Every company has to collect and prioritize their development initiatives. The decision to implement a development initiative as a project is made by Project Portfolio Management. The purpose of the portfolio is to maintain the “big picture” to avoid sub-optimization, double or overlapping development efforts and resourcing conflicts.
The four cornerstones of Project Portfolio Management are
Typically, the project portfolio is managed by the PMO/DMO that is responsible for keeping the project portfolio up-to-date, managing project dependencies, and evaluating new project proposals. The development initiatives in the project portfolio should be evaluated and classified using common criteria and prioritization. The PMO/DMO supports the Project or Development Portfolio Steering Group in deciding which projects are started, stopped or postponed and where the focus in the project portfolio lies.
An essential part of managing the project portfolio and Enterprise Development is assessing how appropriate the project portfolio is and making decisions on it regularly. Every project in the portfolio has to have a valid business justification, and all project dependencies must be identified. The projects in the portfolio often have different Project Managers, so it is very important to identify all project dependencies and communicate changes clearly.
Figure 2.6.1 Changes impact processes and systems to different degrees.
Project Portfolio Management can also be organized as a corporate-level function. In this situation, IT complies with the general company-wide principles of portfolio management.