Project portfolio management is an important process that helps organizations prioritize, select, and manage their portfolio of projects. It links business strategy with tactical decisions in determining which projects should be included in that portfolio. Effective PPM provides a structured approach for selecting an optimal portfolio of projects—one that maximizes the organization's goals (revenue, profits, strategic goals, or something else), while providing the capability to manage the project portfolio as part of an ongoing, iterative process that takes into account changes in resource availability as well as shifting business, technology, and market conditions.
While efficient project execution is an essential factor in a busi-ness's success, in today's competitive environment successful project execution by itself is not enough. Sustainable competitive advantage won't come only from working efficiently on projects; organizations must also work on the right projects. Project portfolio management provides a consistent way to select the right projects—those that together offer the greatest value and contribution to the strategic interests of the organization.
James S. Pennypacker is the director of PM Solutions' Center for Business Practices and coeditor of Project Portfolio Management (1999) and Managing Multiple Projects (2002).
Patrick Sepate is the director of customer solutions for PM Solutions and is responsible for its project portfolio management practice.
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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.