Companies need to work very hard to survive in the fierce business world. Every day, companies look at their competitors to understand the future trends and take action beforehand. They constantly try to innovate by taking into account their budgets and the risks of their actions. At the same time, market conditions change fast, so companies need to adapt accordingly to stay one step ahead of the competition. To reach their goals, organizations need to analyze the market, then they need to define effective strategies. To implement organizational strategies, companies can use Project Portfolio Management. In fact, Project Portfolio Management helps companies select the most valuable projects according to the strategic objectives that they have set. To be as effective as possible and reach their objectives, they need to connect organizational strategies to their projects and programs.
In order to understand corporate functions, it is important to understand the meaning of the term strategy. The word ‘strategy’ comes from the ancient Greek word ‘strategos,’ which means ‘the art of the general.’ The term “strategos” was used in the military field, and it was about defining a plan to win battles and defeat enemies.
Strategies in business are more about understanding the competition and preparing a plan to beat market rivals. In general, strategy can be seen as the direction of an organization over the long-term. In fact, the right strategies can help companies that operate in challenging environments achieve several advantages and, most importantly, fulfill the needs of the customers.
Organizational strategy is made of several decisions that make the goals and objectives of a company attainable. In addition, each strategy can include projects that are connected to one another. These related or unrelated projects can be used to create one or more project portfolios. To implement their strategies, companies need to select the most valuable projects and programs according to the strategic objectives that they have set. When companies select programs and projects, they should take into consideration all the risks from the organizational level to the project level.
Project Portfolio Management (PPM)
Initially, the concept of a portfolio was used by financial investors who intended to buy stocks. To create a portfolio of investments, investors must analyze all assets, investments, and debts. Afterward, they need to define their short-term and long-term financial goals. To create a risk-return profile, they have to decide the degree of risk and volatility they are willing to take and the type of returns they want to produce.
Francesco Pecoraro, PMP, PSM, PSPO, SSYB, SSGB, SSBB, CL, CC is the founder of francescopecoraro.com where he shares useful and practical information about project management, program management, project portfolio management, and agile methodology. Francesco has extensive experience as a project, program and portfolio manager, project management officer (PMO), digital transformation and strategic consultant. He is also considered a communication, public speaking, and leadership expert. Francesco writes about project methodologies, program, and portfolio management.