What is a Project Portfolio Management Tool supposed to do?

Project portfolio management tools are software packages offered by consulting offices or software vendors for the purpose of assessing the possible risks each project may encounter and determining the projects which have the greatest value. Each project is analyzed by its contribution to fulfilling business objectives and the most productive investment of your time, resource, and budget. The core functionality that each Project Portfolio Management tool provides the following:

Pipeline management: Analysis of whether a project can be finished in the allocated time and resources on hand. Constant real-time overview which projects complete the business goals and bring the most value in return

Resource distribution: (Sometimes known as demand or resource management) it is the distribution of financial, inventory, technical, and human resources. Some system go even further to help you model a hypothetical project and apply “what-if” scenarios to your resources. An example of this type of software is forecast.it

Change Management: Fluctuations such as regulatory demands, operational constraints, or any new changes are managed through a central repository that allows for various changes. Project progress and budgets can then be accessed and maneuvered to accommodate the changes.

Financial Administration: Based upon the business’ strategic objectives and organizational priorities, managers can estimate the economic value of projects and evaluate if the project would be the best financial investment. Parameters are easily changeable, and the long-term financial outcome should be foreseeable in the software.

Risk Management: Often referred to as “portfolio change and risk management”, risk regulation models display the risks each project will face. With this information, business executives can quickly decipher whether to execute a project.

Software that is created for the purpose of being a tool in project portfolio management will include the above functionalities. Just like a tailored suit size does not fit everyone, every PPM tool has its unique features which will meet different needs. Every company must find a tool suitable to the needs of their business PPM.

Originally published at www.quora.com.

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