Project Portfolio Management

What is a Portfolio?

A portfolio is a number of ‘strands’ of business being delivered by a common group of resources or a single business unit. The pool of resources may be involved in both non-recurring (e.g. projects) and recurring activities (e.g. business-as-usual). Portfolios can therefore be made up of a combination of:

• Projects & Programmes, and

• Business As Usual (BAU) or Operations

What is Portfolio Management and why is it necessary?

Business projects and programmes are often delivered by resources that share other responsibilities alongside their project duties. In addition, multiple projects may compete for resource from a common resource pool or organisation.

Portfolio Management is the periodic review, direction and allocation of priorities across the Portfolio, 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 within the portfolio of projects and programmes

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

• Conditions and circumstances change very rapidly

• Project and programmes, which consume large amounts of corporate resources, require a more frequent strategic review.

How does Project Portfolio Management work?

It is a periodic process to confirm and update the 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 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 Portfolio Management require?

The Process should have input or representation from:

• Strategic planning

• Relevant business stakeholders

• The Board

• Project and Programme Management and Sponsorship.

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 Management

• Enterprise Risk Management

• Project and Programme Risk Management

Benefits of Portfolio Management

There are a number of very sound Business reasons for carrying out Portfolio Management:

• Good Corporate and Project Governance: use of Corporate Resource and Management of Performance against Strategic Objectives

• Improved business performance through better communication of priorities based on better projection of the benefits that individual programmes and projects will deliver

• Remove the ‘he who shouts loudest’ syndrome

• Bring considerable control to the business - in particular projects / programmes

• Reinforce (provide the 'pull’ for) key processes that are required to input into Portfolio Management (e.g. project management)

Executive Presentation: Benefits of Portfolio Management

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 Portfolio Management.

Links, Downloads and References

For more information on Portfolio Management and related topics:

UK APM web site

OGC Programme Management

Related Pages

Further Project Management Training Courses from PMIS

About PMIS:

PMIS is a leading specialist provider of project management training, Prince2 training, APMP training course, project risk management training, benefits realisation training. Whether you are looking for public or tailored project management training, PMIS provides first-class earned value training, project management courses, IT project management training, and project manager certification.