Simply put, Project Portfolio Management (or just Portfolio Management for short), means overseeing a set of related projects or programs within an organization from conception to delivery. Just as program management refers to managing a set of projects, so too does portfolio management refer to managing a set of related programs.
Considering all of an enterprise’s related programs together has obvious advantages, although it can be challenging to do well. Since a common problem in companies is too many ongoing projects and programs, or too few resources, or both, portfolio management can help address those issues with its big-picture view.
Good portfolio management means that programs can be compared for relative progress and success, priorities can be adjusted to meet strategic goals, and resources can be shifted to maximize returns. The firm’s overall risk can better be assessed, rather than the individual risk presented by an individual program.
A portfolio manager (PM) could be a single individual. But since scopes are often large, the portfolio is usually managed by a team of leaders who regularly monitor ongoing efforts and vet new ones.
Finally, as organizations adapt to more agile and modern ways of working, the processes for managing the portfolio need to adjust as well. As trends like Agile Portfolio Management, Lean Portfolio Management, Portfolio Kanbans, and Portfolio Canvases become more commonplace, companies may benefit from bringing in consultants to train their people on the new ways of working.
That’s where MI-GSO | PCUBED comes in. We’ve been educating our clients for over 25 years on how to visualize and manage resource demand, implement a framework for Portfolio Management, and realize benefits across their portfolios.
Sometimes, people call something a “project” when they’re really talking about a program, and vice verse. A project aims for one specific, tangible good or service (otherwise known as a “deliverable”) as efficiently as possible. Programs, on the other hand, organize several related activities to deliver benefits over time. (PMI, 2010)
For example, the Apollo 11 mission was a project because it had a singular goal: land people on the moon. But, the Apollo program was, well, a program. It contained all of the research and experiments to get crews up to the lunar surface.
While it’s not always straightforward, equipping yourself with the right vocab will help you make informed decisions. It puts nebulous plans into a defined scope. One organization may need a project to achieve its goals, while another requires a program that rallies many team members together.
In short, a portfolio is the combination of projects, programs, and other work. By gathering everything together, PMs can effectively manage goals to meet strategic business objectives.
Just like with financial portfolios, project portfolio management is all about balance. Riskier projects or programs can be offset with more sure-to-succeed programs undertaken at the same time, so that the company’s overall risk remains manageable.
“Portfolio management is important today, because while we have lots of different methodologies around, portfolio aligns at the executive level. It helps executives and senior management, realize the benefits, and how they’re going to achieve their strategies, as well.”
Alf Raju, VP San Francisco Hub
Figuring out risks and rearranging people and funds could result in monumental cost savings. Those savings could then be used to grow the organization into something bigger and better.
Portfolios are not static. They are constantly evolving entities that must be updated with changing needs and priorities.
Successful portfolio management requires PMs to convince everyone why it’s important. However, getting anyone to change their habits is difficult. Knowing common barriers to adoption ahead of time can give you an idea of how to finally implement a portfolio management process.
Common barriers to adoption include:
Just like Apollo, the Artemis program is just that – a program. It’s just one of NASA’s countless efforts in space science.
One of the first tasks in Portfolio Management is to assemble a list of projects and programs currently in flight. A common pain point is not knowing all the projects that your resources are working on at a given time within the organization. By compiling a Portfolio Inventory, your management team will know all of the projects and programs currently underway. If you have a centralized Project Management Office (PMO), they can standardize data across all ongoing projects and all new requests so you’ll know where your projects are at. Better insights, better decisions.
Instead of choosing projects based on gut decisions, your organization will be able to establish a framework to select the right projects, not just the “pet” or special projects. This will allow you to achieve maximum value for your investment. To do so, you’ll need to set up key strategic drivers to objectively review those projects, including:
By employing an objective methodology when prioritizing the portfolio, you can stop current low-value or under-performing initiatives. You’ll be able to reallocate your resources to new, high-value investments. Without an approach, keeping up with today’s market is impossible. Make sure to select the right Project and Portfolio Management tools in order to make the efficient decisions that you need to be successful.
Portfolio Management is not a set-it-and-forget-it methodology. Task your centralized PMO with managing Portfolio Delivery and Benefits Realization to decrease execution risk, and improve your ability to achieve a return on your investments. Advanced portfolio models will allow you to maximize the return on your objectives while proactively mitigating risks.
By putting the right people, processes, and tools in place, like Portfolio Dashboards, your organization will confidently execute and deliver value through new initiatives. You will be able to better realize your strategy, as it is today, not last year because you have a centralized portfolio of projects and programs which are now objectively measured and prioritized to maximize strategic return.
Project management aids getting one deliverable across the finish line. Portfolio management can organize multiple efforts to achieve success over time. The firm’s overall risk can better be assessed, rather than the individual risk presented by an individual program. At the end of the day, the organization will be healthier and achieve whatever it sets out to do.
MI-GSO | PCUBED partnered with the General Motors (GM) Product Development organization to help structure and deliver a Global Business Transformation Program. The Product Life-cycle Management (PLM) program was focused on improving first time quality and reducing non-value added activities by streamlining business processes and improving systems integration across the full Product Development Life-cycle.
However, the existing PLM program was not delivering the expected value and therefore the overall success of the program was at risk.
MI-GSO | PCUBED conducted a Program Portfolio Diagnostic assessment based on our industry leading transformation model which enabled GM to quickly realign program deliverables and timing with stakeholder expectations across the organization. Recommendations from our assessment identified several roadblocks that needed resolution for GM to successfully deliver their PLM program:
MI-GSO | PCUBED’s disciplined program and portfolio management approach enabled GM to overcome the identified roadblocks and establish a roadmap for success. The overall benefits expected at program completion were determined to be much more significant than originally anticipated.
Leveraging the enhanced Portfolio Governance Framework and Program Delivery Processes, MI-GSO | PCUBED helped position GM for future success in delivering their portfolio of programs and projects. GM’s PLM governance council oversees the product development portfolio and the newly established PMO ensures successful delivery of programs and projects using a structured management approach.
“At first, we hired MI-GSO | PCUBED, then we built the solution together. I’m now the happy owner of a PLM PMO which sets the standard for everyone else.”
Staying competitive in the modern marketplace demands agility and precision. We help to guide you towards the right ideas, investing in the right projects, and effectively delivering to realize benefits.
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