Managing the Project Portfolio

Visibility and ready access to information regarding projects in progress are two important aspects of managing the portfolio. A

Table 3-1. Process Step Description: Strategic Forecast Plan


Step Definition


Activity Definition


Identify Business Unit Goals and


The management team identifies and documents the business unit's annual



goals and objectives.


Complete Project Profiles


Managers identify projects required to satisfy the business unit goals and objectives. A project profile form is completed for each proposed project and filed with the PMCoE for future reference.


Prioritize Projects

Management Team

The management team determines the prioritization of the proposed projects for the plan year, thereby creating the input for the project portfolio management report.


Create Project Portfolio Management Report


The PMCoE compiles a list of proposed projects and produces a forecasted project portfolio management report for the plan year.


Complete Preliminary Project Budget


Managers complete preliminary budgets for each proposed project. A template is used to develop this preliminary budget and a copy is filed with the PMCoE for future reference.


Create Project Capital Budget


The proposed project estimated budgets are summarized to create a project



capital budget plan for the plan year.


Submit to CMT for Approval


The proposed master project capital budget plan and project portfolio management report are submitted to the corporate management team (CMT) for review and approval.


CMT Review/Approval


The CMT reviews the proposed project capital budget plan and approves it or requests revisions.




If required, the revised report is resubmitted until it obtains final approval.


See Project Initiation


Once approved, the project proceeds with the project initiation process.

Table 3-2. RRAA Matrix: Strategie Forecast Plan





Organization's Senior Executive

Functional Department Managers


Corporate Management Team (CMT)

Provides leadership direction and supports the management team in annual implementation of the strategic forecast planning and capital budget development process Participate in the annual strategic forecast planning process, identify projects to satisfy goals and objectives, prepare preliminary budget for all proposed projects Assigns a classification level to each proposed project and prepares the project portfolio list using the prioritized list developed by the management team

Provides leadership to the organization by establishing clear vision, mission, objectives, and goals through the strategic planning process

Facilitates the process that prioritizes projects and develops the project capital budget plan

Review, commit to, and support the project portfolio list and the master project capital budget plan prior to CMT review and approval

Assists the functional managers in developing their individual proposed project plans

Reviews and approves the organization's strategic planning process plan and FY project capital budget plan for the coming year in a timely manner

Requires adjustments to the approved project prioritization as circumstances dictate and provides final approval for all organization projects

Request revisions to the project portfolio list and the project capital budget plan prior to its being submitted to the CMT for approval

Develops, maintains, distributes, and helps implement the project portfolio development process and facilitates the annual implementation in a timely manner

Accepts, requests revisions, or specifies exceptions prior to approving the plan

Figure 3-4. Project Request/Authorization Process

Figure 3-4. Project Request/Authorization Process

master project list in a table format that contains the following information is an easy but effective system to create and maintain.

• ID#—Identification number assigned to each approved project

• Name—Short name by which the project will be known

• DEPT—Department manager who owns the project

• PM—Project manager or team leader assigned to the project

• SD—Start date (P-dd/mm = planned, A-dd/mm = actual)

• ED—End date (P-dd/mm = planned, A-dd/mm = actual)

• SIZ—Estimated duration of the project in months

• PHZ—Current phase the project is in (INT = initiation, PLN = planning, EXC = execution, CLS = closing)

• STAT—Current status of the project (color coded: green = on schedule, yellow = potential for variance, red = overdue)

• CAL—12 monthly columns with plan colored light blue and progress colored black)

See the template PMMG 1.11 in Appendix B for an example.

Table 3-3. Process Step Description: Project Request/Authorization Process


Step Definition


Activity Definition


Complete Project Profile

Functional Manager

After determining that a business opportunity requires a project to fulfill a business need, the manager completes these documents and submits them to the PMCoE.


Classify Project


The PMCoE assigns a classification level to the project.


Authorization Team (PAT)

The PAT reviews, approves or requests additional information, or rejects the project. If the project is rejected, the PAT provides the manager with justification for this business decision.



Functional Manager

The manager provides additional information and revises the project summary and/or project milestone plan as required. If the PAT rejects the project, the manager communicates this to the intended project sponsor and customer.


Authorization Team

If the project is approved, the team establishes a priority for the project and determines how the master project portfolio list will be adjusted to accommodate this new project.


Update Master Project List


The PMCoE updates the master project portfolio list to include the new project and makes other adjustments as directed by the PAT.


Proceed to Project Initiation

Functional Manager

The manager follows the Project Initiation Process when the time arrives to start the initiation phase of the project.

There are many ways to provide access to this kind of information:

• Maintain the table in an electronic file on the LAN/WAN system with access determined by the system administrator.

• Post the information on an Internet Web site created and maintained by the PMCoE.

• Provide the information through a "dashboard" feature available from several software vendors.

A monthly management review of projects is another important method of providing visibility. It also facilitates the update of the master project list. Monthly reviews with the managers of the business units facilitate communications among managers concerning project status and create a heightened awareness of critical issues. The fundamental requirements for successful monthly project reviews include the following rules.

• Manager attendance is mandatory. If a schedule conflict occurs, a delegate represents the department.

• Project managers present the project status, if possible. If not, a team delegate represents the project manager.

• Project status is based on the progress since the previous report.

• Projects are reviewed in four categories: (1) new projects, (2) projects in-progress, (3) completed projects, and

(4) future projects. The following details should be reported:

1. New projects (those that have started since the previous report)

✓ Scope of work is reviewed

✓ Overview of project schedule

✓ Major project risks

✓ Anticipated benefits

2. Projects in-progress

✓ Current status (green = on time, yellow = running late, red = overdue)

Table 3-4. RRAA Matrix: Project Request/Authorization Process





Functional Department Manager


Project Authorization Team

Identifies business opportunities that require new projects, gathers requirements. Prepares a project profile and submits it to the Authorization Team for review and approval. Informs the project customer and sponsor of project approval or provides the PAT justification if it is rejected

Serves on the PAT and updates the master project portfolio list with new approved projects Assigns a classification level to new projects Reviews and approves proposed projects to be added to the project portfolio list

Completes the proposed project profile document with sufficient detail to allow proper classification and review by the PAT

Provides reasoning to support project classification if requested Establishes and maintains master project portfolio list files

Requests requirements from proposed project customers and sponsors to establish compelling justification for the project

Establishes and refines project classification level criteria as experience is gained over time

Establishes project priorities and Requests additional information determines adjustments required to incorporate new projects onto the project portfolio list during the review process Rejects proposed projects that are not aligned with strategic goals and objectives Provides business justification for projects rejected because of other

✓ Project performance Index (monthly and cumulative)

✓ Critical issues needing resolution

3. Completed projects

✓ Cumulative performance index

✓ Benefits achieved and lessons learned

4. Future projects: anticipated to start in the next two months with mangers providing an overview of the project

✓ Project purpose, description, other departments being affected

✓ Preliminary milestone plan

The project portfolio management List is updated and minutes are published and distributed electronically within two days following the meeting.

PMCoE Logo

This chapter began with a reference to taking a journey and the importance of knowing the destination before beginning the trip. The concept of establishing formalized processes that help organize, plan, manage, and control the use of limited resources is critical to continued growth and in some cases the very survival of a company. Authorization is a foundation-building element that ensures alignment of projects with strategic goals and objectives. The institutionalization of project management occurs when the environment enables all of its employees to embrace its best practices as the normal way to do the work they do on a daily basis.

The integrity and stability of a four-legged stool depends on the strength of each leg as well as the connections (cross braces) between the legs. If one or more of the legs are weaker or shorter than the others, the integrity and stability of the stool is compromised and at risk of failure. The formation of a project management center of excellence is very similar to a four-legged stool with similar characteristics, each having four supporting elements (legs).

Enterprise-wide Project Management

The integrity and stability of the PMCoE, like the stool, also requires equally strong and integrated supporting elements that are needed to facilitate the distribution of project management best practices enterprise-wide, as illustrated in Figure 3-5, the PMCoE logo, which is a stylized four-legged stool.

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