A portfolio approach. Portfolio Management takes project and program management to a whole new level. It’s where projects and programs are looked at in the round, alongside other critical business activity. It gives you the complete picture of organizational change and where your resources are being spent. Whether you run portfolio management at a departmental or functional level or across every part of the company, you can get incredible value and efficiencies from adopting it in your business.
A strategic Portfolio Management Office (often abbreviated to PMO – although just to be confusing you’ll also hear a Project Management Office being referred to as a PMO too) can offer organizational benefit from day one. Here are some of the value-adds that a portfolio approach can add to your company.
1. Portfolio Classification
Where are you spending most of your effort? In one company we know, the HR function was significantly underfunded for many years. Software was left to go stale, impeding efficiencies. The HR team were able to operate and functioned perfectly happily for this time, but a larger transformative change project highlighted their situation. Leaders were surprised that this situation had been left unchallenged, but the bottom line was that HR projects had been deprioritized over the years to the point that none were done.
A portfolio approach where projects are classified by owner or team would have highlighted the ongoing situation. The executives may still have decided that other projects took priority over the HR initiatives, but at least the lack of development in that area wouldn’t have been through lack of information; it would have been a conscious and informed decision.
Classifying your portfolio projects simply means aligning them to particular categories. You could do this by department to see where most of the funding and effort is going. You could align them against corporate strategic goals. You can cut the portfolio in a number of different ways to suit different purposes and the overarching benefit is that you can see at a glance if what is actually happening meets your expectation of where funding should be spent.
2. Dependency Management
The PMO can manage dependencies between projects and programs. This is where one initiative relies on another for an output, or has to complete something before another project can move forward.
There could also be dependencies on specialist resources or equipment where the company only has one or two items (or expert individuals) available and these have to be split between project teams.
Dependencies are difficult to uncover. Having centralized and standardized project management planning, rolled up by the PMO, can help you spot dependencies more easily.
Then the project managers can be informed and plans drawn up to ensure one project doesn’t come to a halt because another has not done what’s required.
3. Change Management
A change can have far-reaching effects and might impact other projects too. This isn’t always easy to spot for a project manager, or even a program manager.
The PMO is best placed to identify whether a change is going to have a knock-on implication for another program, or a strategic objective. It can then advise on how to approach the change and ensure everyone involved knows how to respond appropriately. This might involve challenging the change – do you really have to do it? Do you want to do it, now you know the full implications?
This can prevent problems being uncovered later.
4. Portfolio Planning
You don’t have to start every project on the day the business case is approved. Portfolio planning makes it possible to plan the pipeline of work and prioritize projects across the business. It also enables executives to choose which initiatives to pause for now so that higher priority projects can take their place.
Without a corporate (or at least department) level overview of the work on the go at the moment and in the pipeline, you can’t make those decisions.
Portfolio planning is also a huge value-add when it comes to resource planning. If you know you have critical business projects being delivered and more great ideas coming through, you can make informed decisions about whether to hire more specialist resources and project managers. Is it worth increasing your capacity in the short term or, if you juggled the work around a little, could you deliver it with the same resources?
These are the types of questions that portfolio planning can help answer.
Finally, the PMO act as a central hub for project, program and portfolio communications. This can ensure that communications are aligned and timed effectively. There’s no point bombarding one division in the business with communications about multiple projects – a holistic portfolio approach will let you time communications so that they will be better received and acted on.
Running point on communications – the big, significant messages, it wouldn’t be practical in most cases to run every project communication through the PMO – has the added advantage of making sure that execs know what is being communicated before it is sent out. The PMO can coordinate the appropriate approvals before communications are issued, ensuring everyone is aware of what is going on.
A portfolio management approach adds so much value to organizations. The level of information available for decision making and reporting is significantly different to managing a project and program level. The step change can be transformative for businesses, enabling them to deliver faster, and deliver more without increasing resources.
Moving to portfolio management and creating a PMO with portfolio responsibilities will empower your teams to do more, more effectively.