Everything about Project Portfolio management and rationalization

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Projects are small components of Portfolio management.

Hence, a group of projects is called programs, and by contrast, it is a zoomed out picture.

PPM is a strategic system of estimating multiple projects so that project and program managers can make informed decisions when accepting, prioritizing, and trying projects.


What is Project Portfolio?

A Complete Overview of Project Portfolio Management | Smartsheet

So, The project portfolio is defined as the process in which projects are selected and managed. 

Hence, The project portfolio is strategically chosen to develop the company’s goals. 

Companies will have a number of project opportunities than their funding can maintain. At the same time, officials wish to control the overall risk of the portfolio while assuring that cash flow and other such necessities are satisfied.

So, Project Portfolio Management arranges a company’s desires with the resources to get it done. Meanwhile, this injects realism into the organization’s planning processes. So project portfolio management enables enterprise-wide planning and resource allocation. 

So, Project Portfolio management lets the organizations view all the initiatives that are competing for resources. Once initiatives are defined, budgets and resources can be allocated and timelines can be established.

Benefits of Project Portfolio Management

There are many benefits of PPM, and we will have a look at a few important ones

Adjustment of Projects to Business Goals

It is must to verify whether your project fits within the range of organization plans

Communication of Project data to the Executive Level

The proper and effective communication gives a good and better project data so which we help the executives to analyze and make necessary decisions

Allocation of Resources

You can reallocate the resources for better utilization and hence reduce the time waste

Identification and Correction of Performance Problems

By this, we can find so many hidden or untouched problems. So that we can resolve them and it is also considered as a benefit

Identification and estimation of Project Risks and Results

You can also find and evaluate the risks involved, and also you can create or form a solution to avoid them

Project Portfolio management tool

Project Portfolio Management Software

Hence, A project portfolio tool is a centralized management system whose sole purpose is to look for and manage the Project Portfolio Management process. 

To accomplish all these processes suggested by PPM, so there are plenty of software tools that automate processes (which will reduce manual calculations and work).

Benefits of using the PPM software

  • Grants visibility to each part of the PPM process
  • Helps in standardizing the process
  • Provides all documentation and communication
  • Ensures proper data collection

PPM software also has some limitations like,

  • It is very difficult to control and monitor centrally
  • It is hard to understand for all employees

What is the best software or tool for PPM and How to Identify it?

Every tool that exists has its own advantages and disadvantages. So you need to avoid choosing a tool based on its functionalities.

In fact, sometimes, tools or software may not solve all your problems overnight. 

In a few rare cases, tools may create problems also.

To obtain the right PPM software for your company, you must count two key factors:

organizational fit and cost;

Coming to the first step, So in organizational fit, you need to define the specific requirements of your company, and if and how a software tool can satisfy these requirements. 

“Each and every tool has its own strengths and weaknesses. So the first question you need to 

ask yourself is: How will the tool work in your circumstances?”

So, Here is a list of questions, that can guide your investigation into PPM software fit:

How do you want to use a tool for yourself?

Which features are important to you?

Is it suitable for other programs as a key element? And some more questions you have related to the PPM tool.

Ask all these questions to yourself for reducing risks.

The second factor is cost, make sure that you have enough budget to implement a PPM tool in your company because it involves some extra money. For example, you may need to provide the training of the PPM tool or software for your team.

So, do implement it if you have some extra budget which is more than the cost of the software.

You can ask these questions which will help you to avoid choosing the worst tool:

Hence, What is the initial cost, and what is the licensing cost of the software?

Do you need to make any changes to your working environment?

What are the continuous costs of maintaining the software? 

Do you need to provide any training to the employees?

If so, How much will it take for training the employees?

So, is it profitable to take the tool now?

Most companies implement a new software package without knowing how it goes into the organizational context and culture, and then they wonder why there is resistance to its use.

So make sure that you ask all the questions and then conduct a meeting or a survey within the company to decide whether to implement software or not?

What is Project Portfolio Rationalization?

The aim is to maximize profits by optimizing the project portfolio – holding only those projects that are giving excellent value while rejecting those that are not.

A portfolio-based strategy is supposed to generate higher yields because it acknowledges that together with one set of arrangements or portfolios of projects might produce extra worth than another. Therefore, to maximize grade, one has to focus on the portfolio not individual investments

In other words, the value of the project to the company is measured in the connection of the returns generated by the entire portfolio. 

So, a project that is producing profits might be less desirable than one that is not because the following might be letting other projects produce higher-value thereby causing the project portfolio as a whole to create more value for the enterprise.

Project portfolio rationalization reflects investment management strategy, i.e. it treats each project as an investment and estimates the value of the project based upon the market value made by or through it even though the condition is to quantify both the investment and the profits.

Portfolio rationalization is a portfolio based path

i.e. It takes a holistic look at the company’s projects, aka project portfolio. However, it categorizes the project portfolio into groups, each with a standard and constant investment governance policy.

  • PPM focuses on major projects
  • It controls a project’s life cycle, so it is used throughout
  • PPM calls for a constant approach to group projects

Rationalization is a rearrangement of a company in order to enhance its efficiency. 

Joining in project rationalization, especially during mergers and acquisitions, helps companies decrease costs, run more efficiently, and concentrate on supporting deal goals, legal and administrative issues, systems and method integration, and business continuity. 

Most businesses collect a vast information technology utilization portfolio over time, especially 

when businesses grow and do not entirely integrate services and assets with every transaction. 

Many applications do not carry the company’s goals after each merger or acquisition and need a review to support the new business. 

Examining a company’s application portfolio is necessary to attain more productive operations and cost combinations, decreasing stranded costs left by a dealer and streamlining the portfolio to fully serve the business.

If a company is not rejecting the bottom 20% of projects yearly, then it is not executing its project portfolio effectively. We have methods to help estimate and score these projects so that they are listed in order of their “true” ROI, clearly recognizing the bottom 20%.

Application portfolio rationalization

First, we will know What is Application Rationalization?

Application rationalization is the method of finding and resolving duplicate software applications used across an organization.

Why does a company need Application Rationalization?

Around 70% of companies do not have standard documentation on the present version of their application portfolio.

Without Application Rationalization, companies may face the risk of:

  • Unable to respond to changing business conditions quickly (at the right time)
  • Not giving proper updates and additions to bug fixes
  • Continuing on to low-value IT projects
  • Increased cost
  • Missing business opportunities
  • Not only is Application Rationalization an efficient way to recognize capital for reinvestment, But it also helps in filling the gap between It leaders and business persons.

Benefits Application Rationalization?

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Application Rationalization reduces complexity and lowers the amount spent.

And now we will have a look at the important benefits of Application Rationalization?

  • Decreases IT cost
  • Reduces unnecessary IT spend
  • Reduce complexity
  • Eliminate repetition
  • Reduced training


The main purpose of the rationalization of the project portfolio is to stay updated with uncertainties in the organization and changes in the market. This rationalization has so many benefits, and it will help you to adapt to the different conditions and that too, with less amount of expenditure.

Also you can read our blog on The Most Important Project Management Phases and Processes


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portfolio management,portfolio rationalization,project portfolio management,What is the project portfolio?
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