The Role Of Project Portfolio Management In Increasing The Effectiveness Free Essays

string(30) " performance of each project\." THE ROLE OF PROJECT PORTFOLIO MANAGEMENT IN INCREASING THE EFFECTIVENESS OF A PROJECT PORTFOLIO Name Institution Date THE ROLE OF PROJECT PORTFOLIO MANAGEMENT IN INCREASING THE EFFECTIVENESS OF A PROJECT PORTFOLIO Introduction The issue of whether project managers should adopt project portfolio management in the management of multiple projects or not has raised a lot of debates in organizations. It is evident that project managers find it difficult to manage multiple projects on their own without the help of project portfolio management which provides the capacity needed to effectively handle multiple projects. Some company executives insist that portfolio managers are not necessary and yet this not the case. We will write a custom essay sample on The Role Of Project Portfolio Management In Increasing The Effectiveness or any similar topic only for you Order Now Companies initiate multiple projects each and every day with high performance standards. Project managers do not have the capacity to coordinate and control multiple projects in a project portfolio without the help of project portfolio management (Mahajan 2009, p. 78). Project portfolio management is a new concept in project management that is yet to fully explored and utilized by many organizations. The effectiveness of a project portfolio can not be achieved without the expertise of a portfolio manager. The effectiveness of a project portfolio is very vital when an organization wants to meet its organizational and financial goals (Mahajan 2009, p. 134). Some project managers feel that their job is threatened with the introduction of project portfolio management. This is not the case because project portfolio management is only meant to complement the work of a project manager. This position paper will discuss why it is necessary for an organization to adopt project portfolio management when handling multiple projects. Project portfolio management plays a critical role in increasing the efficiency of a project portfolio. Background Information It is important to first of all have some background information about project portfolio management before discussing why it is necessary in increasing the effectiveness of a project portfolio (Levin 2010, p. 93). Project portfolio management introduces a new system in portfolio management where all the technologies, methods and processes used in the management of multiple projects are centralized in one place. Each project in a project portfolio has unique characteristics that are analyzed and collectively managed by the project portfolio management office. Effective allocation and tracking of resources meant for multiple projects is not an easy task but this can be done by a portfolio manager who has the capability and tools to come up with an effective framework for managing multiple resources (Brunel 2006, p. 28). Project portfolio management is very essential in project-driven organizations and this is attributed to the fact that inter-related tasks need to be managed in a centralized manner. Project execution and decision making are the segments of project management that require the capabilities provided by project portfolio management. Project portfolio management provides project managers with the required capabilities necessary to handle multiple projects. Project portfolio management offers simple and cheap strategies that are needed in the execution of multiple projects. Some of the most important capabilities brought about by project portfolio management include pipeline management, resource management, change control, financial management and finally risk management (Brunel 2006, p. 59). The capabilities brought by project portfolio management are very critical in increasing the efficiency of a project portfolio (Rad 2006, p. 9). The work of project managers becomes simple with the adoption of project portfolio management. Project portfolio management provides the best platform for project managers to carry out their duties with minimum risks (Rad 2006, p. 49). The importance of project portfolio management can only be understood in this discussion by looking at the efforts being put in place by organizations to ensure that the project portfolio management office does its best in the management of multiple projects. There is a concerted effort by organizations to increase awareness on the importance of project portfolio management because of the critical role that project portfolio management plays towards the success of an organization (Kevin 2006, p. 143). Many organizations are now focused on improving their project portfolio by putting in place the necessary structures to facilitate the learning process. In order for project portfolio management to serve its purpose, there are certain things that need to be improved. To begin with, any initial information about a project portfolio should be gathered and reported through the recommended procedure. Organizations can also improve their project portfolio management by coming up with clear goals and objectives to guide their projects (Kevin 2006, p. 143). It is important for portfolio managers to develop asset portfolios for optimum resource utilization. Asset portfolios are normally linked to the organizational and financial goals of a project to enhance consistency when it comes to project portfolio management. The resources to be used for multiple projects are identified as early as possible to enable portfolio managers to come up with effective strategies for maximum utilization of resources. An initial assessment of a project portfolio helps portfolio managers to correct some of the mistakes that can affect the overall performance of a project portfolio (Morris 2010, p. 45). Portfolio balance is another aspect that is given special attention in project portfolio management. Portfolio managers communicate their recommendations to the relevant departments within the organization on a regular basis. It is always a challenge to choose the right projects using the right methods and this requires a professional portfolio manager who can carry out the task satisfactorily (Morris 2010, p. 9). Portfolio managers come up with proactive measures that bring high returns at the lowest risk possible. Facts about the Role of Project Portfolio Management Project portfolio management brings out the business value of a project by putting in place results oriented strategies (Grobys 2009, p. 176). All projects within an organization are directed in the right way to guide an organization to wards executing the right projects. Each project has a significant impact on the portfolio and this makes it necessary for portfolio managers to monitor the performance of each project. You read "The Role Of Project Portfolio Management In Increasing The Effectiveness" in category "Essay examples" The overall success of a project portfolio depends on the contribution of all the projects within the portfolio. Portfolio managers determine whether a particular project is likely to have a negative impact on current and future projects (Grobys 2009, p. 176). It is necessary for portfolio managers to identify projects that depend on each other in advance in order for them to come up with the right strategies. Information overload is one thing that project portfolio managers avoid at all costs (Ibrahim 2011, p. 85). Portfolio managers work with the most important data as a way of avoiding onfusion. It is not easy to work on all projects and at the same time achieve the desired results. Project portfolio management was introduced to help organizations in handling multiple projects in an efficient manner. Each project has team leaders who constantly report to portfolio managers on a regular basis about the progress of individual projects. The process of evaluating projects is made effi cient by the right portfolio management systems (Brentani 2006, p. 109). The role of project portfolio management is to ensure that project portfolios achieve the expected results in the right way. Many organizations have discovered the importance of project portfolio management and that is the reason why new systems are being put in place to simplify the work of a project manager (Brentani 2006, p. 109). Project portfolio management software systems are chosen according to the objectives of a given organization. Project portfolio management software has important features that facilitate process evaluation, measurement of benefits and costs, progress reporting, capacity planning and the tracking of benefits. This system enables the company executives to make the right decisions when it comes to finances and business. An organization that is ready to adopt project portfolio management should have the characteristics necessary for effective utilization of the capabilities brought by project portfolio management (Brentani 2006, p. 110). A portfolio manager strictly follows and implements all kinds of standardization without any kind of bias (Moore 2009, p. 156). Project portfolio management improves processes as a way of enhancing the outcome of projects. Organizations should have processes that are properly defined for portfolio managers to have an easy time when they are trying to make improvements. Project portfolio management provides the necessary framework that helps an organization in managing change (Moore 2009, p. 34). Project Portfolio Management Discussion The issue of whether companies should adopt project portfolio management can only be discussed comprehensively by looking at both sides (Levin 2010, p. 93). According to the argument in this paper, project portfolio management is very vital when it comes to increasing the effectiveness of a project portfolio. To begin with, the failure of a project-oriented organization to adopt project portfolio management disconnects information technology with business (Brunel 2006, p. 9). Project portfolio management facilitates a closer alignment of information technology with business. Companies are able to get value for their massive investment in information technology because project portfolio management enables executives to monitor the entire project portfolio and decide on the viability of each project (Rad 2006, p. 49). T hrough project portfolio management, project managers can monitor the progress of multiple projects and ensure compliance with all specifications and standard. Project managers often face challenges when handling multiple projects without the help of project portfolio management because they can not receive detailed data on current and future projects. Organizations that are yet to adopt project portfolio management incur a lot of costs and at the same time experience a decrease in production (Rad 2006, p. 51). On the other hand, project portfolio management reduces costs and increases productivity through appropriate allocation of resources and asset reuse. Project portfolio management enables project managers to make business-based decisions that improve returns and minimize risks (Rad 2006, p. 1). Project managers who work without the help of project portfolio management find it difficult to predict the outcome of current and future projects. Project portfolio management helps project managers in the identification of inter-project dependencies and prediction of project outcomes (Morris 2010, p. 71). The status of multiple projects can b e assessed by project portfolio management assessment strategies (Morris 2010, p. 122). It is necessary to adopt project portfolio management if there is need for a company to improve the effectiveness of its project portfolio. Despite this assertion, there are some arguments that do not support the idea of having portfolio managers in managing multiple projects (Levin 2010, p. 93). The first counter-argument is based on the opinion that portfolio management is only critical in determining whether the expected efficiency will be achieved or not. Poor handling of project portfolio management can lead to a situation where the level of overhead exceeds the benefits. The other reason why some organizations are reluctant to adopt project portfolio management is because it brings a cultural shift. Project portfolio management comes with new roles, processes, and corporate relationships that may take a lot of time for members within the organization to adapt to the new culture (Brunel 2006, p. 28). Portfolio management introduces the aspect of change management for effective balancing of new personnel, technologies and processes. The introduction of project portfolio management in projects that are ongoing can kill the project momentum because a lot of training is needed to familiarize the workers with the new systems. The possibility of a cultural resistance is what scares many organizations from adopting project portfolio management. The other argument on why project portfolio management is not necessary is that the business value of a project can be delayed as a result of over-engineered projects (Brunel 2006, p. 59). It is also not a guarantee that project portfolio management can deliver the desired result when it is implemented for the first time. It takes a lot of effort for project portfolio managers to make things perfect during the initial stages. Trying to change everything at once is one of the reasons why project portfolio management can end up failing (Ibrahim 2011, p. 5). Gradual implementation of new tools, processes and roles for a group of projects under project portfolio management is necessary when an organization wants to increase the effectiveness of a project portfolio (Morris 2010, p. 71). The final argument on why project portfolio management is not necessary in increasing the effectiveness of a project portfolio is based on the fact that some very important projects can be excluded even af ter the organization has spent a lot of resources and time to work on them (Rad 2006, p. 9). Despite these numerous claims against project portfolio management, it is important for organizations to clearly understand the importance of project portfolio management when it comes to achieving both financial and organizational goals. Conclusion It is important to reiterate the fact that portfolio managers play a very significant role in increasing the efficiency of a project portfolio. Project portfolio managers have a responsibility of ensuring that an organization runs multiple projects in the best way possible. Project portfolio managers consolidate projects that have similar needs and characteristics for effective planning and reporting. Project portfolio management saves the leadership in organizations a lot of money and time because it provides the highest level of management when handling multiple projects. The project portfolio of an organization can be compromised easily when a project portfolio management system is not in place (Levin 2010, p. 119). Through project portfolio management, the executive is able to receive information about all the projects that are in progress without much struggle. Portfolio managers have special attributes that play a critical role in improving the processes and strategies when an organization is in the process of handling multiple projects. An organization that is yet to implement project portfolio management is bound to face financial and organizational challenges on a regular basis (Levin 2010, p. 119). Organizations that want to improve the performance of their projects and at the same time maintain operational and financial stability should consider project portfolio management. This is can done through setting up a project portfolio management office and hiring competent portfolio managers to assist project managers in handling multiple projects. References Brentani, C 2006, Portfolio management in practice, Butterworth-Heinemann, London. Brunel, J 2006, Integrated wealth management: The new direction for portfolio managers, Euromoney Books, London. Grobys, K 2009, Portfolio management, Books on Demand, New York. Ibrahim, N 2011, Project portfolio management in philanthropic organizations, GRIN Verlag, New York Kevin, S 2006, Portfolio management, PHI Learning Pvt. Ltd. , New York. Levin, G 2010, Interpersonal skills for portfolio, program, and project managers, Management Concepts Incorporated, London. Mahajan, A 2009, Portfolio Management: Theoretical and empirical studies, Global Indian Publications, New Delhi. Moore, S 2009, Strategic project portfolio management: Enabling a productive organization, John Wiley and Sons, New York. Morris, P 2010, The Wiley guide to project, program, and portfolio management, John Wiley and Sons, New York. Rad, P 2006, Project portfolio management: Tools and techniques, www. iil. com/Publishing, New York. How to cite The Role Of Project Portfolio Management In Increasing The Effectiveness, Essay examples