Top Down Approach to Project Portfolio Management - Why Is It Important?

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Top Down Approach to Project Portfolio Management
- Why Is It Important?
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Every organization works hard to dedicate
sufficient resources to the processes that matter
the most. This approach is known as portfolio
management and its adoption happens to be
tremendously important for increased productivity
and cost-effectiveness of the crucial
organizational procedures.
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Top down project portfolio management is becoming
an increasingly popular concept among business
managers. Several reasons determine its
attractiveness and necessitate the adoption of
such an approach. Why is top down portfolio
management so important and what are the major
ways in which it can affect businesses?
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What is Top Down Project Portfolio Management?
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This approach relies on the selection of project
portfolio management (PPM) software for the
adoption of a solution-oriented approach towards
corporate processes. Theres a significant
difference between the top down and the bottom up
approach. In the case of top down management,
individual tasks and processes are examined by
managers to stimulate more effective overall
execution.
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According to many, the top down approach results
in better project planning and improved overall
project execution.
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The top down approach provides an ongoing view of
all essential processes, tasks and micro-tasks.
It makes it easier for managers to make informed
decisions and to relocate resources on the basis
of current necessity. Objectives are defined by
the company managers and expectations are
communicated clearly with all other members of
the team.
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The bottom up approach involves a reversed
structure all team members provide their input.
The problem with this process is that the
significant networking required for execution
will take up large amounts of resources and
theres no full or centralized control. The
results of bottom up project management also
happen to be more difficult to measure.
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Why is Top Down Project Portfolio Management So
Important?
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A top down approach stimulates the implementation
of the solutions that make sense both in
financial and organizational terms. Resources get
allocated in the most rational way, which
decreases the cost of execution and prevents the
loss of resources on processes that may not
necessarily be effective.
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Link-PM offers ready-to-use robust powerful
control tools for globally prioritising, planning
executing projects, programs and portfolios.
Project Portfolio Management Software
Request a Demo
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When top down solutions are implemented, the
focus is on the business objective and the
desired outcome. Management becomes easier team
leaders become capable of avoiding unnecessary or
excessively costly challenges.
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Unrealistic execution schemes are seen as a
serious problem in the case of bottom up
execution. These stem from the lack of
centralized monitoring and the chaotic
communication that could be typical for bottom up
management. This is one of the main reasons why
numerous large and successful corporate
structures have adopted a top down approach to
project portfolio management.
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The Most Important Benefits of the Top Down
Approach
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Top down project portfolio management results in
a vast range of advantages, some of which have
been discussed already. Taking a deeper look at
all the positive characteristics will shed some
light on why this approach has been widely
adopted in successful organizations.
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Better Project Alignment
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This approach makes it easier to define a
systematic approach to task execution. Managers
select the most effective solutions, keeping the
focus on the main goals and diminishing the
prominence of unnecessary executions.
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Better Planning And Execution
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Having full view over the numerous corporate
processes that take place simultaneously will
enable managers understand the big picture. This
aspect of top down project portfolio management
will ultimately lead to better planning and
better planning is the key to more effective
execution.
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Visibility
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The top down approach guarantees much better
visibility. Managers communicate the companys
needs clearly with the team. They pass vital
information down the chain, which means that
everybody is on the same page.
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Control your Operations, Tasks and Projects with
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Link-PM offers ready-to-use robust powerful
control tools for globally prioritising, planning
executing projects, programs and portfolios.
Project Portfolio Management Software
Request a Demo
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Workers in the company understand the task at
hand and they know where to get additional
information (from their supervisor). The
structure has delivered excellent results for
many years and it continues guaranteeing a high
level of visibility till present day.
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A Sense Of Purpose
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Everybody in the corporate organization is aware
of the major goal. Every team member understands
tasks and the manner in which individual efforts
contribute to accomplishing the major goal. Thus,
top down project portfolio management results in
a sense of purpose and standardized procedures,
as well. The two factors work together to
guarantee product or service quality in the long
run.
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Good Structure
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The corporate structure is clear and easy to
understand. Bottom up project management can
easily lead to chaotic communication, a problem
that is non-existent when the top down approach
is implemented. Theres a well-defined hierarchy
and a clear structure. This structure is highly
functional and everybody is accountable for a
certain element of project execution.
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Interesting Project Portfolio Management Data
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Many companies still stick to a bottom up
approach, regardless of the fact that it seems to
be standing in the way of efficiency. Though
bottom up project management may sound logical,
it is connected to very difficult verification of
benefits and the investment of large amounts in
processes that dont deliver the expected results.
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According to Kaplan and Norton statistics for
2013, nine out of 10 companies fail to implement
an effective project management strategy. IBM
estimates suggest that 40 percent of the
investment in IT solutions is wasted due to poor
project portfolio management. These problems
often stem from the chaotic and random nature of
the bottom up approach.
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When a poor strategy is chosen, portfolio
management will not deliver the expected results.
Strategies will lack focus, which is the most
important prerequisite for maximum productivity
and cost-efficiency. Bottom up approaches may
work for already established procedures but when
it comes to transformation and boosting
productivity, this portfolio management strategy
will be weakened by multiple shortcomings.
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Effective portfolio management is the most
important element for strategy execution. It
enables corporate structures to move forward and
benefit from a high level of accountability. Many
companies are still failing at this critical
process but change is possible and necessary.
33
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Link-PM offers ready-to-use robust powerful
control tools for globally prioritising, planning
executing projects, programs and portfolios.
Project Portfolio Management Software
Request a Demo
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