The Underlying Assumptions Of Ppm

Many organizations want to go straight from spreadsheets to PPM without ever understanding

the fundamental principles that govern project portfolio management. May I suggest five underlying assumptions that must be in place for organizations to fully adapt the PPM methodology? *

Five Underlying Assumptions of PPM:

1.Employees have a basic understanding of project management principles

2.The staff has a desire to select projects based on a structured system

3.The organization has a process for evaluating project performance based on specific goals and commitments

4.A team is created for portfolio governance

5.The organization has project management tools that support PPM functions

First, for an organization to effectively implement PPM it must have a staff that is capable of managing and supporting the process. This is often accomplished through the creation of a centralized project management office or PMO. The PMO consists of professional employees that understand the basic principles of project management and have the required knowledge and capabilities to create and manage a system for project standardization and consistency.

Second, once a PMO has been created, or a similar department or group, the PMO must have a desire to develop a structured approach to selecting projects. This approach should be based on a fair and balanced ranking system, one that selects projects based on a clear set of criteria and objectives. The projects selected should be aligned with business strategies and placed in portfolios that represent the tactical implementations of such strategies.

Third, after projects have been selected for the portfolio, they must be managed using a process that evaluates project performance based on specific goals and commitments. The PMO must be able to assess the ability of the project to continue to meet the original selection criteria. Projects that fail to provide adequate value or are inefficiently using resources must be delayed or terminated based on the established culture and practices of the PMO.

Fourth, in addition to the creation of a PMO or project group, new roles will need to be created to govern PPM and monitor the performance of the project portfolios. This team will be able to act for senior executives (or may include the executives) to oversee the portfolios.

Fifth, the PMO should review its current project management tools for support of the new PPM functions. If the existing software does not support PPM or doesnt provide the functionality needed, the PMO should evaluate alternatives and choose a set of tools that best fits the organizations goals and processes.

In conclusion, if an organization is seriously considering a move to PPM or is looking to improve its PPM processes, it must build a foundation that adheres to the underlying assumptions of project portfolio management.

*Adapted from Project Portfolio Management by Harvey Levine, pgs. 29-30.

by: Jessie L. Warner

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