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Project Portfolio Management: An Overview

Portfolio Management: its role in business

What is a Portfolio?

A portfolio is simply a collection of projects (and usually programmes) being delivered by a common group of resources (people) or a single business unit. Projects within the Portfolio can be stand-alone or can be part of a programme. The resources responsible for delivering Portfolios can therefore be simultaneously involved in:

  • Projects & Programmes, and
  • Business As Usual (BAU) or Operations

What is it and why is it useful?

Such activities are often delivered by resources who share other responsibilities alongside their project duties. In addition, managers will compete for resources from a common resource pool or organisation. In many circumstances, ‘he who shouts loudest’ determines who gets resources when they need them.

Portfolio Management looks to reverse this by conducting a periodic review deciding and communicating priorities, taking into account:

  • The strategy and objectives of the Business Unit or Organisation
  • Changes in internal or external conditions (e.g. Market, regulatory)
  • Business Performance
  • The status, planned benefits and risks and issues across the projects and programmes.

An indication of success of this process could be stopping some projects, either shelving them or canceling them completely. It is not uncommon for organisation to have no clear picture of the full range of projects being undertaken at any one time, and when this is produced, the right decision is to halt or even cancel a number of projects. Just think of how many times you can actually recall that happening for the right reasons in your business?

Typically, businesses set objectives and targets on an annual basis, for a given time window. However, two things make it necessary to conduct such reviews more frequently:

  • Conditions and circumstances change very rapidly
  • Project and programmes, which require and consume large amounts of corporate resources, require a more frequent review and direction.

How does it work?

Project Portfolio Managment

It is a periodic process to confirm and update resource, project and programme priorities across the organisation. The most important areas of focus should be on projects and programmes, as these will always have the greatest issues in relation to resources, and have the biggest ability to provide unforeseen surprises of significant consequence.

They also need to be reviewed to ensure:

  • Continued alignment with current conditions and the businesses strategic objectives.
  • Their priority is reflected in the performance of the project, and visa-versa.

It can also provide an opportunity to confirm the need for individual projects or otherwise. It should not be seen however, as a duplication of the annual (or equivalent) Business Planning process. It is a much more focused sub-set of this activity.

Who does it and what does it require?

The Process can have input or representation from:

  • Strategic planning
  • Relevant business stakeholders
  • The Board
  • Project and Programme Sponsors.

The key processes that will provide the required inputs will be:

  • Strategic Planning
  • Operations and Financial Plans and Performance
  • Project and Programme Planning
  • Benefits Planning and Realisation
  • Enterprise Risk Analysis
  • Project and Programme Risk Analysis

What are the Benefits?

There are a number of very sound Business reasons for carrying out this process on a regular basis:

  • Good Governance: effective use of Corporate Resource and Performance against Strategic Objectives
  • Improved business performance through better communication of priorities based on better projection of the benefits that individual programmes will deliver
  • Remove the ‘he who shouts loudest’ syndrome
  • Bring control to the business – in particular to activities delivering the future “fruits” of the organisation
  • Reinforce (provide the ‘pull’ for) key processes that are required to input into Portfolio Management.

Agile Portfolio Management

The process should be as simple as possible but still contain discipline and rigor.  We prove this is very achievable within our course on this subject.

Executive Presentation:

PMIS has an Executive Overview of: Benefits of Portfolio Management and would be happy to work with you to deliver this to your organisation.

Email today to find out more on the above.

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