A project portfolio decision gate framework is a governance structure to evaluate, authorize, and monitor projects as they pass through the project lifecycle and is a critical component of project selection and portfolio oversight. In the previous post we discussed the work intake process which brings new project proposals to the portfolio governance team. In this post we will cover the basics of how a project portfolio decision framework further enhances portfolio management. A winning portfolio must contain winning projects, therefore the PMO and portfolio governance team must be able to discriminate between good projects and great projects. This process enables the governance team to review projects in a consistent way based on defined criteria for each gate.

Project Portfolio Decision Gate Framework Overview

A project portfolio decision gate framework commonly includes two or more phases such as: Discovery, Planning, Develop, Execute/Control, and Closure. For each phase of work, the project team has a set of tasks to complete before returning to the governance team for a gate review. At each gate review meeting, important information is provided to the portfolio governance team to make a go, no-go, hold, or modify decision related to the project. Without this type of decision framework, unnecessary or misaligned projects can enter the portfolio and significantly reduce the benefits from strategic projects in the portfolio. Project deliverables and metrics further ensure that the projects are done right. Together, a successful project portfolio decision framework ensures that the right projects are done right. The diagram below highlights a sample project portfolio decision framework where portfolio criteria is used at each gate to ensure the right work is being done.

Reasons For Developing A Portfolio Decision Gate Framework

There are eight reasons why you need to develop a good portfolio decision framework.

Without a good project portfolio decision gate (phase gate) framework, unnecessary or misaligned projects can enter the portfolio and significantly reduce the benefits from strategic projects in the portfolio.

Screen Out Misaligned Projects

A good portfolio decision gate framework helps Project Management Offices (PMOs) and Portfolio Managers filter out poorly aligned projects. Every organization will have more projects than it can execute, which requires the portfolio governance team to carefully select the best project. Some projects may look good on paper but are completely misaligned from the organizational objectives and strategies. When organizations have well established evaluation criteria, gate reviews are an excellent way of filtering out these misaligned projects.

Control the Flow of Incoming Work

Project portfolio phase-gate reviews can also act as a valve to control the number of projects entering into the portfolio. Even if every proposed project is a winner, your organization still has limited resource capacity to get the work done. Projects need to be initiated at the right time so that the organization is not overloaded with work. A good portfolio decision gate framework works in parallel with portfolio planning.

**PRO TIP: conduct gate reviews less often (consider quarterly) in order to have more projects to consider and force decision makers to make trade-offs. Conducting gate review meetings too often can result in approving too many projects.

Steer the Scope of Project Work

Project portfolio phase-gate reviews afford the portfolio governance team an opportunity to direct the scope of projects. Without these reviews, project work can continue for months without executive oversight. Successful organizations review the statement of work for each project and identify “must have” versus “nice to have” components of scope. This is important because it gives the portfolio governance team options when reviewing and selecting projects and does not force them into making “all or nothing” decisions.

Improve Project Quality

A good portfolio decision framework provides the portfolio governance team with project deliverables that contain key project information. The deliverables themselves ensure consistency in the process and help ensure that a good project plan is in place. By having the portfolio governance team review key project deliverables, it helps ensure that Project Leaders create higher quality deliverables.

Greater Visibility of Important Projects

Having a good portfolio decision gate framework provides much needed visibility to the entire organization of what projects are being reviewed and what is the current status of each project. Without a good portfolio decision gate framework, it is easy to lose track of projects, and even worse, shadow projects get approved without formal reviews, eroding portfolio value.

Better Monitoring of Project Progress

A portfolio governance framework not only allows greater visibility of work, but also provide a mechanism for tracking progress and status of projects at different phases of the project lifecycle. Projects that have been stalled in a particular phase or are in difficulty can receive help from senior management faster because the projects are being monitored. This type of project monitoring includes managing project interdependencies.

Improves Communication Throughout the Organization

Solid portfolio communication is a success factor for good portfolio management. Having a good project portfolio decision gate framework strengthens and improves portfolio governance communication throughout the organization by providing greater visibility of projects in the portfolio and decisions being made. By utilizing a common project language and having a consistent process, employees will better understand the work being done across the company.

Provides Structure to the Project Management Process

Finally, this decision gate framework provides structure for the project management process by determining a minimal set of project deliverables needed for gate reviews. Although the project portfolio decision gate framework by itself does not replace a formal project management methodology, it does standardize the process for bringing projects through each review phase, thus reducing confusion and strengthening the project management process.

 

VIDEO: Portfolio Decision Gates

Summary

The project portfolio decision gate framework is an important component of portfolio governance and can apply to waterfall or agile projects. After an organization establishes a work intake process, a full governance framework can be added to increase the quality of decision making and help ensure the portfolio contains winning projects. The key is to have just enough process to be effective without being bureaucratic. Only information that the portfolio governance team needs to make a decision should be collected as part of the gate reviews. Like any process, information that is collected but not used is a drain of organizational resources. This type of framework can be very effective when set up correctly.

 

 

What is a project portfolio decision gate framework?

The project portfolio decision framework is a governance structure to evaluate, authorize, and monitor projects as they pass through the project lifecycle and is a critical component of project selection and portfolio oversight.

What does a portfolio decision gate framework look like?

A project portfolio decision framework commonly includes two or more phases such as: Discovery, Planning, Develop, Execute/Control, and Closure. For each phase of work, the project team has a set of tasks to complete before returning to the governance team for a project review. At each project review meeting, important information is provided to the portfolio governance team to make a go, no-go, hold, or modify decision related to the project.

What are the benefits of a portfolio decision gate framework?

There are several benefits for developing a project portfolio decision framework including: the ability to screen out misaligned projects, to control the flow of incoming work requests, to enable leadership to steer the scope of projects, to improve project quality, to gain greater visibility of important projects, to monitor project progress, to improve communication throughout the organization, and to provide greater structure to the project management process.