Portfolio Management
Definition
"Ensure that the organization has the right mix of programmes, projects, products, and services to execute the organization's strategy within its funding and resource constraints."
The practice must accomplish two primary objectives:
- Ensure sound investment decisions for programmes, projects, products, and services within the organization's resource constraints
- Ensure the continual monitoring, review, and optimization of the organization's portfolios
Key Terms
Portfolio: "a collection of assets into which an organization chooses to invest its resources in order to achieve the best return."
Processes
Managing the Organization's Approach to Portfolios
- Analyse the organization's strategy and resources
- Develop and agree the portfolio management approach
- Develop and agree the portfolio management guidelines for different portfolio groups and categories
- Communicate the portfolio management approach and guidelines to key stakeholder groups
- Review and adjust the portfolio management approach and guidelines
Managing the Portfolio Lifecycles
- Portfolio planning
- Portfolio monitoring
- Portfolio review
Key Metrics
| Metric | What it measures |
|---|---|
| ROI: planned vs. actual | Investment effectiveness |
| Stakeholder satisfaction with portfolios | Perceived value |
| Strategic decisions supported by portfolios | Strategic alignment |
| Portfolio review schedule adherence | Governance discipline |
| Dynamics of portfolio effectiveness | Trend analysis |
| Satisfaction with portfolio communications | Communication quality |
| Incorrect portfolio decisions | Decision quality |
Key Roles
- Portfolio manager
- Portfolio owner
- Portfolio coordinator
Recommendations for Success
- Agree the highest level of portfolio management in the organization
- Align the portfolios to strategic objectives and ensure clear definitions of value
- Make portfolio expectations clear and track progress at all relevant levels
- Define a clear and easy-to-follow process for portfolio item acceptance
Relationships to Other Practices
| Related Practice | Interaction |
|---|---|
| Strategy Management | Portfolio decisions flow from strategic direction |
| Financial Management | Portfolio analysis requires cost and ROI data |
| Risk Management | Each portfolio item carries risks that must be assessed |
| Project Management | Projects are portfolio items; project status feeds portfolio reviews |
| Architecture Management | Technology portfolio aligns with architecture roadmap |
Software Tools
- Analysis and reporting tools
- Collaboration and communication tools
- Enterprise architecture management tools
- Financial management systems
- Knowledge and document management tools
- Workflow and task management tools