Driver
Strategic Goal:
Dedicate our resources to those market areas where we can maintain
our existing client base and increase share of market of current clients
Business Driver Name:
Business Driver Name:
Retain existing clients
Grow Customer Share of Wallet
Business Driver Definition:
Business Driver Definition:
Maintain clients and remain
competitive in existing markets
Sell additional products to existing
clients
KPI’s:
• Client Satisfaction Rates
• Client Retention Rates
• Variance in % Market Share
KPI’s:
• % Increase of Market Share
• Increase in Revenue
Typical Project Criteria
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Strategic
Proprietary Position - how easily copied
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Support of Core Competencies
Brand Enhancement
Commercial
Market Impact
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Market Need
Market Timing
Technical
Feasibility
Complexity
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Financial
Earned Commercial Value (ECV)
Net Present Value (NPV)
Internal Rate of Return (IRR)
Return on Investment (ROI)
BD Priorisation
The Pairwise Comparison is a proven technique for deriving relative priorities or weights
for Business Drivers through performing one-to-one comparisons.
Compares
the relative
importance
of Driver B
vs. Driver C
(row to
column)
Indicates
relative
importance of
Driver A vs.
Driver B
(row vs. column)
Priorisation
High Risk
C
A
Q
B
R
D
P
E
Faible bénéfice
O
Fort Bénéfice
G
F
J
M
I
H
N
L
K
Low Risk
Example:
Size - Effort
Color - Organization
Sélectionner les bons projets
Optimization techniques allow organizations to select portfolios that will deliver the
maximum strategic and financial value
Use charting techniques to analyze
the portfolio
2
L - Priority - H
1
Optimize the portfolio under varying
budgetary constraints
Portfolio Analysis/Optimization
Cost
Break constraints and reach the Efficient
Frontier
3
Requirements For PPM Success
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Well defined enterprise goals and objectives
Established and maturing PM processes
Project reporting and analysis capabilities
Integration of project (enterprise) resources
Executive support of portfolio process
Reevaluate Project Portfolio on a Regular Basis
 As Project datas are changing quickly
 Market is changing quickly
 Enterprise Objectives can change
  The Project Portfolio must be reviewed very often
Benefits Of Portfolio
Management
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Validate business strategy and align
projects
Eliminate redundancies
Improve resource utilization
Improved schedule performance and
time-to-market
Reduced staff overload and attrition
Facilitate the process of adding,
sorting, killing projects so as to meet
the Enterprise Objectives
Consistent Progress
Towards Best in Class
100%
Alignment with
Best Practice
Prioritization,
Optimization & Adv
Prioritization,
Optimization & Adv Analytics
Analytics
89%
High
Medium
Low
75%
Prioritization &
Optimization
81%
62%
50%
Prioritization Only
41%
Efficiency
25%
2001
2002
2003
Annual Planning
2004