Similar characteristics can mean many things. It may be a similar technology used for the solution, it may be groups of projects serving customers in the same industry, it may be projects falling in the same estimated price range, it may be projects of similar complexity or a variety of other potential project-related similarities. It depends on how each organization using PPM chooses to categorize and group projects to the best of their advantage.
The main purpose of PPM is usually to determine the best mix and prioritization of projects in relation to the organization's overall goals and business strategy. As you can guess, these goals usually fall into one of three categories: financial strategy, business strategy, or technical strategy. All this is done while intending to honor constraints imposed by your executive management or possibly even external real-world factors. Typical attributes of projects being analyzed in a project portfolio management process include each project's total expected cost, consumption of scarce resources (people, equipment, etc.), expected timeline and schedule of investment, expected nature, magnitude and timing of benefits to be realized, and relationship or inter-dependencies with other projects in the portfolio.
There are many software vendors in the marketplace that state they are providing full-scale project portfolio management solutions. These solutions market themselves as offering the ability to analyze an organization’s portfolio of projects and group them to the benefit of the organization and the needs of the company’s key decision-makers. These tools incorporate projects together like an investment portfolio so that they can be tracked as a whole rather than just as individual projects. Most of these PPM tools offer their own measurement tools allowing users to analyze the performance of their entire project portfolio as a whole in terms of resource usage, cost measurements, progress reporting, and overall budget forecasting among other key reporting factors.
This ability to treat projects as a part of a larger group – a ‘portfolio’ – is often very enticing to executives in organizations who are more interested in how a group of projects are performing on a high-level and how that relates to the company’s performance and financial goals then to be involved in the day to day detail of ongoing individual projects. These executives aren’t usually so much concerned with the minute details of each project – they care more about how the similarly categorized projects are affecting their organization’s overall financial bottom line, strategic goals and initiatives, and resource availability. And if multiple projects are being run for one customer, it can provide the executive with a high-level view of how the company is performing for that one critical client without the need to get progress and financial information from multiple places and often several different project managers when going on site for a critical meeting with that one very important corporate client.
PPM allows for a nice consolidation of information across projects with similar characteristics or similar reporting needs. It can save project managers, program managers, and definitely executives’ time and effort – as well as dollars - by allowing for the high-level management view they need across the many projects they are overseeing. Tools that offer this type of project and program management can be very beneficial to organizations.