Project Portfolio Management vs Project Management. What does your organization need?
A company's reputation is crucial if they want to maintain long-lasting relationships with its clients. Smooth operations, easily accessible goods and services, and a polished appearance convey that you are an expert in your field. Your company may appear flawless from the outside, but things may be a little trickier on the inside. You need effective internal processes if you want to maintain your business working at its peak levels. This includes managers and staff at all levels acquiring new projects and assisting the company's continuous growth.

Enterprises today are particularly interested in putting into practice certain techniques that will enable them to streamline operations and land mission-critical projects. The accomplishment of projects and programs is essential for organizational success in a service-based environment. This is where the debate between Portfolio Management and Project Management arises. Despite having similar sounds, they have diverse functions in terms of achieving business objectives. Setting both long-term and short-term goals is essential for the success of your company, so having plans in place to reach them and team members who are motivated to do so can be advantageous.

If we look more closely at successful businesses and how they function, it becomes obvious that their development and presence in the market are never the end consequence of random chance but are instead the result of many forces successfully interacting. Project managers and portfolio managers, together with all employees and other stakeholders, are these unnoticed forces at work in the background of every business. Making businesses truly customer, value, and benefit-centered, as opposed to merely cost-driven, requires understanding how Portfolio Management, maturity, and matrix management combine to produce business success. According to Bob Buttrick, while Project Management is about executing projects right, Portfolio Management is about executing the right projects. Let’s look at these two terms and understand their functions in detail.

Project Management

Within a company, transitory assignments with start and end dates are sometimes referred to as projects. They frequently concentrate on specific, short-term objectives like developing a new product, marketing plan, or service. To reach the intended result, Project Management relies on good visualization and problem-solving skills. To save time and increase the quality of a strategy, a quick decision is frequently taken. A project can be completed successfully with a competent team, but any inefficiency could be detrimental. In short, a project is a single endeavor i.e. a set of tasks intended to create a certain good or service within a predetermined time frame and budget. With effective Project Management, teams and team members continuously grow and advance, offering the company a competitive edge.

Project Manager

Project managers supervise specific projects, manage teams, and ensure that projects are finished on schedule, on budget, and in compliance with defined standards. Among other duties, they choose best practices, assess procedures to increase efficiency, and collaborate with stakeholders to ensure that anticipated benefits are attained. The project manager's responsibility is to complete all tasks within the designated spending limit and time frame, sometimes with little to no resource support. They need to achieve goals while balancing the work's scope. They must also work within the constraints of the given funds and time. The rules for a project are often set by the client or top management, and requests are frequently difficult to include. To achieve goals and deliver more dependable results, project managers use a variety of tools, strategies, and processes.

Portfolio management

In any given year, many businesses manage several projects, thus they require a method of organization. The process of choosing and overseeing an organization's projects and programs to support business growth is known as Portfolio Management. It all comes down to having a broad perspective and pursuing long-term objectives. Portfolio management is establishing priorities based on the shared goals of the business leadership. The programs and projects to be undertaken are selected based on what will yield the greatest business value, the level of risk involved, and the available resources. A portfolio is a broad overview of all the initiatives that a company is pursuing to achieve its primary strategic goals. Any project in the entire business, a division, or a department could be included.

Portfolio Managers

Portfolio managers put a lot of effort into sorting through projects to identify the good from the bad. Decide which objectives should be given top priority, then pick initiatives that fit those objectives. Finding patterns and connections between projects and then stitching them together is one tactic. This can result in building a bigger portfolio. They examine a company's projects to assess their quality of execution, areas for improvement, and if the organization is reaping the anticipated advantages. Their responsibility is to make sure the appropriate projects are chosen. Each year, many companies only take on a small number of projects. Once accepted, every activity must guarantee a strategic payoff. A portfolio manager must consider every project separately. Do resources get used effectively? Are tasks finished on time? They should also take the company's overarching objectives into account while considering a holistic strategy.

So What does your organization need?

Now you know what Project Management and Portfolio Management are and what project managers and portfolio managers do. You must be wondering what should you focus on for your organization. What does your organization need? Project management is required for the successful completion of any project. Therefore, if your organization is working on a project, you need to put together a team for Project Management. On the other hand, not every business will profit from putting in place a project Portfolio Management system since they won't need one. Large businesses that constantly have numerous hats spinning will profit the most. A Portfolio Management plan and manager will probably be helpful for smaller enterprises that are in the growing phase. However, building up a whole portfolio team if you are only managing one project would be excessive. Even if you are managing two projects at once, the increased oversight may not always be advantageous.

Conclusion: Small companies handling one or two projects at maximum should focus more on Project Management before stepping into Portfolio Management. If you are in a growth phase and multiple projects are coming at once, then you should start setting up your portfolio management team. Large enterprises need to focus on both. They need Project Management for the success of projects, and short-term goals, and Portfolio Management for long-term goals and focusing on the bigger picture in accordance with business objectives.