Project portfolio management: the MSP’s guide

Posted:

08/15/2023

| By:

Parker Trojanowski

A project portfolio is essential to manage and deliver your clients’ IT projects efficiently. MSPs oversee how an organization’s technology supports these projects—whether they have a clear beginning and an end or are an ongoing area of operation—as well as the process of integrating new technologies to help organizations be more efficient and stay competitive.

Project portfolio management (PPM) can serve as a valuable tool for decision-making, holding team members accountable for their work and providing visibility into progress (or the lack thereof). It is especially useful for quantifying the contributions, performance, and impact of IT projects, resources, and team members, providing proof of value to executives and stakeholders.

For MSPs, IT project portfolio management is an essential part of IT service management. It helps you integrate new tools and technologies and ensure that your clients’ platforms, applications, and other tools effectively support their business operations and goals in a way that optimizes performance and outcomes.

While portfolio management is used for projects across the spectrum of organizational functions and departments, there are specific considerations for its applications within the IT context. Understanding the value and function of PPM can help you make the most of it for your clients and your own business.

Understanding project portfolio management

You’re probably familiar with the concept of project management—frameworks and workflows that help organizations execute projects on time and within budget. Project portfolio management is similar but more expansive. Rather than a single project with a defined end and deliverable, it involves managing an entire project portfolio to ensure:

Projects are optimized to align with overall strategic goals and perform according to expected standards and with established budgets
Ongoing initiatives and tasks proceed efficiently
Projects are balanced according to risks, outcomes, schedules, etc.

In an IT project portfolio, you will specifically focus on factors and outcomes related to:

The costs and return on investment (ROI) on technology investments
Whether current tools are still appropriate or if they need to be upgraded, replaced, or retired
Identifying and mitigating gaps in technology infrastructure
The efficient allocation of IT resources—both technology infrastructure and team members

In other words, IT project and portfolio management focus on continuously optimizing technology-supported projects and departmental initiatives so that they work together to efficiently drive organizational performance and meet ongoing objectives. Think of it as an orchestra—the conductor chooses which works to perform, adjusts the tempo, and selects ensemble members, all with the goal of creating a smooth, harmonious performance.

As the “conductor” of your clients’ IT-related projects, you can make a big impact on their organizational development and growth. To help advance their initiatives and goals, you’ll need:

A strong understanding of your clients’ short- and long-term objectives and the technologies that can best advance them
The ability to clearly communicate IT project benefits, progress, and impact with executives and other project stakeholders
An understanding of the relationships between projects and how they may affect each other as well as organizational goals

Successful project portfolio management is a sign that an organization has a high operational maturity level (OML). But getting there can be challenging. Download our one-sheeter, Common Pitfalls for TSPs with Low Operational Maturity Levels, to learn about the potential missteps and tips for reaching a high operation maturity level. In addition, it’s important to think about ways to automate elements of management to make sure that scaling up your project portfolio management doesn’t create a bandwidth issue for your team.

Project portfolio management offers significant advantages, especially when balancing multiple projects and clients. In addition to benefits related to strategic alignment, resource allocation, and risk management, it provides:

Visibility and transparency. Project portfolio management gives you a centralized view of projects at every stage, helping you stay organized, identify potential adjustments, and effectively allocate resources.
Effective reporting capabilities. The ability to track and report on performance enables you to provide clients with details on project progress, offers insights into where problems need to be addressed or changes made, and identifies where decisions led to successful outcomes. For example, you may find that the cost of a new application is not resulting in adequate ROI, suggesting that the client should downgrade to a more basic version or switch to a less expensive option.
Agility. Tracking the overall progress of all IT projects across an organization enables you to adjust as necessary, helping your clients adapt to changing external or internal conditions. For example, an organization facing a barrage of cybersecurity threats may need to shift more IT resources to defend its infrastructure. With project portfolio management, you can figure out how changes will impact other projects so you can move those resources most efficiently.

The project portfolio management process

The framework of project portfolio management involves several steps. Remember that PPM is a cyclical and ongoing process, so these usually take place simultaneously.

Outline business objectives

At this stage, it should be made clear to all stakeholders what the overall goals of the organization are. This enables you to work together to create or adjust a mix of projects that will achieve those goals according to the desired metrics and timelines. This process typically involves working with executives responsible for the organization’s high-level strategies.

Choose and prioritize projects

Identify which projects, platforms, and technologies best support the goals for the portfolio. The team should evaluate them for the likelihood of success, timelines, potential risks and benefits, and required resources. You can then prioritize them based on which are most critical or urgent, as well as how they each contribute to the overall objectives.

For instance, an organization may need to adopt a new customer relationship management (CRM) platform to enhance sales processes and outcomes. You may work closely with client department heads and project managers to figure out available resources, realistic timelines, and other details.

Assign and allocate resources

Once you understand the requirements and scale of each project, you can identify:

Which team members have the appropriate IT expertise to work on them
What tools are required or how the infrastructure will be affected (for example, certain services or applications may need to be taken offline for a project involving maintenance or upgrading)
The budget
Other considerations

You must balance the resources for each project with the required resources across the entire portfolio, assigning them to support the most efficient use of funds, equipment, and people. Project managers can help you gather and analyze this information. External solutions can also help you build customizable plans and project templates that can fit your specific needs.

Monitor and manage

Overseeing project progress and any roadblocks is an essential part of PPM and portfolio management. Regular reviews and updates will help you assess performance and measure results. You should also step in to manage risks and any other factors that threaten projects’ planned trajectories or require a change in timeline, scope, or prioritization.

For example, it may turn out that a new technology initiative unexpectedly requires adding new servers or additional time to reconfigure existing devices, consequently stretching the budget or timeline. This will require you to work closely with project managers and talk to stakeholders to explain why changes are necessary and get their authorization.

Engage in proactive risk management

Even the best-planned projects face some level of risk. To mitigate them, your team should identify and evaluate potential uncertainties across the portfolio and figure out contingency plans and other risk management strategies ahead of time. This can help reduce any negative impact on timelines or budgets. It can be useful to speak with managers responsible for finances and department heads to get an accurate perspective on risks and how likely they are.

Adjust as necessary

You can’t foresee all risks. Factors such as unavoidable delays, changes in financial outlook, and new information can have an impact on the project portfolio and whether it is still driving organizational goals effectively. In such cases, you may need to reprioritize or cancel projects, reallocate resources, or start new projects. Since this may affect the ability of the organization to achieve its goals, you’ll work with executives to get their feedback and perspective.

Report on progress

Communicating the status of projects across the portfolio and whether they continue to achieve organizational objectives helps keep all stakeholders informed about overall progress. This supports greater transparency, provides clarity for decision-making, and cultivates collaboration. You may work with your clients’ communications team to make sure reports meet stakeholders’ preferences for information sharing and are presented to be easily comprehensible.

Review and apply insights

Examining successes and failures across the project portfolio helps you and your clients learn from mistakes. Use those findings to improve how you choose and prioritize IT projects in the future. Reviews can be helpful for your own insights moving forward, as well as for those of organizational executives and project managers who may have valuable ideas and feedback.

Project portfolio management tools

Business models, practices, and frameworks can help you manage project portfolios more efficiently and effectively. Which ones you should use depend on considerations like the nature of the industry, how many projects are in the portfolio, organizational preferences, and more.

PSA (professional service automation): PSA software provides a variety of different functions to support cross-departmental project collaboration management, including project templates, automated billing, and ticketing/dispatch.
SWOT (strengths, weaknesses, opportunities, and threats) analysis: This classic business framework provides a comprehensive view of the portfolio landscape and can also be used for individual projects.
Risk management framework: This tool can be helpful for a deeper dive into risks across the portfolio. It can help you plan for potential issues, identify resources and actions to mitigate risks, and integrate risks into project planning.
Documentation tools: Rather than relying on several legacy documentation platforms, IT documentation tools can bring these together in order to make it more efficient to centralize business intelligence and customer data.
Project prioritization matrix: A matrix is useful for defining the factors that will impact where projects fall in the order of priority. These can include potential revenues, the IT and technology resources required, and how well the project aligns with strategic objectives. You and your clients can use this tool to evaluate all projects in the portfolio and prioritize them accordingly.
Balanced scorecard: This tool helps you define key performance indicators (KPIs) from four different perspectives: financial, customer/stakeholder, internal processes, and learning and growth. It can help you and your clients organize a project portfolio holistically across the organization. This can be combined with IT reporting tools to have an up-to-date resource internal and client teams can access for well-organized data.
Resource capacity planning: Evaluating the availability of resources helps you balance them across the project portfolio and informs decisions about allocation, timelines, and more.
Governance and decision-making processes: It’s critical to establish roles and responsibilities across the project portfolio, including defining decision-making authority in different areas. Doing so supports communication, collaboration, and efficiency, and ensures that decisions are based on accurate and objective information.

Solution support for project portfolio management

Software platforms can centralize, streamline, and simplify tasks related to project portfolio management. Some features that provide critical support include:

Task tracking. Many solutions support accountability and transparency with the ability to assign IT tasks to your team and generate alerts when they are completed or delayed.
Performance tracking and reporting. This feature enables solutions to pull data and metrics from different projects and platforms so you can quickly visualize progress across the portfolio. It can help you identify potential delays and bottlenecks so you can adjust priorities or resources to keep them on track. This feature is especially helpful for insights into how IT performance impacts budgets and revenues, an area that historically has lacked sufficient granularity to evaluate effectively.
Communication and collaboration. In-app tools support seamless and convenient communication with the ability to tag messages and notifications to specific tasks or issues. They can also include features like messaging and document sharing. This is especially helpful for clarity with project team members who may not have the technical knowledge, background, or vocabulary to quickly understand communications or guidance without more context.
Resource management. Time-tracking and scheduling tools can help you allocate resources across the portfolio (such as individuals with a particular set of technology skills or specific expertise, or tools with a limited capacity for use) as the demands of different projects or priorities shift.
Automated notifications. Platforms can provide reminders of upcoming deadlines and send regular progress updates, eliminating the need for you to handle these routine tasks.

In an increasingly complex business and IT environment, efficiently managing your project portfolio is essential. Greater visibility into problems and progress, the capacity to manage resources, and the ability to reshuffle priorities quickly can help your clients be more agile and respond quickly to changing conditions and requirements.

ConnectWise PSA's project management features are designed to help your team stay on task, on time, and on budget. From goal management to enhanced reporting, upleveling your project portfolio management strategy is the key to delivering next-level customer satisfaction. Start your free demo today to see first-hand how PSA software can boost your MSP’s productivity.