A strategic portfolio of programs, projects, and initiatives has balance and delivers value. But how do you assemble a strategic project portfolio? I want to share with you a simple five-step Project Portfolio Management approach I learned long ago: DDAPM.
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The Project Portfolio Management Process
The Project Portfolio Management process can be described in five letters: DDAPM.
DDAPM stands for:
- Destination
- Direction
- Alignment
- Prioritization
- Management
Project Portfolio Management Step 1: Destination
You must start with an understanding of your organization’s strategic destination. This starts with its mission and vision statements and includes any strategic planning documents. These will draw in market assessments and assessments of competencies, capacity, opportunities, and threats. It will also access market and sociological forecasts.
Project Portfolio Management Step 2: Direction
Next, you need to determine the direction the organization needs to travel, to reach its destination. What changes will it need to make to its policies, processes, staffing, capabilities, technology, product or service lines, logistics, structure, geography, assets, and culture, to achieve this?
Each change may give rise to one or more potential projects or programs.
Project Portfolio Management Step 3: Alignment
Next, you need to ensure that these programs are all aligned to the chosen direction and that no two are either overlapping and trying to achieve the same thing, or conflicting with one another.
However, some ‘strategic redundancy’ can reduce risk – although there are costs. If two projects aim to achieve the same critical outcome in different ways, then if one fails, you have a backup.
Likewise, you may consider some strategic misalignment. You cannot know what the future may hold. So, a small investment in projects or programs that take your organization towards a variant destination can provide resilience, if events mean you need to change your destination. If they do not happen, you will abandon those projects and write off the cost as insurance and strategic risk mitigation.
Project Portfolio Management Step 4: Prioritization
Next, you need to prioritize the basket of possible projects and programs. This is for importance – which will you definitely do, which will you hold on, and which will you abandon? This also sets you up to allocate investment budgets linked to importance.
Prioritization is also for urgency and sequencing. Which will you do first, later, and far down the program?
Things to consider, when determining priorities, include:
- Value: cost and benefit
- Risk: scale, complexity, novelty
- Strategic importance: core asset, enabler, risk-spreading, tactical
Project Portfolio Management Step 5: Management
Once you have your projects and programs prioritized, you start the management process by scheduling them into time blocks of around ¼, ½, or even whole year precision. And the next task is to allocate key personnel: Sponsors and Project/Program Managers
From there, the projects and programs have the key components they need to start managing their own delivery. But the portfolio function also needs to consider the governance of each one – its oversight and decision-making. This means both the top-tier board or steering group and allocation to a Portfolio, Program, or Project Management Office (PMO) to provide support, guidance, services, assurance, and data collection and consolidation services.
Recommended Videos
Carefully curated video recommendations for you:
- What is Project Portfolio Management? | Video
- Introduction to Portfolio Management – with Murali Kulathumani | Video
- What is a PMO? | Video
- Working with a PMO and Building a PMO Career – with Curtis Jenkins
- What is Strategic Project Definition? | Video
- Business, Strategy, Projects: Project Management as a Strategic Business Activity [Livetream]
Recommended articles
- Introduction to the PMO – The Absolute Essentials You Really MUST Know
- More of Peter Taylor’s Project Management Office Essentials
- Setting-up PMO 3.0 |The Project Management Office in the Age of Digital Transformation
What Kit does a Project Manager Need?
I asked Project Managers in a couple of forums what material things you need to have, to do your job as a Project Manager. They responded magnificently. I compiled their answers into a Kit list. I added my own.
Check out the Kit a Project Manager needs
Note that the links are affiliated.
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For more of our videos in themed collections, join our Free Academy of Project Management.
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