Project Portfolio Management Guide: Functions, Future, and Software Choice

The most common challenges with project portfolio management include complexity with implementation, change fatigue, bureaucracy, communication and collaboration breakdowns, and outdated tools and technology. But organizations that build structured supports — such as training and mentoring — overcome these challenges.

According to PMI’s Pulse of the Profession 2024, companies that establish at least three organizational “enablers,” such as mentoring, communities of practice, and skills development, report project success rates eight percentage points higher than those without enablers. 

Here’s a closer look at frequent PPM obstacles and how to handle them:

• Initial Investment: Launching a portfolio management framework requires upfront investment in people, training, and tools. You’ll likely need to hire people with PPM expertise, purchase or configure a platform, and focus time and energy on successful adoption. 
  
  Costs can be substantial, but so are long-term gains in efficiency and strategic control. A cost-benefit analysis can help you demonstrate how PPM’s efficiencies and alignment justify the investment. (Also, see the project portfolio management starter kit below, which includes a slide deck to make the case for PPM at your company.)
   
• Implementation Challenges: PPM implementation can be time-consuming due to complexity, and it might even initially lower productivity until it takes root.
  
  “Project portfolio management is a simple concept, but can be incredibly difficult to implement,” says Richter of Smartsheet. “A PPM solution needs to work at every level of the organization and be adapted to dramatically different audience types. It can be time-consuming to create and maintain the system required to support true PPM. Even the best portfolio management framework can fall apart if there isn’t total buy-in from the teams expected to work within it.”
  
  Zucker emphasizes overall Lean thinking as a way to overcome PPM challenges: “Lean portfolio management is a reaction to a lot of the problems that we'd seen in the traditional view of portfolio management — for example, creating flow, pushing decision-making down, and eliminating waste.”
  
  For details on how PPM works, see these guides on implementing PPM effectively and PPM processes, phases, and workflows.
   
• Change Management and Change Fatigue: Managing change is one of the toughest aspects of portfolio management. As organizations scale and projects multiply, priorities shift more frequently. Without open communication and realistic pacing, employees might feel change fatigue, where the constant pivoting undermines productivity and morale. 
  
  The 2025 Smartsheet PPM Priorities report finds that 92% of PPM professionals say adapting to change remains a significant struggle, and 71% say constant workplace shifts make it difficult to stay productive. Frequent reprioritization without clear guidance, the report notes, leads to disengagement. 
  
  The report also notes that organizations that establish a clear, repeatable framework for managing change adapt significantly faster than those that respond reactively.
   
• Limited Visibility With Data Silos: Portfolio success depends on transparency, but many organizations can’t see across departments, projects, and systems. That means you can’t uncover risks or make informed tradeoffs.
  
  According to the Smartsheet study, 66% of PPM professionals lack visibility into the information they need when change occurs, and 37% cite poor access to project data as a top barrier to adaptability. Visibility gaps like these often trace back to disconnected systems or manual reporting processes — issues modern PPM software aims to solve.
  
  “Organizations face many challenges in making strategic decisions, with the top three all relating to their ability to access the right data at the right time,” the report states. “For most, data/information need to be collected from multiple teams (38%), reside in different systems (35%), and lack consistency (35%).”
  
  Smartsheet Marketplace add-ons, such as Data Shuttle and Resource Management, help bridge system gaps by syncing data across platforms and enabling workload visibility.
   
• Communication and Collaboration Breakdowns: PPM thrives on alignment across functions, but communication barriers can stall even well-planned portfolios. Teams may have differing interpretations of priorities or incomplete information about interdependencies, which creates inefficiencies and redoing work. 
  
  In Smartsheet’s 2025 survey, 45% of professionals identified ineffective communication and collaboration as their biggest obstacle to adapting to change. This finding reinforces what many experts observe: The success of PPM relies on both technology and culture, particularly transparency and shared understanding.
  
  The report recommends that leaders communicate not just what is changing, but why. Link each change to business impact and employee benefit to maintain engagement during transitions.
   
• Inflexible or Outdated Tools: Legacy tools or rigid processes can make PPM cumbersome. When teams have to enter data manually or systems don’t talk to one another, teams lose the speed and adaptability that PPM is designed to deliver.
  
  The Smartsheet report found that 43% of respondents struggle with inflexible technology or processes, while 39% point to manual workflows for intake, execution, and reporting as major barriers.
  
  The Smartsheet report also notes that technology plays a major role in overcoming many PPM challenges. Nearly all professionals (99%) said better tools — particularly those supporting collaboration, analytics, and automation — would help their organizations adapt to change more effectively.
   
• Ongoing Administrative Costs: PPM has ongoing administrative costs that may or may not be higher than a company’s previous project efforts. These costs could include team members with PPM expertise, including a PPM VP or director. There’s also the cost of the technology, including maintenance. The idea is to offset any increased costs with increased ROI.
   
• Bureaucracy: Too much oversight can slow decision-making and dampen innovation. While structure and accountability are essential, excessive review cycles and approvals can frustrate teams and undermine agility.
  
  
  
  “We were guilty of this by creating the project intake forms and approval processes so complex that the production teams had difficulty coping with them,” says Leon Huang, CEO at RapidDirect, an on-demand manufacturer that specializes in custom parts.
  
  “We corrected this by taking a Lean approach — always asking ourselves if the step adds value as it relates to the manufacturing process. We streamlined our PPM processes by focusing on what was necessary and eliminating unneeded bureaucracy.”
   
• Funding Overload: With PPM, annual funding cycles might lead to excessive project requests and resource commitments. This can result in teams being overwhelmed and unable to complete projects effectively.
  
  “Traditionally, organizations have annual funding cycles,” Zucker says. “A lot of time and effort is expended developing project requests and budget justifications. Teams request two or three times more money than they could reasonably spend under the expectation that the request would be halved. Then, at the beginning of the year when the funds are released, teams start executing more projects than they can effectively manage. Everyone is very busy, but projects are not getting completed.
  
  “To improve the process,” he continues, “we can take lessons from Lean. Rather than having effort-intensive annual funding processes, simplify everything. Move to a rolling funding model. Push tactical funding decisions down to the lowest responsible level in the organization. Create pull and do not start a new project until the teams have the capacity to deliver it.” 
   
• Required Skill Sets: An organization may need to hire people with PPM expertise to implement and run this new approach, which can be expensive and time-consuming. However, just as the increased administrative costs can be offset with a high ROI, the benefits of PPM training can be extensive. For example, team members can use the training as an opportunity for professional growth. 
   
• Low Project Manager Influence: Depending on the company’s structure, project managers might lose influence and some decision-making authority in a PPM system. This is also true of departments as a whole.
  
  However, this doesn’t happen in all companies, and it can pay to listen to your project managers and give them authority.
  
  Zucker gives this example from personal experience: “At one point in my career, I managed an organization with 175 project managers,” he says. “I recognized that there was no way I could keep track of the 150 or so projects that were in process at any given time, so I told my managers that they were responsible for each of their portfolios. I only asked that they let me know before a project went sideways so that we could collaborate on the solution. I was there to support them. And it worked great.”
   
• Executive Micromanagement: PPM tools and dashboard metrics can lead to centralized decision-making and micromanagement. Ground rules are necessary to delineate who has decision-making authority. 
  
  “The PPM tools, metrics, and reports only tell a small part of the story,” Zucker says. “To understand how a project is performing, you need to talk to the team to understand what is happening on the ground.”
  
  He gives this example of micromanagement: “I worked for a vice president who was a micromanager. He would read the 300-page report that came out of the PPM system each week. That was a huge waste of his time. He should have created an environment where people felt comfortable raising issues and concerns directly to him.” 
   
• Overcomplication: PPM may be too complex for smaller businesses with fewer projects. However, PPM practices might help with strategic alignment, even in small businesses. 
  
  “Like any project, potential benefits need to be evaluated against the cost; project portfolio management will not work in every scenario,” Richter says. “If you’re struggling to align functional teams with larger strategic goals, PPM can be a powerful tool to transform the way you work.”
   

To overcome any of these PPM challenges, start with structure and transparency. For a deeper look at solutions, see our guide to successful project and portfolio management. You’ll learn to take stock of the work already in progress and establish processes for managing your resources and incoming requests.