Pages: 11

This chapter explores the origins of project portfolios in an attempt to explain current conceptions of a project portfolio and examines historical notions as well as the scientific literature to identify conceptual aspects associated with a project portfolio. It analyzes aspects that have stayed constant over time to gain further insight into what is a project portfolio and also examines aspects that have developed and been elaborated over time. A ministerial portfolio has an equivalence to a political organization similar to the manner in which a project portfolio represents a business organization. Also, both sense the external environment and reconfigure their composition in response to what they sense. A project portfolio is aligned with “business objectives, combining performances of its components in order to maximize the shareholder’s value while balancing resource allocation and risks”.

Pages: 14

This chapter evaluates, at a high level, the integration of the corporation’s focus, the role of various departments involved, and techniques to plan, design, and launch the new product. For large corporations, the marketing group plays a large role in the strategic planning process. This is because marketing is concerned with industry trends, customer preferences, competitor analysis, and with developing promotions to keep the company’s brand alive and relevant. The principles of project management can be utilized to ensure that strategic initiatives are planned and implemented within budget, schedule, and quality parameters. To a large degree, project plans are very similar to the key components of a strategic plan. However, new project management techniques have been developed for software. Many companies have shifted to an “Agile” design philosophy whereby a product is developed using mini projects with a different approach to the product’s development.

Pages: 9

For a majority of practitioners, the portfolio that they work on is existing with expected goals and objectives to demonstrate portfolio value. Creating a new portfolio requires some additional steps and direction to ensure future success. There are four general areas of focus within the portfolio management space: strategic alignment, governance, execution/delivery, and methods/tools. Before any of this can happen, there has to be consensus regarding the need for change. One of the most significant components of this portfolio’s creation is in the area of change management embedded into the design and delivery of the portfolio. Additionally, the culture and maturity of an organization dictate the design. There is no “perfect”’ governance model, methodology, or toolset as the right approach for each portfolio depends on its organization and culture along with the maturity of the team and the culture of project delivery. However designed, communicating value to stakeholders should be done using metrics for both tangible and intangible value to the organization. As management guru Peter Drucker famously put it, “If you can’t measure it, you can’t manage it.”

Pages: 22

The essence of portfolio management is decision-making defined as “the act or process of deciding something especially with a group of people”. The organization needs to decide what projects, programs, and other initiatives to invest in, delay, defer, terminate, change, or modify to meet its strategic objectives. And, it needs to make these decisions in accordance with a structured and systematic, yet not overly rigid, set of rules and criteria. To get “out of the gate” quickly, an organization needs to establish a Governance Model, the “control room” of the portfolio management process. This chapter identifies the six key questions organizations need to answer to establish the Governance Model: What is our purpose and what portfolios will we manage? Who will manage the portfolio? How will projects be selected for the portfolio? How will we make decisions and resolve conflicts as a Portfolio Committee? How often will we meet and what rules will govern our meetings? What will be the role of the PMO in portfolio management?

Pages: 21

Project portfolio governance is a critical capability in the best of times. With a firm foundation, ongoing governance and oversight enable projects and programs to proceed down the path to arrive at the strategic destination. The intention of portfolio governance is to facilitate strategic decision-making that will enable delivery of strategic goals and objectives. There are two sides to portfolio governance – a component side and an internal side. The governance framework should consist of definitions which guide strategic alignment, financial adherence, risk appetite, and resource requirements. Additionally, governance should be “right-sized” or tiered which means to have varying requirements based on the expenditure as well as the level of risk, impact, and complexity. These are among the many concepts governance concepts that are the embodiment of the famous quote “Work smarter, not harder”.

Pages: 24

This chapter focuses on the importance of communication by those responsible for the portfolio. The governance team and the stakeholders are responsible for communicating with those involved in portfolio management. Decision-making requires various forms of communication and in-depth conversations. The portfolio manager must synthesize the information from the governance, leadership, portfolio, and project managers. Then the data is analyzed as to how it affects the portfolio. Listening will help each member grasp if they are communicating effectively. Trust in a relationship goes both ways. Trust is easier to maintain than recover once broken. Project portfolio management is a relationship on many levels. The portfolio team needs to trust one another and the portfolio manager. The portfolio manager who supports the team will establish trust. Communication is essential with strategy. The portfolio manager communicates findings to achieve the strategic goals upon a final decision. Technology, seldom, if ever, is the answer to communication problems. It is up to each portfolio manager to stay current with changes, whether technology, agile, more accurately selecting projects to meet strategy, or many other developments. No matter what area is updated, communication will be central to all areas of portfolio management.

Pages: 33

Portfolio management is focused on the achievement of the organisational strategies and objectives. The implementation of organisational strategies and objectives might take anything from months to years. The discipline of portfolio management owes its origins to a seminal paper written in 1952, in which Harry Markowitz laid down the basis for the Modern Portfolio Theory (MPT). MPT allows determining the specific mix of investments generating the highest return for a given level of risk. The aim of portfolio management is to diversify investments in such a way that it reduces the total risk of a portfolio, but this must be done in an effective way and manner. In the realm of portfolio management, the aim is to optimise the total financial value of all the projects within a portfolio, but at the same time, risk exposure should be minimised. Organisations must create the functional structures that own and provide portfolio management.

Pages: 19

This chapter defines the concepts involved and how portfolio management and communication, including collaboration aspects, have evolved during the last decades both from a process and an enabler standpoint including a review of some of the literature in the field. It describes the importance of communication to strategic portfolio management. Beside formal and informal lateral communication, the portfolio management ecosystem combines upward and downward communication. Since portfolio management provides key capabilities for achievement of an organization’s strategy, there may be a major focus at the executive level both to assemble and to communicate detailed information on the progress of major objectives and impacts of the components, as well as any changes to previously communicated plans. The strategic portfolio management system put in place must ensure that every project aligns with organization’s goals and objectives by standardizing project requests; quickly validate, align, and prioritize projects in portfolios; and make the right decisions on trusted data.

Pages: 12

This chapter focuses on the importance of communication by those responsible for the portfolio and discusses the various communication paths needed in Project Portfolio Management (PPM). Stakeholders are treated differently depending on where they fall within the portfolio. Portfolio managers need to ensure that communications are all relevant to strategy and the differences in communicating to senior executives, the portfolio team and project managers. To deliver the portfolio, a successful set of projects, programs, and operations is imperative. The portfolio team initially selects the projects considering cost, risk, benefits realization, and resources. Artificial intelligence may be a significant source of information for the portfolio. Disruptive technologies, such as artificial intelligence, can provide data from throughout the company that must be instituted in the portfolio and project software. Portfolio management continues to evolve the practice. It is up to each portfolio manager to stay current with changes, whether technology, agile, more accurately selecting projects to meet strategy, or many other developments.

Pages: 31

Management of the relationships between the organization and the many stakeholders who can affect or who are affected by the work of delivering projects, programmes and portfolios for organizational value is complicated and complex. It is exacerbated by uncertainty that afflicts us all. In a post-pandemic world, understanding how best to manage in the aftermath of lockdowns, illness and death requires innovation and flexibility and also a recognitions of the nature of uncertainty and the importance of effective communication. Uncertainty is with us always – we can make plans, but we cannot foresee the future, and we cannot control the future. Within organizations, a wilful blindness to the true effects of uncertainty means that risk management is often a box-ticking exercise. The focus of this chapter is the landscape of the Zone of Uncertainty which illustrates what really occurs between the optimistic strategies devised at executive level and the reality of delivering the programme or project. Without understanding and agreement of the risks and how to manage them throughout all levels of the organization, the disappointment and chaos of unfulfilled expectations will continue. The purpose of this chapter is to describe the Zone of Uncertainty and try to identify the nature of the complexity and complications that may occur within the Zone. A review of the practices outlined in this chapter will improve the understanding of stakeholders and their expectations, and coupled with appropriate controls and reports on inconsistencies between the plan and its implementation will benefit organizations through ensuring the delivery of value to the organization in the face of the diverse expectations of important stakeholders. The key message is that it is the people (stakeholders) who are the drivers of portfolio, programme or project success or the obstacles to that success. Planning and control of programmes and projects are essential tools that assist in that process.

Pages: 25

An ever-increasing number of projects mobilize agile practices, bringing a need to scale agile for a greater number of projects. This brings specific challenges for larger organizations relying on traditional portfolio management processes. This chapter aims at a better understanding of agile portfolio management, a topic that has started gaining some interest in literature but remains to be further explored in practice. This chapter proposes four key goals (strategic direction, value maximization, balance portfolio, portfolio performance) and an overarching mechanism (governance) of portfolio management. It explores what these mean both for traditional and agile portfolio management. It delves more specifically into SAFe, a widespread framework for scaling agile. It presents how the key goals of portfolio management are achieved in this framework and then investigates a concrete implementation of SAFe in practice. Finally, it suggests avenues of investigation for the study of agile portfolio management.

Pages: 18

In dynamic environments, organizations must adapt to succeed. In project-based organizations, project portfolio management (PPM) can act as a dynamic capability, a strategic capability that provides competitive advantage by enabling an organization to effectively respond to change. PPM is an important organizational capability that enables organizations to manage and balance their portfolio holistically; to align projects with strategy; and to ensure adequate resourcing for projects to maximize the benefits from project investments. A dynamic PPM capability boosts organizational agility and flexibility by facilitating adjustments to the project portfolio and reallocating resources in response to changes in the environment. To remain relevant in a dynamic environment, the PPM capability itself must evolve. Examples of aspects of PPM that provide dynamic capability are outlined in this chapter to provide guidance for practitioners.