There are lots of software vendors today espousing their portfolio management capabilities.  Unfortunately most are not particularly well suited to support the corporate portfolio management function, which involves the strategic allocation and monitoring of resources across–and beyond–the enterprise.

Most portfolio management software solutions have grown out of project management roots [analyst firms now characterize the category as “Project & Portfolio Management (PPM)”] as far back as the 1970s.  Indeed, the “portfolio management” aspect of PPM software solutions oftentimes requires the “project management” component to be fully implemented.  Project management software was originally designed for and targeted at technical users, i.e., users formally schooled in the “science” of project management (Gantt charts, Program Evaluation and Review Technique (PERT), Critical Path Method (CPM), event chain methodology, resource leveling, etc.).  Initially utilized in a few project-specific vertical industries (e.g., construction, engineering, defense) project management software subsequently found a second base of users able to assimilate its technical bent: IT organizations, where, since the 1980s, PPM software vendors have focused their efforts.

As a result, PPM software has largely (there are a few exceptions) evolved to support IT-specific functions and resources.  The resources supported in most PPM software solutions do not extend much beyond people (employees) and capital (employee costs).  Yet, according to Wikipedia, project management (and certainly portfolio management!) resources encompass “money, people, materials, energy, space, provisions, communication, motivation, etc.”  In particular, PPM software support is found lacking in terms of physical asset resources (e.g., equipment, stores, plants) and services resources (e.g., marketing creative services, training, channel partners).  To be fair, some of the IT management software vendors are attempting to integrate support for physical assets with human resources, but their scope is limited, again, to the IT organization (and IT assets).

There are other glaring omissions in PPM software for the strategic corporate portfolio management function, including, but not limited to, lack of support for revenue modeling (most support cost modeling only); no linkage to strategic objectives and the strategic planning process; and the dependence on dated, unwieldy timesheet data entry required to support the resource management/allocation function (more on this in a future blog).

Bottom line: Users should tread carefully when wandering into the PPM software forest.  There are only a few trees that are adequate (and oftentimes necessitating a combination of those trees) for managing the corporate portfolio of strategic initiatives.