Posted by Elizabeth Harrin
You’ve mastered project management and program management. The next thing to get to grips with is portfolio management. “A Portfolio gets its name from a case used for carrying documents such as maps, photographs, or drawings,” write Pat Durbin and Terry Doerscher in their book Taming Change with Portfolio Management. “In a business management context, a portfolio allows you to group a set of common subjects, like products, projects, or resources, so they can be collectively managed.”
Being able to group projects and programs together means you can then make decisions about them – decisions that can affect budgets or staffing levels for the work required, as well as which areas to focus effort on to meet the company’s strategic objectives.
Portfolio management is the way in which you manage and make decisions about groups of projects and programs. It’s a strategic role – but if you don’t think your project sponsors have got their heads around it, ask the PMO to get them a copy of An Executive Guide to Portfolio Management, which has just been released by the OGC.
Project portfolio management provides the opportunity to look at projects and programs and work out where to make investment decisions. You should be able to take the company’s overall strategic objectives and map these back through the different levels to any given project task – portfolio management provides a structure to be able to do that. Typically, project portfolio management looks at how projects are resourced and costed, which provides executives with data around project teams, budgets and expenses on projects, and the project and program deliverables.
You could keep track of your portfolio in something like Seavus Project Planner, but many companies opt for more sophisticated portfolio management tools. If you are in a small company with only a few projects and maybe one or two larger programs, you may find that portfolio management is too unwieldy to add much value. It tends to work better with companies with large resource pools, as it can help avoid duplication and will ensure that effort is focused on the most effective solutions.
Even with a small group of projects or programs, you can still apply some of the fundamentals that underpin portfolio management:
- Make decisions based on data, and have a clear decision making process.
- Make sure the outcomes of decisions are communicated and are understood at all levels within the project organisation, as well as the reasons behind those decisions.
- Be transparent – make sure that decisions tie back to business objectives.
Ultimately, the purpose of portfolio management is to get consistent decision making across the organisation that ensures a focus on the right projects at the right time. It’s particularly useful in making investment decisions. Where are you going to spend all that money? Make sure it goes to the right projects. Unsuccessful initiatives are stopped; project teams work on what is going to provide the most value for the company. And everyone understands why they are doing what they are doing.
Tags: benefits, change management, executive, Goals, objectives, portfolio management, Program management, project management, Resources, value