Aarni Heiskanen, LJK, is a
partner at Thinking Business
Group. He has 10 years
of experience in strategic
portfolio management and
has consulted for several
Heiskanen is a codeveloper
of Thinking Portfolio®, an
online tool for project and
asset portfolio management.
Heiskanen can be reached
Project Portfolio Management
A program or project portfolio explains how
an organization is implementing its strategy
with projects. If product management answers
the question “Are we managing the projects
correctly?,” then project portfolio management
answers the question “Do we have the
that compare the results to the stated objectives
should be included in development projects.
This feedback is necessary to improve the
project portfolio management process and the
project evaluation criteria. Appraisals are a way
to educate management on how to set effective
goals and how to ensure that those goals can be
achieved through projects.
DeveLOPmen T PrOJeCTS uSuALLy FAIL,
exCePT by CHAnCe
Although an increasingly larger part of
organizational development takes place in
projects, only one out of four development
projects succeed. Projects are easy to start, but
hard to finish.
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The reasons for project failures can usually be
ascertained by determining what has happened
before, during and after a project. Unsuccessful
projects are often caused by:
• Poor planning
• Lacking or fuzzy project ownership
• The lack of a business case
• No explanation of the project’s affiliation with,
and effect on, the corporate architecture
• Inadequate preparation, which leads to a
project that solves the wrong problem or solves
the right problem in the wrong way
WHy IS IT SO HArD TO IDen TIFy THe rIgHT PrOJeCTS?
Problematic project choices are often structural.
Roles and rules are missing in the organization,
making it impossible to render feasible decisions.
Factors that can lead to bad decisions include:
• The organization sees the project as a solution for
all challenges; there are too many projects going
on at once, and starting a new project is easy.
• Management lacks criteria to evaluate projects.
• Decision makers finance their own pet projects.
• Technology is an end in itself; there is a desire
to implement new technologies quickly even
if they lead to incompatibilities with the
• Management lacks a coherent way to align
projects with strategic objectives.
• Organizations are unable to manage the
totality; the lack of an overall grasp often
results in overlaps and inefficient scheduling.
For a project to succeed, the choices made at the
next phase are crucial. These choices include the
selection of the project manager, project team
and steering group. However, if a project does
not have sound starting points, even a good team
could fail to save a project.
An inadequate implementation plan is the final
factor that can sabotage an otherwise successful
project performance. After a project has been
completed, there is a tendency to focus on the
next project, neglecting to confirm the utilization
of the results. Proper subsequent appraisals
PrOJeCT POr TFOLIO mAnAgemen T AS A SOLu TIOn
TO PrOgrAm PrObLemS
Project portfolio management (PPM) is the
management of an organization’s development
projects as a totality that systematically and
consistently implements an organization’s
strategy. There are prerequisites for successful
program management, including:
• Unified concepts and a consistent
• A management process in which the project
portfolio has a designated task
• Tools that enable the management and project
organizations to communicate the status of
planned, current and completed programs