No matter how you slice and dice it, project portfolio management consists of five phases, as shown by the shaded boxes in Figure 20.1.
In the illustration, we have embedded a generic project in the phases to illustrate the principles involved and the possible courses of action that a project may take over the course of its life. All of the discussions that follow in the remaining sections of this chapter are based on this diagram.
Also shown in Figure 20.1 is the changing status of a project as it moves through this life cycle. Note that there are eight different stages that a project may be in during this life cycle. They are as follows:
Proposed. A proposed project is one that has been submitted to the portfolio with a request that it be evaluated regarding its alignment to the portfolio strategy. A project that does not meet the alignment criteria may either be rejected out of hand or returned to the proposing party for revision and resubmission. Projects that are returned for revision are generally only in minor noncompliance, and following the suggested revisions should meet the alignment criteria.
Aligned. A proposed project is aligned if it has been evaluated and determined to be in alignment with the portfolio strategy. Once it has been determined to be aligned, it will be placed in one or more funding categories for future consideration. At this stage, the proposing parties should begin preparing a detailed plan. The plan will contain information that will help the portfolio manager make a final determination to select the project for funding and, hence, for inclusion in the portfolio.
Prioritized. An aligned project is prioritized if it has been ranked along with other projects in its funding category. This is the final stage before the project is selected for the portfolio. If it is high enough in priority in its category, it will be funded and included in the portfolio.
Selected. A prioritized project has been selected if it is in the queue of other prioritized projects in its funding category and is awaiting funding authorization. This is a temporary stage, and funding is certain at this point.
Active. A selected project is active if it has received its funding authorization and is open for work. At this stage, the project manager is authorized to proceed with the recruiting and assignment of team members, scheduling of work, and other activities associated with launching the project.
Postponed. An active project is postponed if its funding authorization has been temporarily removed. Such projects must return to the pool of prioritized projects and be selected once again in order for its funding authorization to be restored. The resources allocated to a postponed project are returned to the funding category from where they originated. The resources may be reassigned to the postponed project at some later time or may be allocated to the next project in the queue of that funding category.
Cancelled. An active project is cancelled if it has failed to demonstrate regular progress toward its successful completion. Depending on the stage in which the project was cancelled, there may be unspent resources. If so, they are returned to the funding category from where they originated. Those funds then become available for the next project in the queue of that funding category.
Completed. A project is completed if it has met all of its objectives and delivered business value as proposed.
A project may find itself in any one of these eight stages as it proceeds through the five phases of the project portfolio management life cycle. In the next sections of this chapter, we deal with each one of the five phases in more detail.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.