Guiding Principles of Portfolio Management
The Standard for Portfolio Management – Fourth Edition (2017), published by PMI, lists the following principles:
These principles provide guidance for portfolio managers in creating, establishing, implementing, and managing portfolios.
"By creating strong links between strategic planning and strategic business execution, organizations can achieve greater organizational performance while improving resource utilization, exploiting new opportunities, and minimizing threats." (PMI)
After you have read the content for this week, think about what types of project portfolios are used by companies you know of or you are interested in. Then, perform a web search to find examples of project portfolios used by companies.
Choose one that interests you and provide a link (if available), then summarize the key points. If you can, add a few comments about the project portfolio from what you have learned in this course.
Facilitates: Decision Making and Prioritization Decision Making Based On:
Perceived opportunity & acceptable risk
Prioritization Based On:
Opportunity
Cost, Risk, Strategic Fit & Portfolio Balance
Executive Management pressure
Project Portfolio Management
Benefits: Efficiency
Recognizes business strategy & scarce resources
“How all company projects fit together”
Facilitates focus on strategic decisions
Portfolios as unified assets – both multiple and shared objectives = efficiency
AVOIDS: Managing project as independent entities
Structure: Collection of Projects and Programs
Manage projects under umbrella
Range of structures From 1 Portfolio for the Company
To multiple portfolios by Line of Business, Products or as Investments
Focus on enterprise success when creating portfolios
Build discipline into project selection process Links project selection to strategy
Prioritizes project proposals using common criteria (not politics or emotion)
Allocates project resources based on strategy Balance risk across all projects
Justifies cancelling projects that don’t fit strategy Improves communication & agreement on project goals
Monitor & adjust project selection criteria to fit strategic focus of organization
Small organization – managed by small group of key employees
Large organization – managed by project office
Priority team balances by risk, type and resource demand
Risks to organization or project
Provides perspective on organization