Project portfolio management – not only for big players

In conferences and in publications, one can often get the impression that only large companies deal with the issue “project portfolio management”: The task is to select the important and proper projects and demands from a large number of planned and ongoing projects using a structured approach. Large companies don’t owe the issue, small and medium-sized companies could also benefit from the introduction of a project portfolio management!

What is portfolio management all about?

Sure, the multitude of project proposals, demands, and projects needs a selection of the right ones for the company. But what does that mean? First of all, this means establishing criteria for the quantitative and qualitative evaluatiion of the projects. These criteria should be able to transfer “gut feeling” into concrete values. Each sufficiently large demand then is evaluated according to these criteria. As a result, you get a prioritized list of demands. Do not forget to also include the ongoing projects. Sometimes the controlled termination of a project can be useful, e.g. if the strategic framework has changed.

The second step includes the rough scheduling of the selected demands and projects according to the given framework. What budget is available? Are there resource bottlenecks to be expected? How many projects can my organization handle at the same time?

Portfolio management must not be a mayfly. Depending on the typical duration of the project and the stability of the framework, a quarterly or semi-annual reevaluation of the project portfolios could be useful.

Why is project portfolio management reasonable?

“Why is this project started later? The project is very important!” Clear criteria help to justify decisions and create transparency. This transparency helps to understand decisions for or against demands or projects. This is both true for requests for approval for the management as well as for discussions of project managers and project teams.

The portfolio process encourages the critical discussion about content, costs, benefits and dependencies. The perhaps too quick gut instinct decision thus becomes an exception. The whole company benefits from this in several respects:

  • The benefit of the projects increases.
  • The project planning according to budget and resources is getting better, “bad surprises” become rarer.
  • The motivation improves, as all persons are involved and decisions are comprehensible.

Does portfolio management have to be complicated?

Project Portfolio Management is not an art and no complicated process with obscure algorithms. Project portfolio management is a comprehensible approach for the selection of demands and projects. The important thing is to retain reason when establishing the criteria and the procedure for the project evaluation. Which criteria make sense for the company? Who can and should be involved in the evaluation? It doesn’t help to fill pages with questions and generate numbers with unclear meaning and source. That would make the result worthless and frustrate the interviewed project staff.

A simple set of criteria is comprehensible for both the evaluator and the decision maker. And last but not least, you can only master the workflow then. An easy-to-use tool like KLUSA project portfolio management pays off. The possibility that several users work – according to their role – on the same data base is in the long run a better solution than number-crunching with large format Excel wallpapers.

What should be observed during the introduction?

The experiences in various medium-sized companies shows that few criteria are crucial for the successful introduction:

  • Simplicity: Better a few, but clear criteria for the evaluation. Critical questions are necessary. Only uncomfortable questions encourage thinking. Likewise, the possible answers must lead to a clear statement. The answers to the question of the economic benefits therefore should not be “small, medium, high”, but rather “benefit potential per year in euros?”.
  • Clarity: This starts by clearly communicating the targets regarding company objectives and strategy. This is a basic precondition for evaluating a demand or a project for its additional value concerning the achievement of company objectives.
  • Clear responsibilities: Who initiates and monitors the process? Who belongs to the group of evaluators? Who is the decision-making body? Who creates the request for approval? These responsibilities must be clear and transparent to the involved persons in order to ensure the procedure. Each member in this group must be aware of the given role and task, and the people must be prepared for their roles.


Project portfolio management takes place in companies where project decisions are made. Often, the decisions for a project are based on high pressure or experience. This does not have to be bad, but you can do better in many cases. Using simple rules and clear roles, you can generate a significant increase of the projects’ value for your company. It is important not to ask to much of the employees with complex processes and regulations. A simple, customized process helps more.

A software support is useful for the introduction and, above all, for the sustained yield of the project portfolio process. When selecting a software, it is crucial that: a) the employees are not overwhelmed by a complicated handling; and b) the software does not unintentionally impose a high degree of complexity on you, thus endangering the overall success.

A software like the KLUSA portfolio management adapts to your requirements and conditions. You an define the evaluation criteria, and a simple traffic light system is used for the evaluations. We are looking forward to show these and the other features of the KLUSA portfolio management software without obligation.

Share this entry on