The benefits of project portfolio management are clear...

Project portfolio management can significantly increase the value derived from projects. The quality of information for decision making is dramatically improved. Failing projects are identified more quickly. Low-value projects stop squeezing out high-value projects whose benefits are less tangible.

...but don't underestimate the difficulty.

Implementing a successful system for evaluating and prioritizing projects is a significant challenge. Executives need to understand and support the system. Project proponents need to see the tool is an aid, not a threat. Accurately quantifying the value of projects requires new capability. It's easy to get the math wrong.

The First Step — A Framing Workshop

The recommended first step for mastering project portfolio management is a framing workshop—a 3-4 day facilitated session that develops an analytic model ("framework") for assessing project value. Key components of the model include (1) a hierarchy of project benefits and (2) influence diagrams that identify the metrics and logic for quantifying each benefit type. The model is "validated" in a separate, 1-hour meeting with senior executives and a pilot application is conducted to verify that the model correctly evaluates project proposals.

A framing workshop:

Can be accomplished quickly and at low cost.
Builds organizational learning and understanding of best practices.
Develops the logic for valuing projects based on project consequences.
Creates a qualitative model that can be quantified and implemented as a software tool.
Generates essential understanding needed prior to developing or purchasing project portfolio management software.