Getting started with Portfolio Management is typically quite easy. Essentially it’s all about reporting. But once this is in place, what next? It’s easy to lose momentum and get trapped in a weekly cycle of reporting.
To make sustainable progress on Portfolio Management you need identify how to add additional value from Portfolio Management. This way, you can make sustainable progress. You won’t lose momentum.
The first step in Portfolio Management is reporting. You gather all the various project, programmes and change initiatives together. This may take time, but it’s reasonably easy. If you are working at the enterprise level, your enterprise portfolio is the sum of all the approved, active change initiatives in your company. If there are a lot of initiatives, focus on the bigger ones. If you are working in a department such as I.T., your I.T. portfolio is the sum of all your approved, active I.T. initiatives, including those which support other departments.
This first step is typically fruitful, as it invites answers to several pertinent questions:
– what projects and programmes have been approved?
– are project and programmes well defined (are there overlapping projects? are some projects part of bigger programmes?)
– do you have wildcat projects?(unofficial, i.e. active but not actually approved)
– do you have zombie projects? (dormant, i.e. approved but not active)
– do you have straggler projects? (the project should have closed, but instead has drifted into maintenance or support work)
Reporting is the first step. What comes next? How to sustain momentum and avoid the trap of low-value repetitive reporting?
The way forward is to identify where your company needs to add value with Portfolio Management.
There are basically four ways to add extra value
1) Target the right projects, to generate value
❑ You choose to focus on the project approval process. You start to build a project prioritisation model, which is a decision support tool for choosing which projects to run. The model will help to build a balanced, achievable portfolio, aligned to your strategy
2) Help projects to deliver, to protect the value-adding process
❑ You choose to focus on tracking and monitoring projects. You ensure project inter-dependencies are managed. You work on resource bottlenecks. You highlight problems and push forward issue resolution.
3) Push for better performance, so more projects deliver well
❑ You choose to focus on project performance. You monitor actual performance against plan (on time? on budget? how good are the estimates?); and whether projects following your expected ways of working. Then you feed back lessons and drive improvements.
4) Follow up on business cases, to ensure real long-term value-for-money
❑ You focus on delivering value. You ensure all projects have a solid business case, which is reviewed before work starts, at key milestones, at closure – and most importantly in the weeks and months after closure, to ensure benefits are really sustained.
When you can identify where to add value, you have a goal. A destination. Once you understand your destination, you can plot the journey: your next next steps become clear.
An invaluable next step is to benefit from other people’s experience to guide your journey. For Portfolio Management, you now have guidance in the form of the MoP framework (Management of Portfolios) and the P3O guide (Portfolio, Programme and Project Offices). For example, the MoP guidance explains how to build a portfolio prioritisation model, while the P3O guidance explains how to to build a value proposition.They are interlinked – MoP helps you to define your destination, while P3O helps plan out the journey.
When you know your destination, when you have a plan for the journey, taking the next steps is easier…