Many companies concentrate their management efforts of executing individual projects yet fail to give the same attention to the project portfolio itself. This results is a below par performance and returns for the portfolio as a whole. In turn, this can lead to the overall success of the projects in an organization. A project portfolio management solution can rectify this situation by offering the following benefits.
The right project mix is in the portfolio to maximize overall returns. A portfolio management solution seeks to optimize the returns of the entire portfolio, selecting that most value-producing projects and ensuring that the funds are directed to deserving initiatives. This minimizes overlaps and redundancies between projects, saving costs and time.
The risks posed by projects in the portfolio are balanced. A conservative portfolio might minimize the risk and preserve principal, but it can also limit the potential returns. On the other hand, an aggressive portfolio offers greater odds of a win but a higher risk at loss. A portfolio management solution diversifies the project portfolio, balancing risks with potential returns.
Resources are optimally allocated across those projects. With a limited number of people, all projects should compete for resources. Portfolio management solutions will quantify, compare and prioritize projects to help companies identify and staff the most valuable ones instead of unwittingly wasting resources on other less useful efforts.
Performance problems are corrected before becoming major issues. Portfolio management solutions cannot eliminate performance problems, but it can help address them early on before they fester. Swiftly recognizing, escalating and responding to execution issues keeps projects on track and avoids compromising dependent or downstream projects.
Projects remain aligned with business goals throughout execution. Portfolio management solutions offer continuous management oversight, regular coordination and communication, and constant course correction to minimize any project drift. It redirects projects when business objectives change and maintain alignment.
Projects receive support and oversight for completion. By elevating oversight and prioritization responsibilities to the executive level, a portfolio management solution ensures that projects receive the backing needed to succeed. Executives are given the authority and business knowledge to ensure alignment between business strategies and projects.