Executives go through various processes to determine which projects to fund internally and which opportunities to engage in externally. For instance, a high-technology company may develop a new product or build a new facility internally, and may provide installation services externally.
Once these decisions are made, managing the execution by tracking the schedule, costs, resources, and milestones is critical to ensure project success. Many managers have the additional complexity of overseeing a supply chain to ensure that equipment, material, and resources are available on time at the point of need and use. The question is, how to integrate project management process and portfolio management process in order to manage projects profitably— and ensure business value? Managing visibility in three important areas of your portfolio and project management processes will help ensure success:
Portfolio Prioritization Model
Are you working on the most-profitable projects? Leaders of best-in-class companies can prioritize projects based on a set of predefined criteria—such as revenue, return on investment, importance to future strategic needs, alignment to core business, and risks. For external projects, that may mean ranking each by priority to help determine the proper pricing schedule for the work. For internal projects, priority ranking can determine whether it makes sense to fund the project and the appropriate resources to commit to the work. Comprehensive portfolio management tools can help prioritize and align the project portfolio to ensure that limited resources are deployed for maximum impact.