Project Management OfficeRisk Management

PPM’s Role to Counter Unprecedented Project Risks

The growing intricacy of projects and programs in the pandemic has encouraged PPM usage. Project portfolio management teams are efficient in streamlining and aligning company goals and strategies. In this article at TechTarget, Margaret Rouse defines how a PPM can oversee and counter emerging project risks and portfolio challenges.

Get the Real Insight

Project portfolio management is a conventional methodology used by enterprises to manage, prioritize, and analyze project risks and rewards. It does not run your projects but shortlists and executes the reliable ones and saves funding for better options. The PPM team scrutinizes each project to ensure if it supports your organization’s business goals and objectives. Weak projects may tarnish your brand value and affect other endeavors within the portfolio.

Bring in Transparency

Thanks to COVID-19, organizations are making new business plans to utilize the limited funds for a definite return in the future. Project selection mostly counts on time and budget. Follow the time and value of money formulas to reschedule your projects better:

  • Future Value=Present Value (1+i): In this formula, the (i) signifies the interest rate while (n) is the number of time duration. It helps estimate the project’s future worth by calculating the current budget with the estimated interest rate. You can estimate the future rate and choose or drop the project by analyzing your organization’s current or future investment.
  • Present Value=Future Value/(1+i)n: Here also (i) stands for the interest rate and (n) signifies the number of time duration for the project. The formulas validate the current worth of the project by analyzing future income. If a project requires far more than its future value, it would not be an ideal investment for your organization.
  • Net Present Value: It identifies the year-on-year worth of a project. The formula is suitable for your long-term projects. For instance, if a global enterprise initiates updating its plant equipment with advanced efficiencies, the project would take years to accomplish. Net Present Value would help you identify the project’s current cost for your future fund requirements to complete it.

Understanding project funding through current and future possibilities can help you initiate risk management strategies. The risk-reward ratio in the PPM illustrates the probability and impact of year-on-year project investment. The project and portfolio management team usually disperse risks by investing in small projects that offer fewer future complications.

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