Organizations often find themselves grappling with multiple projects simultaneously. To effectively steer the ship through these waters, it is crucial for Project Management Office (PMO) members to comprehend the nuances between project management and project portfolio management. This article aims to shed light on the key differences between these two disciplines, helping PMO members navigate the complexities of overseeing individual projects and the broader portfolio.
Interested in a detailed discussion of project portfolio management?
Our article "Project Portfolio Management - An Introduction For Practitioners With Little Time On Their Hands" offers comprehensive knowledge and insights.
Project Management
Project management is the discipline that focuses on planning, executing, and closing individual projects within an organization. It involves coordinating resources, tasks, timelines, and budgets to ensure that a specific project's goals are achieved within the defined constraints. The Project Management Institute (PMI) defines project management as "the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements."
Key Aspects of Project Management:
Scope Management: Defining and controlling what is included in the project.
Time Management: Planning and adhering to project timelines.
Cost Management: Budgeting and controlling project expenditures.
Quality Management: Ensuring project deliverables meet the specified standards.
Risk Management: Identifying, assessing, and mitigating potential project risks inside the organization.
Project Portfolio Management
On the other hand, project portfolio management (PPM) takes a higher-level view, focusing on managing an organization's entire portfolio of projects. According to the Project Management Institute, PPM is "the centralized management of one or more portfolios that include identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work."
Key Aspects of Project Portfolio Management:
Strategic Alignment: Ensuring projects align with organizational goals and objectives.
Prioritization: Evaluating and selecting projects within a portfolio based on their strategic importance.
Resource Management: Optimizing resource allocation across multiple projects.
Risk Management at Portfolio Level: Identifying and managing risks that may impact the entire project portfolio and the overall objectives.
Performance Measurement & Reporting: Monitoring and evaluating the overall performance of the project portfolio.
To enhance your understanding of these concepts, consider consulting reputable sources such as:
Project Management Institute (PMI): The PMI is a globally recognized organization that offers a wealth of resources on project management and project portfolio management. Visit their official website at pmi.org.
"A Guide to the Project Management Body of Knowledge (PMBOK Guide): " This guide is a comprehensive resource that outlines the fundamental principles and practices of project management.
"Project Portfolio Management: A View from the Management Trenches" by E. Epstein and R. Levin: This book provides practical insights into implementing effective project portfolio management strategies.
When it comes to PPM, the work of PMO members plays a crucial role
In the ever-evolving landscape of project management, PMO members play a pivotal role in ensuring organizational success. Understanding the distinctions between project management and project portfolio management is essential for PMO members to navigate the complexities of overseeing individual projects and the broader project portfolio. By leveraging the principles outlined in this article and consulting reputable sources, PMO members can contribute to the strategic success of their organizations.
Isn't PPM and PM software basically the same thing? Very much not.
PM and PPM are related concepts in the business world. They are often confused. Especially when investing in a software solution, you should be sure what tools you are looking for. This very condensed list offers a quick overview of the key differences. And they are significant.
Project Management (PM) Software:
- Focus: PM software is designed to manage individual projects from initiation to completion.
- Scope: It deals with the planning, scheduling, execution, and tracking of tasks within a single project.
- Features: PM software typically includes tools for task management, scheduling, collaboration, and progress tracking.
- Why PPM won't work with it: There is no aggregation to a portfolio - and hence portfolio features are missing. In addition, most PM solutions do not have suitable KPI / Benefit section.
Project Portfolio Management (PPM) Software:
- Focus: PPM software focuses on managing a collection or portfolio of projects.
- Scope: It involves the strategic management of multiple projects to ensure that they align with the organization's overall goals and objectives.
- Features: PPM software includes tools for project prioritization, resource optimization, management of financial resources, risk assessment, and reporting across multiple projects.
- Why PM won't work with it: PPM is all about the forest. PM is all about the individual tree. Features allowing for individual planning and tracking are not the focus.
If you want to learn more about what constitutes a good PPM software, feel free to go down the rabbit hole here.
In summary, while PM software is more project-centric, dealing with the day-to-day management of individual projects, PPM software takes a higher-level view, helping organizations prioritize, monitor, and optimize the performance of their entire portfolio of projects. The choice between PM and PPM software depends on the specific needs and goals of the organization, whether they are managing a single project or a portfolio of projects. Some organizations may use both types of software in conjunction to address different aspects of project and portfolio management.
