Strategic Portfolio Management: A step up from PPM

PPM has long been the name of the game, encompassing the way organizations select and drive projects.

But, as modern organizations evolve, it has become clear that there is a potential to evolve.

For a long time, PPM has been focusing on maximizing the return on investment, aligning processes, and streamlining information flows.

However, most organizations are a hybrid organization, that is, they don't run a common methodology or utilize the same tools and software. Rather, half the organization may be agile while another part is creating products or manufacturing with strict deadlines, and others are running maintenance or delivering continuously in a way that clashes with other parts of the organization.

That’s where SPM comes in.

What is Strategic Portfolio Management?

Strategic Portfolio Management puts strategy first: aligning the portfolio according to strategy and practicing decision-making that brings the portfolio closer to the overall goal.

But this doesn't mean that your efforts have been wasted. But you can still gain a lot from shifting your focus from project execution to strategy execution.

SPM vs. PPM

A lot of elements of PPM are also part of SPM. Both involve managing portfolios and getting good results; however, their focus can vary somewhat.

In short, the key differences can be summed up like this:

PPM drives projects. SPM drives strategy.

So, where PPM often keeps the focus on project execution, SPM keeps long-term organization strategy in mind.

Where PPM ensures efficient execution, SPM aims to align projects with the strategic goal so projects are feasible as well as contributing to your company vision, both now and in the future.

Where PPM decisions often revolve around project feasibility, risk management, and resource management, SPM takes it a step further and includes the strategic relevance of projects, how they impact the business, and the overall portfolio balance.

Strategic Portfolio Management is not just about the projects. It’s about making the parts fit together in a way that drives strategy forward.