By Dr. Carlos Colón, PhD, PMP, PMI-ACP, PMI-SP, PMI-RMP, PMI OPM3P, CSOE, SMC, MCTS, CQIA, CCMMI, DAWIA (Level I & II)
Professor of the Strategic Planning and Organizational Analysis course in the Master in Project Management Program at the University for International Cooperation.
Many organizations usually start the endeavor of adopting their project management practice by focusing on a couple of project management best practices or a project management methodology, which is not a bad idea. Managing a single project usually includes creating some sort of project guidelines or a project management plan (formal or informal) which defines how the project is going to be handle from its inception to its closing (PMI, 2013). If the organization needs to handle more projects, the number of projects increases, or the organization plans of continuing use projects as vehicles to reach their strategic goals, action plans and continuous improvement, probably they should take a closer look to the Organizational Project Management viewpoint (OPM) and portfolio management.
The PMI standard named Implement the Organizational Project Management: A Practice Guide, state that Organizational Project Management (OPM) integrates business models, organizational culture (which I think is the main ingredient) and project management practice guides to perceived benefits from the project management practice (PMI, 2014). Why the organizational culture is that important, well this is the particular way a company conduct their business, concepts such as norms, values, behavior patterns, rituals, traditions, how they communicates, think, as well as their key distinctiveness (Schein, 2010); with this type of leverage would you dare to ignore this? Probably not!
On the other side we have Portfolio Management which besides gathering project and programs that are aligned with the business strategy, it also provides visibility to managers to strategically allocate recourses between high, urgent and low priority projects (Chiang & Nunez, 2013). A healthy portfolio also help to understand and manage project risks in term of analyzing the probability of the success or failure of their populated projects (Sanchez, Benoit, Bourgault, and Pellerin, 2009). Organizational Project Management practices and a portfolio that establish a fitting correlation between the multi-project business and the overall strategy of the organization, seems like a sound blend to effectively help the organizations to reach their planned profits and revenues. This correlation, for once promotes an environment that helps to leverage the right projects to the right initiative, so each project element ties directly back to your organization’s objectives (Carliner, 2004); additionally to elicit the projects and programs that add the most value to the organization, a combination of OPM and Portfolio Management also:
- Capacity Planning and demand management visibility – so it helps to answer the ancient question of how many resources I need to manage this project effectively, what is my production of work capacity, as well provides input for proper resources categorization, evaluation and characterization of Statement of Works.
- Financial Management – This not project financial but organizational and portfolio financial. This type of information is crucial for the organization since it will help management in the financial decisions (program costs and their benefits, project/programs expenditures against the projects/programs budgets).
- Projects/Programs dependencies – A portfolio present an incomparable opportunity to gain understanding of what projects have dependency between them, between programs. A proper organizational Work Breakdown Structure that comprehend the project, program and portfolio domains will allow business and project management stakeholders to measure where we at in these domains.
- Organizational and Portfolio Communication – This is synonymous of support to sound decision-making, continuous improvement, management of risks and issues that trespass several projects, programs or the entire organization, operational efficiency and off course timely/relevant information.
As you can see putting effort to and focus at the organizational level to these two will indeed deliver tangible benefits where a project methodology alone will probably take more time to deliver.
Chiang, I. R., & Nunez, M. A. (2013). Strategic alignment and value maximization for IT project portfolios. Information Technology and Management, 14(2), 143-157. doi:http://dx.doi.org/10.1007/s10799-012-0126-9
Carliner, S. (2004). What do we manage? A survey of the management portfolios of large technical communication groups. Technical Communication, 51(1), 45-67. Retrieved from http://search.proquest.com/docview/220997298?accountid=35812
Project Management Institute. (2014). Implementing Organizational Management: A Practice Guide. Newtown Square, Pa: Project Management Institute.
Sanchez, H., Benoit, R., Bourgault, M., & Pellerin, R. (2009). Risk management applied to projects, programs, and portfolios. International Journal of Managing Projects in Business, 2(1), 14-35. doi:http://dx.doi.org/10.1108/17538370910930491