In recent months, it seems that we hear about another company either going out of business or reducing its workforce, nearly every day. This seems staggering as more workers lose their jobs and companies attempt to remain solvent. But what relevance is project management to these recessionary conditions? How can project managers be of assistance to their organizations?
If you have not done so already, now is the time to introduce the concept of "portfolio project management" or PPM to your PMO and to senior management. PPM is a method for organizing projects or groups of projects into key categories which can be more easily managed. The idea is to find the right mix of projects that best maximize an organization or departments goals and objectives while making the best use of resources and rate of return. (The concept stems from the management of financial portfolios.) Each project is measured against its ability to meet the goals and objectives of the portfolio and those that are not successful may be reevaluated to determine if they should be dropped from the portfolio.
How might this approach be helpful to an organization, especially in tough economic times?
First, an organization must be able to react to the current conditions as well as be proactive and take measures that will help the company ride out the recession. This means that the goals and objectives that the company outlined five or even two years ago may no longer be applicable in the recession. By determining any changes that are needed to corporate goals and objectives, projects can be aligned with those efforts.
Second, if a project is on time and on budget but meets no new goals, is it really important to continue the project? Can it be shelved for a few months? Is it still vital to the company's mission, and if not can we close it? This can be really difficult to think that time and money has been spent to work on project that will be placed on hold or even killed, but if it will save jobs or help to bring in revenue to focus elsewhere, it might be worth it. For example, a new server replacement here and there may be critical to day-to-day operations, but is this really the best time to upgrade the entire network infrastructure?
Third, we've all worked on projects that really had little or no relationship to corporate efforts - the ones that are 'pet projects' to one of the senior managers and to whom you can't say no. With PPM, these types of projects have little hope of getting off the ground as they will be unable to meet the criteria for being included in one of the portfolios. With tough economic times, it is difficult to justify these types of projects and easier to decline them due to a shortage of resources for the company as a whole. The project selection process becomes more democratic.
Lastly, since projects are reviewed not as individual components, but as to their relationship within the portfolio, better control is achieved (i.e., not only is the status of a project important, but so is the overall health of the portfolio.) As each corporate goal and objective is evaluated each year, so are the portfolios and the projects therein - what is working versus what is not, which projects and portfolios are profitable and which are showing over-runs? These measures should be viewed quickly enough to determine which steps to take, even if that means eliminating a project or a portfolio. We are all ware that financial times are too difficult to wait to see if a project will overcome its losses and show some eventual success. As managers, we need earlier identification of issues for projects, portfolios, and even the recognition of troubled programs - this is key to eliminating waste and making better use of resources, before any further staff are cut or corporate losses become unfortunate but necessary.
Here are some useful links to sites that offer more information about PPM:
http://www.michaelgreer.com/ppm.htm
http://www.ibm.com/developerworks/rational/library/apr05/ciliberti/index.html
http://projectmanagement.ittoolbox.com/topics/ppm/
http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470126884.html
http://www.pmsolutions.com/uploads/pdfs/ppm_maturity_summary.pdf
