Project Portfolio Management Defined
How PPM Fits Your Enterprise

Posted on 1/10/2007 (originally published in print on 11/1/2004)

Those who work, live and breathe in the gray area between Finance and IT are constantly bombarded with new buzz-words and nomenclature representing applications, technologies and business processes promoting more efficient ways to measure the value IT brings to the enterprise.

Also known as Technology Chain Automation, Project Portfolio Management (PPM) as a concept isn't new. IT executives are frequently under a microscope proving their departments value to the business. Investments made in other departments such as Sales, Marketing, Manufacturing or Distribution often lead to immediate and measurable results. However, when the same investment dollars are channeled toward IT or tech-related projects the results are long-term in nature and usually harder to quantify. The challenges posed trying to measure functional by-products such as increased efficiency, streamlined operations, tightened accountability or enhanced controls have spawned a growing PPM market. This market has expanded from $186 million in 2001 to an expected $1.7 billion by 2005, according to Gartner (Figure 1).

As the market for portfolio and project software continues to build momentum, demand for applications that optimize portfolio planning, resource allocation and monitoring of investments in strategic programs may expand to non-traditional IT functions as well – these may include sales and marketing, capital investments, real estate and operations.

For example, while the Project Portfolio Management market is currently geared toward IT, PPM can support projects and initiatives across the enterprise. Figure 2 highlights how PPM can complete the enterprise suite and integrate with CRM in Sales/Marketing, ERP in Finance/Operations, or SCM for Supply, Manufacturing and Logistics.