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SECTION 9

PROJECT PORTFOLIO
MANAGEMENT

Have you noticed that there is a new bandwagon to hop upon? It’s called Proj-
ect Portfolio Management. There are lots of people talking about this new
management theme, even if they can’t really define what it is. It certainly has a
nice ring to it. Actually, if we can figure out just what project portfolio manage-
ment is, and how we can effectively work it into our overall management prac-
tices, we may very well find that it is an important element of the management of
the enterprise.

In this section on Project Portfolio Management (PPM), we present three
chapters that will explore the world of PPM, including exposing its virtues and its
foibles. First, we note the emergence of a special set of needs related to the man-
agement of projects within the enterprise. Then we explore the impact of these
needs on the way that we normally do project management and on the tools that
we use for that purpose. We question the use of the terms value and impact rela-
tive to projects in the portfolio. We initiate a discussion on project risk, and its
role in PPM. We make some suggestions about organizing for PPM and present a
list of capabilities needed to implement a project portfolio management practice
in the firm. This is all covered in Chapter 9.1, Defining and Implementing Proj-
ect Portfolio Management.

Project Portfolio Management calls for the integration of two important func-
tions within the firm. These are the Operations function and the Projects function.
In Chapter 9.2, we discuss Bridging the Gap between Operations Management
and Projects Management. We expose the weaknesses and inefficiencies that exist
when there is a gap between these two functions, and propose a way to bridge the
gap. We also introduce a set of software that has been developed specifically to
support our proposed solution.

When covering the topic of risk and contingency in Section 6, we indicated

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