Introduction to Enterprise Project Portfolio Management
Enterprise project portfolio management, or EPPM, is a way to align all projects and portfolios with strategic objectives. It’s a centralized system that can see what everyone is working on. In short, when everyone is on the same page, projects are more successful. In this article, we’ll explain the process of EPPM, some challenges and benefits, and why you need a centralized office to oversee all projects.
On this page:
- What is Enterprise Project Portfolio Management (EPPM)?
- The EPPM Process
- The Benefits of EPMM
- The Main Challenges of EPMM
- Why an EPPM Office is Important for Organizations
What is Enterprise Project Portfolio Management (EPPM)?
Every company is made of various departments. If one department initiates a project, how do they know if it aligns with another department’s project? How do executives know if these projects align with company objectives? EPPM gives visibility to the entire enterprise. It can also predict project results and maximize the value of each department.
Having an EPPM system means increased efficiency. Who doesn’t want more to be more efficient? Project management teams can more effectively utilize resources, and costs are optimized. Departments can see how their projects complement each other. All employees have a better understanding of why they are doing their jobs, and finally, executives know projects fit with long-term company goals.
The EPPM Process
To set up an EPPM system, you will need a process that manages all enterprise-wide projects, portfolios, and programs from beginning to end. For every business decision you make, there should be:
This system creates a complete picture of the connection between all projects. Let’s look at the process and steps involved in establishing EPPM.
Create a Project Inventory
Creating a project inventory means coming up with a list of all the active projects in a company. You’ll want to collect details and key points about each project. Then, you can see which projects align with company objectives. From here, it’s easy to prioritize certain projects.
After doing a project inventory, you may discover inefficiencies. For example, a project may contribute nothing towards enterprise-wide goals. An EPPM system lets you easily drop it so you can focus on more productive ones.
Discuss Critical Questions
When you’re evaluating projects, you’ll want to ask critical questions such as:
- What are the most important projects?
- Which ones are high-risk?
- How can we mitigate these risks?
- What’s the best way to manage a project?
- How do I best allocate money or resources?
- Are people’s skills matched with the project? If not, how can we fix it?
- Do we need to hire someone to fill in the gaps?
- How can we keep morale up and motivate employees?
Develop Your EPMO
To align all projects, programs, and portfolios to company objectives, you’ll need a group that can see enterprise-wide activities. An enterprise portfolio management office or EPMO does just that. This group helps ensure every project aligns with the big picture. Also, having a group who has visibility into the overall organizational strategy lets the EPMO budget and use resources more efficiently. We’ll discuss this group in more detail later in this article.
Align Your Projects
After you give specific projects the green light; now, it’s time to align them with the enterprise’s overall strategy and objectives. You may have to tweak or change specific projects or bring in new people. But this type of alignment means all enterprise projects are cruising towards the same goals.
Appoint Your Projects
A project manager (PM) or department must take responsibility for a project. Therefore, appointing your projects to the appropriate PM or department means you’ll know whom to go to for updates and progress reports.
Appoint an Implementation Team
An EPPM system needs a team to run it. This team should include:
- Portfolio managers
- Program managers
- Project managers
- EPPM team members
This group will keep track of all enterprise projects and portfolios. They’ll also communicate with and update leadership and provide transparency and visibility across departments.
Launch Your EPPM
There are lots of software programs that can help you run a successful portfolio. And while each enterprise may have different needs, all programs should have the following features:
- Metrics that measure project success
- Internal project resources
- External project resources
- Strategic objectives
- Project progress
Monitor Execution and Compliance
Monitoring projects means knowing what is happening and reporting back to stakeholders. You can look at workflows or meet with the EPPM team. Your job is to ensure all the projects stay aligned with company objectives as they progress.
Garner Actionable Business Insights
Who is doing what in a project? Your EPPM system will track who is responsible for what parts of the project. It will also show you the project progress or challenges a department is facing. Now, if you need to hire someone new or get help, you’ll know exactly what to look for.
Set Up Patterns of Traceability
Have you ever worked on a project and realized time and resources were wasted? Maybe the team spends more time searching for information than they do working. Or perhaps no one communicates with each other. The leaders don’t fully know what’s happening, and the team members work in a silo. With an EPPM system, you can track the who, what, and when of all projects.
Create a Document for Lessons Learned
After a project is over, it’s time to reflect. You should document lessons learned by evaluating your project and determining what you did well and what you could improve next time. Write these reflections down. For example, maybe you need to monitor project progress more often, or perhaps you saw the engineering department is missing a backend developer specializing in Python. In the future, you know to check in more often and speak to team leaders about filling talent gaps. These lessons learned should be stored centrally so others in the organization can benefit from them in the future.
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The Benefits of Enterprise Project Portfolio Management
The benefits of having an EPPM system start with alignment, but with that comes other advantages too.
- Alignment – When departments are aligned, projects are more successful. The budget aligns with resources, skill sets, and the schedule. As a result, employees can do their job efficiently, and there is transparency throughout the project.
- Predictability – Project success is much easier to predict when project management teams can see what everyone else is doing. Additionally, risks are easier to predict and prepare for. For example, if the human resources department can’t see that a project is short-staffed, the project team is already at a disadvantage.
- Planning, not reacting – When the risks associated with a project are predictable, you can better plan for them. Reacting means making quick decisions in the moment. This can lead to miscommunications or secondary risks. A sound project portfolio management system lets you plan for risks instead of reacting to them.
- Better visibility and control – There are specific approval processes when you have a project portfolio management system. Everyone within an enterprise must follow this set process. Yes, this means more paperwork. However, these standardized processes ensure the project stays aligned with the company’s objectives. People can’t just pop their heads into an office to ask for something. A set process means leadership and management have visibility as people submit their change requests.
The Main Challenges of Enterprise Project Portfolio Management
An EPPM system is complex. And ensuring it is strategic, well-thought-out, and well-documented is not the easiest thing to do. Below are some of the challenges of implementing an EPPM system.
- Stringent Financial Management – Projects, programs, and portfolios need funding, and someone needs to manage those budgets. After all, the point of the project is to create value for the organization. An EPPM system makes sure budgets are authorized, recorded, and reported as error-free as possible. This could mean having several layers of review. You could also have a third party recheck or monitor the transactions.
- Lack of Specific Management Skills – We’ve all worked with a manager who did not have the skills to run a team. This person might be a terrible communicator, or perhaps they don’t have the necessary education or experience. An efficient EPPM puts the right people in the correct positions. If a project team is missing a particular skill set, a sound EPPM system will hire or train someone to fill that need.
- Choice of EPPM Tools – Whatever project management tools you choose, take the time to evaluate them. Ask yourself if this tool fits the enterprise’s needs. For example, if you’re a small business, using Oracle Project Management might be too expensive and bulky. On the other hand, tools such as Jira are more straightforward and may better fit your organization’s needs.
- KPI Overload – KPI stands for Key Performance Indicator. As the name suggests, these are ways to track and measure project success. Usually, a KPI will include something quantifiable. For example, Project X will complete 3 of 12 deliverables this quarter. Don’t overload your team with more than four to six KPIs.
Why an Enterprise Portfolio Management Office is Important for Organizations
The enterprise portfolio management office or EPMO manages the EPPM system. This group follows and executes EPPM processes that have already been set up. One example of something this office does is budgeting. It sets aside funds based on strategic objectives, meaning there’s no need to discuss each request as they come in.
What is an EPMO?
An EPMO evaluates an enterprise’s priorities and distributes resources based on them. The goal is to get teams to meet both smaller and larger goals. In addition, an EPMO can help reduce the number of duplicate resources used throughout the organization. They also evaluate performance and make improvements where needed.
What is the role of an EPMO?
The EPMO has a bird’s eye view of all enterprise portfolios. They can see everything that is happening in all departments. They also communicate with company executives. You can think of an EPMO as the group that connects enterprise vision with the frontline doers.
Why are EPMOs needed?
Even if you have an excellent EPPM system, you need enterprise-wide buy-in to make them successful. This is the only way departments and project teams follow the implemented processes. An EPMO is a centralized group with both visibility and support from executives. Some reasons to have this office include:
- Having a group that understands and determines priority projects
- Letting executives know the value of a project
- Having a group that sees the big picture
- Having a centralized group of governance
- Having visibility across departments
- Consolidating and simplifying project management methodologies
- Getting executive support
Managing all the projects, portfolios, and programs in a company is a huge undertaking. An EPPM system organizes and points all the projects towards strategic objectives. To get everyone on the same page, an enterprise portfolio management office directs all the activities. This centralized group has support from above and can see all the projects in the organization. At the end of the day, enterprises want to know their projects are meeting company goals. A good EPPM system can do just that.
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