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Introducing product portfolio management: project portfolio management is about aligning projects with business strategy, doing them, and doing them right.

Article Excerpt
All projects are important. Some projects are more important than other projects. Companies create business strategies. Businesses strategies change with changing market forces. So, what's a company to do when pursuing multiple projects that share company resources? This is where project portfolio management (PPM) comes in. PPM is a disciplined approach to objectively analyze potential investments, some requiring shared resources, against a common set of criteria so that a company can pick the right things to do. Up to a few years ago, PPM was typically associated with information technology (IT). There, explains Dennis Gaughan, a vice president at AMR Research, Inc. (Boston, MA; www.amrresearch.com), "IT projects would get funded on a FIFO basis, or whoever screams the loudest, or whoever has the most pull within the organization. The projects would not necessarily be funded based upon the merits of how that investment was going to drive some sort of measurable return to the business."

What's PPM?

Portfolio management is a business management discipline, explains Patrick Tickle, vice president of products for Planview, Inc. (Austin, TX; www.planview.com). "It's about optimizing your business strategy against your two most precious fundamental resources: your people and your money." In automotive, for example, PPM "helps the product development team and management understand the interdependencies between development projects with shared platforms, which facilitates on-time product delivery."

Contrast this to project management (PM). Explains Gaughan, "PM tools manage the execution of a specific project. They don't really have a lot...