Beware! — Project portfolio management will soon be regarded by many as another business idea that turned out NOT to work!

Why do I predict this?—For the same reason that most management fads fail. Most tools for project portfolio management are not based on sound theory. They are incapable of identifying value-maximizing project portfolios. They prioritize projects using metrics, assumptions, and algorithms that can be shown to be mathematically incorrect. Even if the techniques have helped in some applications, they cannot be counted on to work in other circumstances. Organizations are discarding these tools as it becomes apparent that they are not producing sound recommendations. This is a shame because methods and tools definitely DO exist that can enable organizations to derive significantly more value from their project portfolios.

What makes us different is that we provide portfolio management solutions based on sound theory.

Theory has an undeserved bad reputation among many managers. The word “theory” is associated with “theoretical,” which is often interpreted to mean “impractical.” But, a practical priority system can be produced using applicable, effective and sound theory. Priority systems based on sound theory offer two important advantages:

They produce accurate and reliable estimates of the value of proposed projects.
They provide a defensible justification for project funding choices.

Typical portfolio management software is not based on sound theory.

Take a close look at the portfolio management approaches that are currently being hyped. Nearly all are based on concepts such as “strategic alignment,” “balance,” or similar intuitive-sounding but indefensible prioritizing approach. To learn why these approaches do not constitute sound theories and why they will ultimately be recognized as failures, read Something You Should Know. For more detail, read the papers, especially the sections on evaluating tools, balanced scorecards, strategic alignment, and mathematical solutions.