Project Portfolio Management and the Business Case
Increasing numbers of enterprises, whether commercial, non-profit, or from the public sector, are incorporating project portfolio management in their strategic and tactical planning. Although the presence of the word “project” implies this is a project management topic, the portfolio is really about business decisions to meet business needs. Enterprises use an analysis called the “Business Case” to evaluate various project proposals for inclusion in the project portfolio. Here we will discuss the typical contents of a business case and how that information is used by the portfolio decision makers.
Project Portfolio Management
A project portfolio is a collection of projects or programs that an enterprise has selected to meet their business needs. An individual project creates a change in the environment (the project product) within a defined time period. The project manager manages that endeavor so that the major constraints of costs, time, and scope stay within planned boundaries (project life cycle). Portfolio management includes the larger picture: the product life cycle.
The project life cycle is typically managed through a Project Management Office (PMO). Enterprises that have implemented portfolio management will often create an organization somewhere between the PMO and the executive level. This group may be called a steering committee, portfolio governance, or a Project Portfolio Management Organization (PPMO). This group is a cross-functional, “roll-up-your-sleeves” group that must select and prioritize projects for the portfolio and manage the integrated portfolio for changes.
The Business Case
Each potential investment in a portfolio must be evaluated for meeting the criteria important to the individual or enterprise. For project portfolio management we use the Business Case. The business case is an analysis of a proposal for inclusion in the portfolio. Business cases come in the form of written reports and are often summarized in a presentation to the PPMO. The business case should contain the information the decision makers will use to compare proposals and evaluate them for inclusion in the portfolio.
The author of the business case is the Business Analyst (BA) or someone wearing the hat of a BA. The project manager will get involved once the project is selected.
Presenting the Business Case Series