IT Alignment

Project Portfolio Management

Project portfolio management (PPM) denotes a central function in IT Alignment. PPM is applied by enterprises to meet business strategies and achieve strategic objectives. It is an integral element of the strategic plan of a company. The overall objective of PPM is to maximize value from the total investment budget. Thus, the realization of value to the company is a measure of portfolio success. Business value increases by effective use of project, program, and portfolio management processes that help meet strategic business goals. Programs and projects are components in the layer below a portfolio. Project portfolio management aligns programs and projects to strategy and value creation.

PPM must align business goals and limitations with business strategists

Business goals encompass all the strategic endeavors, such as geographical expansions, new product introductions, structural redesigns, acquisition of firms, location moves, outsourcings, changes in supplier or partner relationships, and so forth. These must be evaluated based on the requirements, scope, and added value. PPM strives for optimal resource and budget allocations and preschedules projects to best accomplish the organization’s goals. This requires a thorough project analysis from PPM while keeping in mind goal setting and value delivery. The selection and prioritization of projects depend on how these projects support strategic business goals. The resources and budgets are allocated accordingly. Furthermore, PPM must schedule projects based on priorities, cash and resource availability, and project interdependencies.

Business limitations are budget, human resources, skills, assets, and risks. These must be analyzed and preplanned by PPM. Furthermore, internal and external dependencies must be considered, such as supplier conditions, lead times, policies, contractual obligations, and logical dependencies from and to other projects. Laws and regulations are also highly relevant to PPM plans.