The companies understand the significance of Enterprise Project Portfolio Management, but the associated detailed points usually need more detailed insights. Therefore, the benefits, accompanied by challenges and required information on methodology, are covered in this article.
What Is Enterprise Project Portfolio Management (EPPM)?
Enterprise Project Portfolio Management oversees the alignment of different projects in the company with its overall objectives, methods to increase efficiency, and efficient utilization of available resources and employees' efforts. Conversely, it utilizes business strategy to categorize and filter the suitable projects for the company's goals.
How to Build an Enterprise Project Portfolio Management Process?
The process needs to be built with strategy. Here is a template for reference to be customized as per the needs.
Create a Project Inventory
You need to have a detail of what you want to organize. This step includes identifying and enlisting all projects and an overview of their details. Then arrange the projects based on priority and the company's objectives.
Discuss Critical Questions
Critical questions decide the criteria for priority and suitable fit for the objectives. Questions can be based on the priority and significance of the project concerning the goals, fund worthiness of projects, risk analysis, and underperforming projects. Questions should also be based on improvement techniques, employee encouragement, and cost management.
Develop Your EPMO
Enterprise Project Portfolio Management Office should be developed at the place of strategic planning for ease of access to multiple projects and programs.
Align Your Projects
The selected projects should be aligned again concerning the strategy and goal of the organization to evaluate budget allocation and planning effectively.
Appoint Your Projects
Each project should have a Project Manager for accountability. After alignment and prioritizing the projects, it is the correct time to assign a Project Manager.
Appoint an Implementation Team
The implementation team manages the project and updates different departments with relevant information. It includes the Project Manager, Portfolio Manager, Stakeholders, EPPm team members, and Program manager.
Launch Your EPPM
Execute or launch the EPPM designed to track the ongoing projects, get their success rates, and be updated about external and internal project resources and the objectives being completed.
Monitor Execution and Compliance
The primary action from EPPM will be to monitor the project status and govern it for any queries. The updates are to be forwarded to stakeholders.
Garner Actionable Business Insights
EPPM should be designed to provide an overview of roles and responsibilities exercised by each member to track individual progress status. It also enlightens about different problems faced and requirements of reallocation.
Set Up Patterns of Traceability
Traceability understands the basics of projects regarding designation, time, and actions. Thus, to avoid communication gaps and wastage, set up the EPPM system accordingly.
Create a Document for Lessons Learned
An effective document with detailed analysis and brainstorming sessions with project members should be created. The achievements, failures, and recommendations noted through lessons learned are crucial for new projects and overall organization.
Signs Your Organization Is Ready for EPPM
The readiness of the organization for EPPM can be determined through questions on these three topics:
Are the team members aware of the organization's strategy enough to speak about it fluently? Also, do they understand the significance of their work concerning the organization's business strategy?
Is the time spent progressing the project, and have you had the experience of successfully completing projects?
Can the leaders at the organization practically execute the projects? Additionally, if the current projects are based on multiple business units? Also, is it possible to deliver business-critical projects yet?
The negative answer to two or more questions indicates the need for EPPM.
How Is Enterprise PPM Different from Traditional PPM?
Enterprise PPM is concerned with all the projects, programs, and portfolios in an organization, while traditional PPM is focused on the business unit level. As a result, traditional PPM is more focused on singular teams or business units, improving the overall delivery of work. Enterprise PPM checks the relevance of projects and programs according to business goals and involves cross-functional teams and stakeholders.
Benefits of Enterprise Project Portfolio Management
Numerous benefits are explained in detail:
A project's alignment includes departments, budgets, resources, skill sets, and schedules. It ensures efficient results.
With in-hand information on different aspects of the project, the problem can be readily predicted. For example, wrong resource allocation and budget constraints can be predicted based on the current needs and money usage.
Planning, Not Reacting
The predicted risk holds uncertainty. Reacting to such scenarios may lead to clutter and disorganization. Thus, planning and observation in those circumstances is a better option.
Better Visibility and Control
It helps in managing the recommended change in set processes. Multiple approval requests provide time to reflect on the requirements of the request.
Enterprise Project Portfolio Metrics
This section involves keeping criteria to measure the success of EPPM. The criteria can be financial, qualitative data, or based on the role. Specifically, the metrics can be employee satisfaction, costs, number of days to complete the project, payable and receivable amounts, and several invoices. In addition, market share value, key performance indicators, return on investment, number of users, and other points can be used as metrics.
Main Challenges of Enterprise Project Portfolio Management
Since EPPM is based at the organizational level, the challenges hold complexity and require a tactical approach to solving them. Therefore, some of them are enlisted:
Stringent Financial Management
Finance is something management needs to be very particular about. Thus, well-planned controls are required to increase the return on investment and efficiency.
Lack of Specific Management Skills
Lack of specific management skills can be countered by training and effectively choosing the already present skills.
Choice of EPPM Tools
EPPM tools must be selected with considerable logic and reason to avoid replacement after a certain time.
Since few metrics are important, focus on the KPIs concerning significant metrics only.
Why is an Enterprise Portfolio Management Office Important for Organizations?
Enterprise Portfolio Management Office manages the Enterprise Project Portfolio Management system. They are responsible for executing set EPPM processes by setting up rules and regulations for different categories.
What is an EPMO?
EPMO distributes resources, removes duplicates in resources, manages the teams leading them to goals, evaluates their performances, recommends improvements, and takes decisions based on priority objectives.
What is the role of an EPMO?
Based on enterprise portfolios, EPMO monitors departments and interacts with executives.
Why are EPMOs needed?
Making an EPPM can be partially relied upon; rather, EPMO is required for implementation. EPMOs are not department specific and require support from executives. They must raise awareness about the projects, prioritize them, show their significance to the organization's objectives, and connect and control the departments.
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EPPM is crucial for determining the relationship between the significance of projects concerning the company's goals and objectives. Therefore, it prioritizes the projects based on the latter and sets up rules along with exercising central governance over the organization's departments, leading the company to success.
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