Successful companies distinguish themselves from others by aligning their entire portfolio with the strategic goals of the company. In practice, this applies to the introduction of a new product or to companies in which project-based business processes play a central role. For finance and resource-intensive projects, it is important to recognize profitable projects and to monitor and control these accordingly.
PPM is a tool that supports companies in their strategic and operative portfolio management. PPM enables you to manage several portfolios such as product innovations, service industries, and IT initiatives. PPM can combine data from various project management, human resources management and financial systems. This enables new cross-functional business processes and the ability to have an extensive overview of all business processes.
Strategic and Operative Portfolio and Project Management
PPM helps you to overcome the challenges of strategic and operative portfolio management achieving the following objectives:
Align your portfolio with your corporate goals:
With PPM, your portfolio items and initiatives are regularly assessed according to their exact strategic value, and your commercial success is proven and accelerated.
Maximize the value of your portfolio:
You can select the most promising portfolio items and guarantee steady success. At the same time, you can ensure a balanced portfolio with acceptable risks, dynamic business targets, and various investment types.
Create more transparency and make informed decisions:
PPM combines data from SAP and external systems, so that underachieving or overlapping projects and capacity bottlenecks can be quickly recognized and adjusted.
Use your resources more effectively:
PPM helps you track and prioritize resource requests from various project management systems, and reconcile the availability specified in the HCM and financial systems. In this way, you can find suitable resources (internal or external), lower costs, and benefit from the optimum personnel assignment of your projects.
Control your portfolio more efficiently:
Using automated role-specific workflows, you can optimize approval procedures, resource allocations, or successive evaluations. A strict workflow-based process control enables you to implement investment guidelines throughout the company for product developments or IT projects.
Reduce your total cost of ownership:
PPM can be integrated with many back-end systems from SAP. In this way, you can continue to optimize existing IT systems and available skills.
Business Functions in Portfolio Management
PPM offers many functions that support you in managing your portfolios. Some of the key functions are as follows:
Portfolio definition:
You can define several portfolios and subdivide portfolios hierarchically according to your own requirements by using portfolio buckets. This means you can monitor your portfolio items such as projects or product initiatives in an overview. The use of collections, reviews, or initiatives enables you to manage portfolio items of different portfolio buckets of a portfolio at the same time if necessary.
Questionnaires and scoring model:
You can define your own questionnaires to determine critical success factors for your portfolio items and initiatives. Using your own scoring model, critical success factors can be automatically derived from the portfolio item data and then used for prioritizing. These functions allow you to align your portfolios with your corporate goals.
Financial and capacity planning:
For the purpose of forecasting or for strategic planning, you can enter financial and capacity data at the level of portfolio buckets, individual portfolio items, or initiatives. You can then compare these data with detailed planning values or actual data, which can be combined in PPM from S/4HANA PPM projects or PS projects.
Control:
Reviews allow you to make decisions about portfolio items in PPM; for example, you can decide which IT projects should be implemented or which projects can be canceled. If necessary, you can also use simulations and what-if analyses to discuss alternative scenarios for portfolio items. Using individual decision points and versions, you can control and trace the flow of your portfolio items. Using workflows, you can also ensure that changes are communicated and therefore, your company’s guidelines are followed.
Integration:
You can link various project management systems such as Project System, Project Management, or Microsoft Project with PPM to uniformly monitor structural, date-related, or resource information. The unification of resource data also allows resource planning across all project management systems in PPM. Resource information, such as the availability of employees or their skills, can also be integrated in PPM for resource planning from personnel administration. In addition, integrating PPM with financial systems enables a standardized evaluation of the costs, revenue, budgets, or commitments of your portfolio items.
Resource planning:
Along with the strategic planning of capacity requirements, you can also implement detailed resource planning for your portfolio items in PPM. This means that resource information from integrated Project Management systems and human resources can be combined uniformly in PPM. Fast entry screens allow resource managers tabular access to the resources and projects assigned to them.
Reporting and analysis functions:
PPM uses dashboards to display basic data of portfolio items in an overview. Traffic light functions alert you to exceptions and allow you to examine these exceptions in detail. Reporting cockpits allow tabular and graphical evaluations of the critical success factors of your portfolio items. You can use queries directly in PPM to perform cross-portfolio analyses for the strategic alignment of portfolio items, or for the financial or capacity situation of your portfolio.
Roles in PPM
The following table shows the typical roles and tasks in PPM:
| Portfolio Administrator | Item Manager | Portfolio Manager | Resources Manager |
|---|---|---|---|
| Creates portfolios | Monitors portfolios | Monitors dashboards | Plans strategic capacity requirements |
| Creates portfolio structures | Creates and edits portfolio items | Analyzes portfolio | Distributes resources |
| Creates resource pools | Uploads project data | Implements strategic planning | Monitors capacity situations |
| Configures dashboards and graphics | Changes item status | Creates reviews | |
| Creates portfolio items |
PPM can be used by various groups of people with the relevant roles. The table, Roles in PPM, shows the various groups of people and their typical tasks in PPM. The individual tasks and the related business processes are explained in detail later on in this course.