Project Portfolio Management is not just about managing multiple projects. Harvey Levine describes PPM as “project portfolio management to maximize the contribution of projects to the overall well-being and success of the business.” He goes on to explain that for PPM to be effective, projects must:

1. Be aligned with the strategy and objectives of the company.
2. Be consistent with the values ​​and culture of the company
3. Contribute (directly or indirectly) to a positive cash flow for the company.
4. Effectively use company resources, both people and resources.
5. It not only provides current contributions to the company’s health, but should also help position the company for future success.

Over the next few days I will be discussing each of these steps in detail. First, let’s talk about some ideas to help align projects with a company’s strategy and goals.

Align projects with a company’s strategy and objectives

In a 2004 survey by Pricewaterhouse Coopers, only 2.5 percent of global companies achieve 100 percent project success. Another research report from Business Improvement Architect found that the number one reason for project failure is that most organizations fail to ensure that every project they implement aligns with their organization’s core strategies. In fact, 80 percent of organizations had no formal business case for developing Project Management Offices.

So how do projects align with corporate strategies and goals? Michael Stanleigh suggests three things to help:

1. Conduct a review of all projects that are currently underway within the organization, as well as those that have been completed within the past year.
2. Ask each department to list all the projects they are currently working on. What is the goal of each? What is the strategic alignment, if known?
3. Create an inventory of all projects in the organization, regardless of size or scope, that are currently underway in all departments and throughout the organization.
4. Measure each of these projects. Are they on time and on budget according to the original scope? Do they meet customer requirements as defined? Or, are there no measures in place?
5. Identify projects completed in the last year and measure your success rate. These lessons learned will help to identify the prioritization of projects in the next step. For example, if many projects were unsuccessful due to lack of resources, the resources needed to complete future projects should be considered a criterion for determining the feasibility of the project. If a project requires a lot of resources, they may score low on this criteria. If you decide it’s a strategically important project, you’ll need to make sure the right resources are available or the project could fail.

Develop a systematic approach to prioritizing all projects.

1. Develop criteria against which to prioritize all projects. Include impact on corporate strategy and clients. This is best done with a subcommittee of senior management.
2. List all projects along with their goal, purpose, and strategic alignment and the identified criteria needed to determine the expected impact each project will have on the organization, its departments, and its customers. This process will allow you to quantitatively rank each project and determine its level of priority.
3. Establish a senior management committee to review and evaluate project prioritization on a monthly basis. This committee will provide final approval of all project implementation priorities.

Align projects with corporate and departmental strategic plans.

1. Review corporate and departmental strategic plans and, if none exist, meet with the senior executive team to understand key strategic priorities.
2. Examine all projects to determine their alignment with corporate strategic objectives. This strategic alignment will demonstrate how the successful execution of each project will support the corporate and/or departmental strategic plan.
3. Finish projects that are of low priority or that are not linked in any way to the corporate and/or departmental strategy. Their immediate termination will ensure that they stop costing the organization money, resources, time, and lost customers. Projects that are not linked to corporate or departmental strategy do not add measurable value to the organization.

I hope these ideas help your organization achieve better project alignment. As Harvey Levine suggests, this is just one of the five important factors in project portfolio management. My next article will focus on helping make projects more consistent with the company’s value and culture.