Choosing a Portfolio Management Tool

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Let us begin out with the use of the PPM or Project Portfolio Management. The PPM is all about the maximization value of all investments that are grounded on the business’ strategic objectives and tolerance for risks. That’s just it.

It does not need to talk about making balances as some people might tell you. Terms such as ‘scorecard’ or ‘balanced portfolio’ or the ‘strategic alignments’ are famously utilized descriptions that do not really have important relationship to the defensible and rigorous project portfolio maximization practices.

One of my customers spent at least 3 months just by balancing his portfolio of hundred different products with some packaging configurations for advertising in more than ninety countries. Then they suddenly asked us to conduct analysis for it.

What we have found was that they are obtaining 90% of their overall value from just 50% of their balanced portfolios.

They’re going to conduct their work twice for just 8% in value increase. That was the moment when their eyes opened.

So, whenever you hear someone who’s talking about making this strategic or balance portfolio, figure out exactly how that person relates to the value of maximization. Typically, it does not.

The value maximization is not just about the monetary metric, even though they’re typically the very important ones. Also, the value is determined by risk tolerance and strategy. Given with the same set of metrics and projects to select from, the company is attempting to maximize their short terms revenues on choosing various projects that the R&D operated company that is targeting for constant long term growths.

But, why?

Factors such as various risk profiles, not similar time horizons, and not similar capitalization models could all influence on how the project should be valued. The projects that have similar monetary metrics like the eNPV or expected net present value usually have important differences in their values from one business to the other.

You should avoid a project portfolio management tool whose rank solely projects on the monetary metrics like the ROI or NPV. There are some metrics that could add some significant strategic bottom line values to portfolios. The valuing is mainly on the monetary metrics would miss this value. Figure out if the applications could measure the entire project’s values that are grounded on its quantifiable value-adding parameters which are vital for you.

Make sure that the project portfolio management tool that you want to consider should have its direct link to the bottom line of your business and could maximize and capture all your portfolio’s values. Visit now.

You may also take a look at if you want to read/watch further.


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