Project and Portfolio Management (PPM): Aligning Strategy and Execution

Posted by Gonçalo 1 15th Oct 2023

The Importance of Aligning Strategy and Execution

Do you believe that the strategy your organization has envisioned is being executed correctly? Do you think all the investments your organization makes are serving to implement this very strategy? If not, you may need to implement a Project and Portfolio Management (PPM) process.

A strategy only brings value when it is executed. Its validation, whether it is being correctly implemented or is suitable, is only possible through continuous monitoring of execution. As organizations implement various initiatives, these initiatives begin to compete with each other for the organization's funds and resources, sometimes even having identical scopes or intersecting scopes that do not justify their coexistence. To overcome these challenges, in addition to monitoring initiatives, organizations must be able to manage people, processes, technology, time, and financial resources appropriately. To address these challenges, organizations should consider implementing a Project and Portfolio Management (PPM) process.

Understanding Project and Portfolio Management (PPM)

PPM is the process that allows centralized management of projects, programs, services, and other types of initiatives to ensure they are aligned with the business strategy and bring value to the organization.

The Framework of PPM

PPM provides an integrated framework for strategically evaluating, selecting, prioritizing, and funding initiatives. PPM also enables the monitoring of initiatives beyond individual project or program supervision, including the cumulative performance of all of an organization's investments and their impacts on each other, as in an organization, the whole is always greater than the sum of its parts.

Measuring the Value of Initiatives

With PPM, it is possible to assess the value that different initiatives are bringing to the organization, not only in terms of tangible metrics such as cost values or return on investment but also in terms of harder-to-measure indicators like brand impact, customer impact, or employee impact.

Implementing PPM for Strategic Alignment

By implementing a PPM process, organizations become capable of identifying priorities, making investment decisions aligned with those priorities, allocating resources to those investments, and monitoring the execution of their portfolio of initiatives. Thus, when implemented, the PPM process allows managers to execute initiatives that provide the best combination of benefits (revenue value, return on investment, brand impact, etc.) and strategic alignment, and consequently, have the greatest impact on strategic objectives, in other words, have the highest value for the organization.

Benefits of PPM

One of the major benefits of implementing a PPM process is that it establishes objective criteria for the evaluation, selection, prioritization, and monitoring of initiatives. By analyzing and evaluating potential project metrics such as return on investment, costs, schedule changes, etc., PPM brings a higher degree of confidence in investment decisions made. Additionally, best practices in initiative management are implemented at all levels of the organization, making the organization more efficient.

Managing Risks and Ensuring Consistency

Another significant benefit of PPM is that through the implementation of a periodic initiative portfolio review process, organizations become capable of identifying risks and problems as early as possible in the life cycle of initiatives, before they bring potential financial impacts. Organizations are thus empowered to decide which initiatives should continue and which should be canceled.

Additionally, the portfolio review process helps organizations gradually eliminate inefficiencies in their processes, ensuring a consistent approach to all initiatives.

Cultivating a PPM Culture

As presented, the implementation of a PPM process introduces various improvements at different levels of organizations, making it a worthwhile consideration. With all these advantages, the benefits of a PPM culture in an organization are clear. Despite representing an investment, it introduces several levels of savings that are very appealing in the end.