The Fourth Edition of “A Guide to the Project Management Body of Knowledge” (PMBOK) defines a portfolio as “a collection of projects or programs and other work that are grouped together to meet strategic business objectives. The project or programs of the portfolio may not necessarily be interdependent or directly related. “1 Unless an organization is inactive, it would be hard to find a for-profit or non-profit organization that does not have a portfolio of work they need to perform in order to achieve their strategic or tactical objectives.
The PMBOK further defines Portfolio Management as “the centralized management of one of more portfolios, which includes identifying, prioritizing, authorizing, managing, and controlling projects, programs and other related work, to achieve specific strategic business objectives. Portfolio management focuses on ensuring projects and programs are reviewed to prioritize resource allocation and that the management of that portfolio is consistent with and aligned to organizational strategies.”1
With this as background, organizations should think about the following with respect to portfolio management:
1. Assign the role of portfolio management
2. Establish a framework to support project prioritization and resource allocation
3. Incorporate resource development as part of the portfolio management framework
Assign the role of portfolio management
As stated earlier, almost without exception, active organizations have a portfolio of work that needs to be performed by the organization’s team in order to achieve the strategic needs of the organization. In larger organizations, multiple resources should be assigned to this role. This should be an area of competence. In smaller organizations, this may be a single full-time (or part-time) resource. In a small business with a single employee, this role is owned by the small business owner. In either case, this needs to be an area of focus for the organization.
Establish a framework to support project prioritization and resource allocation
Many organizations prioritize projects based on a senior leadership members’ “wish list.” In some cases the prioritized project list needs to include some of these items. In many cases, organizational resources find themselves ‘thrashing about’ changing from focus area to focus area. This often results in never really accomplishing anything significant and frequently sub-optimizing their returns on investment. Consider establishing a framework, a set of repeatable integrated processes, that allows an organization to assess, prioritize and allocate resources quickly to achieve an organization’s strategic objectives.
Incorporate resource development as part of the portfolio management framework
One of the benefits of a sound portfolio management framework is the ability to track and forecast. Forecast your resource needs at a point in the future. If done well, the leadership team can begin to assess what skills will be needed six months or more in the future. Being armed with this information, the leadership team can ensure specific development plans are in place for their teams so that projects are not delayed because of the lack of skilled resources.
As you go into your fall planning process, ask yourself, if your organization is maximizing their return on investment by having the right portfolio management framework in place to excel during these turbulent times? If not, determine why not and put the appropriate plans in place to address during the next 12 months.
1. A Guide to the Project Management Body of Knowledge . Project Management Institute. 2008. pp. 8 – 9