If project management means doing things right all the time, then project portfolio management (PPM) means doing the right things at the right time. Enterprises with business goals and strategies need guidance to better prioritize limited resources and funds. Project portfolio management software helps business leaders align company goals with project team efforts.
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What is Project Portfolio Management (PPM) Software?
Project portfolio management (PPM) is the process of analyzing the potential revenue of undertaking a project. Project portfolio management software helps in the selection, optimization, and oversight of project investments. Executives, PMOs, project sponsors, and project managers are able to see the big picture using a good PPM tool — they can analyze, manage risks, and make forecasts as they look to invest in new projects.
Why Do Companies Need Project Portfolio Management Software?
Project portfolio management software is a solution that provides companies the visibility, oversight, and capabilities to help them prioritize and manage current projects and resources, often simultaneously, and even help them manage future ones. PPM tool users now have a central platform to manage overall project efforts. Deciding where to invest the company’s time, budget and staff can now be based on factual information.
Comparing Project Portfolio Management Software
It’s easy to get overwhelmed when you’re comparing PPM products. All PPM systems are essentially designed to do the same job, so differentiating between platforms is tough. Some PPM mega-vendors also offer PM suites, EPM suites, and full ERP systems, while others only offer standalone PPM software that extracts data from your existing project management software. Some vendors also offer niche systems custom-tailored to your market or industry.
Ultimately, the best software for your business depends on the overall functionality and integrations you need. To understand how a PPM tool might satisfy your objectives, it’s important to understand the core functionality each one provides. PPM software typically includes the following key management capabilities.
Pipeline management
Sometimes called pipeline assessment and analysis, this feature helps managers determine whether a project or a set of projects can be finished with the time and resources on hand. A constant, real-time overview of projects and resources allows you to assess which endeavors contribute to business objectives and determine the best way to invest accordingly.
Resource distribution
With a 10,000 foot view of your project pipeline, you can efficiently allocate company resources to projects as needed. Sometimes called demand or resource management, this allows you to manage and distribute financial, inventory, technical, and human resource. In addition to offering resource allocation on an individual project basis, many systems allow you to model what-if scenarios and apply them across the entire portfolio.
Change management
One major reason many projects fail is because new requirements, features, operational constraints, regulatory demands, or technical alterations crop up mid-project. These fluctuations in project details often force projects to go over budget or past deadlines. To overcome this, a good PPM tool provides a central repository for various change requests. This allows you to quickly assess inquiries as they arise, and match available resources to overall demand. Additionally, change management allows you to monitor project timelines and budgets in real-time.
Financial administration
Your financial manager needs to accurately estimate and manage the financial resources and anticipated outcome from company projects. Most PPM systems can demonstrate the anticipated financial value of projects in relation to strategic objectives and organizational priorities. Financial management capabilities let you see updated financial progress as it happens, which allows you to more accurately predict if a project will fail to meet financial objectives before it’s over. When you can determine when projects will fall short of financial expectations, you can change the parameters or cease investment before incurring losses.
Risk management
PPM software allows you to analyze how risky each existing and potential project is so that you can determine confidence levels across the portfolio. By grouping projects together, you can evaluate confidence levels on a categorical basis and assist financial and resource allocation decisions. Sometimes referred to as “portfolio change and risk management,” the benefit of this feature is the ability to determine which projects—or even which facets of individual projects—are too risky. Using risk regulation modules prior to launching a project can help your organization avoid poor investments.
At the core of a PPM system, the above features are made possible by company-wide analysis capabilities. A self-service reporting dashboard provides a top-level view of projects, resources, budgets, requirements, and timelines. Analysis, predictive functionality, and what-if scenarios provide cohesive insights across investments to help leadership determine which efforts have the best prospects for high returns, assess the impact of changes to the portfolio, and reveal potential interdependencies. Project performance metrics from real-time data aggregation increase transparency.
