What Is PPM (project And Portfolio Management)? - TechTarget

What is project portfolio management?

Project portfolio management, or PPM, is a top-down process. A group of decision-makers in an organization, led by a portfolio manager, examines each potential project to first determine if the project supports the goals and objectives of the business. Projects that fail this first criterion are eliminated from selection. The PPM team also examines the interconnections and contingencies among projects. These relationships can affect the ranking, prioritization, funding and selection of projects within the portfolio.

Once projects are identified and prioritized, the PPM group monitors projects that are in motion. Poorly performing projects can affect other projects within the portfolio, so consistent monitoring of the portfolio is needed to optimize overall value. At mature organizations, PPM decisions are made under the auspices of or in conjunction with a project management office (PMO) -- or an enterprise project management office in the case of organizations that have multiple PMOs assigned to individual projects.

PPM managers often report to a CFO or COO, but this can vary depending on the structure, size and complexity of an organization -- as can the size of a PPM team, which on average ranges from two to 20 people. PPM's centralized governance structure helps ensure projects add up to more than the sum of their parts. But portfolio management can be difficult to implement, requiring an understanding of the organization's strategy and business objectives, a consensus on which projects best achieve those objectives, enterprise-wide application of best practices and strong executive-level support, among other demands.

TechTarget's introductory guide to project portfolio management examines the nuts and bolts of PPM, laying out the steps involved in the process, its benefits and challenges, and how it differs from other approaches organizations use to maximize the value of their projects. We also delve into the broad market of PPM tools and software, including their ongoing adaptation by vendors in response to new ways of working and the need for enterprises to pivot quickly in the face of global crises, such as the COVID-19 pandemic and the war in Ukraine. Throughout the guide, there are hyperlinks to in-depth explorations of these and other relevant PPM topics, as well as to definitions of key concepts such as Agile project management, value stream management and risk-reward ratio.