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3 Steps to Effective Project Portfolio Management Process

Project Portfolio ManagementResource PlanningTask Scheduling

I have a morning routine. I wake up. I go to the bathroom. I wash my hands. I brush my teeth. I drink a glass of water. I wash my face. I dry my face. I go back to my bedroom. I take vitamin D. I go to the kitchen. I put the kettle on to make tea. I put the tea bag into a cup. I cook myself breakfast (meaning I pour cereal to a bowl). I pour the hot water into the cup. I take the cup and the breakfast I cooked (the bowl of cereal) and place them on the kitchen table. I eat my breakfast.

It’s trivial but whenever I can’t do my thing in that order, I’ll have a feeling like something is wrong. I don’t have any reasons to say it’s the “right order” of doing things (I actually do but since I want to seem like a sane person I won’t disclose it). But if I don’t do it that way, it feels wrong. It’s my little ritual. I’m used to it. I don’t have to put any thought into it. I have it figured out.  And I’m not the only one with those routines.

Creatures of habit

It’s simple things like how your phone can suggest maps destinations. It can guess you’ll go home after work. I can guess the day you’ll go to the gym. And more complex rituals that make up the reasons why it’s so difficult to push people to make a change in their everyday life for more sustainable consumption. We are guided by dispositions, procedures, and sequences on every step we take. First are formed by culturally derived orientations, second by tactic knowledge and embodied skills, and the latter through the material, infrastructural, and institutional forms.

We aren’t free from those dispositions, procedures, and sequences while we are at work. We’d like to think we are rational human beings that make rational decisions. From choosing our career paths to choosing toilet paper at the supermarket, we have it figured out. We know why we like something. We know why something is better than all those other options. We also have our little rituals at work. Both, the order of the things we do and the way we do things.

If we didn’t we’d resemble more the guy from Primitive Technologies that is trying to mimic how we got to the technologies we are using today than a project manager trying to make sure all the projects have enough resources and that the resources would be optimally utilized. We’d have to figure out electricity each morning instead of signing into the resource planning software.

Unfortunately, the dispositions, procedures, and sequences we have might be neither the best or the most effective to get the job done. But like my morning ritual, even if we know that, it still seems wrong to do it any other way. And so we do it the way we are used to doing it.

Good work habits

According to a survey, only 33% of project portfolio managers would categorize the project portfolio management (PPM) practices at their organization highly effective. 62% of managers estimated the practices to be mediocre, and 5% nonexistent.

What’s even scarier, the ones that perceived their project portfolio management process to be highly effective, stated they experience significant delays at the project level.

It might be because there often aren’t sufficient resource planning metrics to measure the efficiency of PPM or it might be because being behind on schedule is rather a fact of life than an alarm bell. And it might be since the project portfolio practices set have become a routine. Something we have to the way we do it since otherwise it would be wrong. Or would it?

I’d say there’s always room for improvement. Maybe even with my morning routine. Otherwise, we’d just stay in one place.

Current Project Portfolio Management


Before we get to suggesting improvements, let’s take a look at current project portfolio management practices. From selecting the projects to allocating resources. Namely, a scholar from MIT made it their mission to understand the current portfolio management practices.

The results of the survey are the following:

  • High uncertainty:
    The majority of projects are executed in a multi-project environment where uncertainty is considered the normal state. There isn’t a plan B. And there isn’t a need for a plan B since more often than not, resource schedules stay unchanged after they are first set. And it should be alarming since portfolio rebalancing is one of PPM’s foundational tasks.
  • Homogenous portfolios:
    Most organizations report combining new development and sustaining projects in the same portfolio but tend not to mix internal and external projects. While the first can be categorized as a good practice since it’s positively correlated with the perceived proficiency of the project portfolio management. There’s a clear decrease in perceived proficiency when internal and external projects get mixed up in the same portfolio.
  • Small project portfolios:
    Another thing that seems to be popular is how many projects make up a portfolio. According to the survey, most participants said to have at least five projects in a portfolio and over 50% of them said to maintain at least ten concurrent portfolios. The relationship between the ration of projects-to-portfolio and proficiency indicates there’s a strong reason to minimize the number of project in a portfolio and maximize the number of portfolios.
  • Reactive resource planning:
    If we get to allocating resources, we see that it’s still something that is done rather erratically and reactively than systematically. The typical resource management process seems to be following: as the effort needed increases, management can either increase the work intensity, encourage employees to work overtime or add more resources through hiring.
  • Burning up productivity:
    Working faster or more efficiently and overtime tires the resources and reduces productivity in the long run. When more resources are hired, the company’s experience diminishes through the time needed for onboarding and ramp-up which also lowers the productivity. It seems that any option to decrease the workload will convert into the company losing money and paying employees who aren’t productive.
  • Perceived efficiency:
    Those that involve employees in the resource planning process seem to perceive their PPM process to be more effective than others. The most interesting part of it is that there wasn’t a correlation between the size of the organization and the perceived efficiency of the portfolio. So while it might seem obvious that it’s easier to involve employees in the resource planning process in a startup than a large enterprise, there seems to be a way for both to do it.

What Makes a Bad Practice

When talking about practices that don’t work, we should cover the different expectations to project portfolio management.

project portfolio management process and expectations

While for managers and employees simplicity seems to be the key, organization opt for the low cost. Employees want management practices to bring them interesting tasks, and managers want the process to be helpful while planning, the organization’s aim is to increase productivity. While managers don’t want to compete for resources, the employees don’t want to compete to keep their jobs. And the organizations just aim to reduce project delays.

For example, imagine a situation where each manager is trying to get the best resources for their projects which can cause overutilization of certain resources and leave other dormant. If one manager has a control over too many portfolios, their preferred resource management practices have a toll on the resources. There’s both less competition for them and an access to top talent.

Luckily, these value-action conflicts can be reduced by aligning the expectations using resource management, so the actions made would serve the same goals. The goals of the organization.

Steps to Take

In project-based organizations, the resources are what offer the competitive and financial edge. Effective resource management should be viewed as a way to take care of those resources. And managers should be the carriers of these practices rather than someone out for their own interests.

1. Make the PPM Process Continuous

Neither project portfolio management nor resource management can be ‘do it once and it’s done’ kind of a job. There has to be balancing, there has to be reallocating. It can’t be always post hoc, it should be planned and executed. After the initial scheduling, the tasks planned should be revisited. When a new project is added to the portfolio or when a whole new portfolio is added. Or even when nothing new happens, and the project is just approaching.

When PPM is rather idle than circular, managers reproduce a situation where resources are booked just in case or to their best knowledge. Task duration is estimated using its complexity, risk, and historical performance. However, when the resource is either more or less proficient, the task is completed either with less or more time. When that happens, dependent projects and tasks should be moved. If they aren’t, there will be an unnecessary delay that could be avoided more efficient resource management.

While the impact of this problem can be reduced with mapping out the skills of resources using custom data in a resource management software, real life is still more complicated than any data field could be.

2. Build a Cancellation System

If there are no cancellation policies when scheduling resources, managers tend to become excessively risk-averse and will not make decisions until the uncertainty is low enough. Which might even sound like a good thing.

In reality, it’s nothing other than holding in information that could help other managers during planning. If there were cancellation policies in place, managers could take calculated risks and plan in advance considering the available information. Again, if the schedules made on certain uncertainty are revisited, and resource are reallocated after new information surfaces, it won’t harm the portfolio.

Another way to tackle holding in information is encouraging creating backup plans. Planning using different what-if scenarios, and making sure other managers know what the scenarios are, so they could create their own interdependent backup plans.

3. Involve the Employees

Perhaps the most important part of it all is making sure every stakeholder would have an access to the same information. Meaning every manager should be able to access and update the same set of Gantt charts. When talking about continuous resource management cycle, it can’t work if every manager is still working on their own resource planning spreadsheets. It has to be a collaborative system.

Moreover, it’s not only the managers that should be able to access the schedule. If you want your employees to be more engaged and productive, they should be involved in the resource planning process. Consider resource management tools that don’t charge per user, if inviting all the employees wouldn’t be cost efficient with your current software. If confidentiality is an issue, use different user rights and create different sets of access.

If the access is granted, take a step further and give the resources an actual say on the planned task duration, and maybe even the task planned for them. In addition to or instead of giving out monetary rewards, build a system where a top performing employee can choose the tasks they want to complete.

After all, including employees in the resource management process seems to be what makes PPM practices more efficient.

The article and the illustrative material is based on Mina Botros Masters thesis on human resource management in project portfolios
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