There are two things that project portfolio management aims at: alignment and contribution. ‘Alignment’ refers to aligning strategic objectives to investments, to projects and ultimately to resources. ‘Contribution’ means ensuring the benefits of the project as outlined in the business case are realized.
Resource management, on the other hand, involves putting the right type and amount of resources where they need to be, for the right amount of time. It assumes that decisions around what projects to do, over what periods, have already been made.
There’s a big difference between the two management activities. The most striking of these is the scope.
Portfolio management involves linkages between business strategy and execution. This requires a very different skill set than what you’d expect from a resource manager. It also requires continuous monitoring of project performance and risk indicators in order that the investment is protected.
Resource management is limited to resources not business decisions and not project health reporting.
If business decisions have been made to proceed with several projects, and there are insufficient resources to execute these projects in the time frames expected, then there is disconnect between the strategy and execution arms of the business. Either the total budget is not sufficient to support the aggregate cost (in terms of resources) of the projects, or the business cases have understated the amount of resources required. This is a problem portfolio management can resolve because it ensures projects are selected and prioritized based on total budget and resources available. Resource management will tell you to hire more people.
Today many organizations are faced with having to achieve more with less. There is always a strain on the resource pool in getting all work done. Targeting the problem of resource management by broaching assignment and allocation with a defined process, a skills inventory and a focused mandate can increase the efficiency and effectiveness of the overall project portfolio. It may not solve the problem of pushing too much work into the pipeline, but it will highlight disconnects between a strategic decision to proceed with projects and the ability to execute on these decisions.
It’s a great first step to introducing or improving portfolio management.
Mike Lecky is a consultant at The Manta Group, a management consulting company specializing in IT governance, Project and Portfolio Management, Service Management, Risk and Compliance. Mike has degrees from the University of Waterloo (BScEng), The University of Western Ontario (MBA) and the University of Liverpool (MScIT). He worked for 12 years in aerospace electronics and as a Project Engineer managed several general aviation and US Military contracts. He teaches project management online with the School of Applied Technology at Humber College. Now, with over 25 years experience, he is a PMP and an information security professional (CISSP) and has a broad range of program and technology implementation experiences in the high tech and service sectors. Mike can be reached at email@example.com