The New Dynamic of Portfolio Management

Innovative Methods and Tools for Rapid Results

Murali Kulathumani

• Publisher: J. Ross Publishing
• Year: 2021
• ISBN:
  9781604278279
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Gestión de proyectos

This bold new text approaches project portfolio management from a fresh new lens of delivering immediate value. In today's hyper-paced business climate, the need for portfolio management has grown exponentially but the time to deliver results has dramatically shortened. This book recognizes that and explains how an impactful portfolio is attainable using a back-to-basics approach. It also walks readers through the actual implementation of each portfolio component using a popular platform called Smartsheet. Whether you already have a project portfolio, or are starting to build a portfolio from scratch, this breakthrough book will show you how to obtain a high-performing project portfolio without investing in expensive tools. The New Dynamic of Portfolio Management recognizes the need of a huge number of organizations for a simple, yet advanced portfolio that can be scaled based on your starting point. Every section of this practical desk reference provides guidance for getting your portfolio up and running quickly to achieve immediate results. It also presents a detailed look at successful portfolio governance; explores the important relationship between the portfolio office, CIO, and finance department; and supplies effective funding strategies for project portfolios. Key Features: Sequentially covers the essential capabilities of an effective portfolio and provides a logical construct of how the different capability areas interactProvides a complete understanding of all the building blocks of a portfolio, the critical success factors needed to achieve desired results, and the nuances involved in implementing themExplains how to effectively monitor and manage the performance of a portfolio, including balancing a portfolio, benefits realization, and annual planningAddresses problems portfolio managers often face when trying to roll out capability enhancements in their organizations

SECTION II

Implementing the Basic Portfolio

SECTION II INTRODUCTION: THE BASIC PORTFOLIO

WHAT IS A BASIC PORTFOLIO?

Every organization needs to start somewhere in their portfolio journey. There are some aspects of portfolio discipline that are easy to attain and some that need an advanced level of capability. Up to this point in the book, we have discussed the need for a portfolio, and this section is aimed at organizations that understand this and have just started their portfolio journey.

In other words, this is where organizations should start if they are looking to build a basic portfolio and get to Level 1. Although the term basic creates an impression of limited, we need to remember that most organizations are currently way below basic, so a basic portfolio would be a major upgrade compared to where they are now. A basic portfolio will add many useful capabilities to organizations that have nothing in place currently.

What is a basic portfolio? It is a portfolio that primarily deals with four foundational capabilities that are key to gaining control of organizational projects:

1. Controlling the intake of projects into the portfolio

2. Reporting on the state of the projects in the portfolio

3. Understanding and managing how resources are deployed in the portfolio

4. Managing the activity of annual planning

In the next seven chapters, we examine what goes into the making of a basic portfolio. The chapters typically start with a discussion of each of the capabilities listed above and then go on to explain how to implement these capabilities using Smartsheet. After implementing a basic portfolio, the organization is capable of understanding and controlling what projects are being worked on and how to deliver optimal value to stakeholders.

4

PORTFOLIO INTAKE AND ASSESSMENT

INTRODUCTION

Portfolio intake is the process of regulating the work that enters the portfolio. It is vital to get this working correctly because the portfolio should be considering proposals aligned with the strategic direction of the portfolio (i.e., “meaningful stuff”) and not wasting precious resources on misaligned proposals (i.e., “stuff no one really wants but we’re doing anyway”). However, speed is also important here—we want a way to quickly decide if we want to work on a project or put it on the back burner. In this chapter, we will learn about the following aspects of portfolio intake management:

1. Describe portfolio intake

2. Explain the need to gather project details during portfolio intake

3. State the characteristics of a high-performing project intake process

4. Specify the two types of portfolios and detail how the portfolio intake will work for each

5. Explain some challenges and best practices that work in almost every situation

The goal is to have robust intake management while keeping the portfolio nimble and responsive.

KEY CONCEPT: Portfolio intake is possibly the single most important starting point in setting up a portfolio that delivers value.

WHAT IS PORTFOLIO INTAKE?

If there’s one constant in the workplace it’s that there will always be more requests than there are resources to fulfill them. There’s always a ton of projects that need to be done, but with our limited resources (people and/or money), we can’t do them all. Therefore, we need to focus on which projects we will do and which we’ll politely refuse. This process of managing the incoming requests and selecting what we work on is called portfolio intake (i.e., demand management). Portfolio intake controls what gets into the portfolio.

KEY CONCEPT: Portfolio intake is the process of controlling which projects get into the portfolio.

Here are some broad factors to think about when creating and managing the intake process:

• Strategic fit: “Does this even belong in this portfolio?” Some project requests simply don’t belong. It’s best to screen them out at the intake stage.
• Resources needed: “What will it take to do this project?” Before we start on a project, we need to know what resources it will take. At a minimum, it needs to be tagged as small, medium, or large.
• Customer: “Who is the customer?” Capture which department or organization we’re doing this for.
• Estimated start date: “When do we expect this project to start?” Know when we expect to work on this project.
• Estimated finish date: “When do we expect this project to finish?” Know when we expect to deliver value.
• Goal alignment: “Which goals will be moved forward by doing this project?” It is vital to know what capabilities this project will add to our strategic roadmap.
• Benefits: “What is the ROI?” Are the benefits soft (e.g., productivity savings) or hard (e.g., revenue growth, actual cost reduction, etc.)? Know exactly what value will be added to the enterprise by doing this project.

These are the minimum suggested set of fields to have. Based on your organization’s needs, you can have more if required.

KEY CONCEPT: The above listed fields are the minimum needed for an effective portfolio intake.

WHY GATHER ALL THESE DETAILS DURING PROJECT INTAKE?

You may encounter push back from your stakeholders for asking these questions before starting a project. That’s fairly common, but there are some good reasons why these attributes are gathered during project intake:

1. We only want to take up viable project proposals. A viable project proposal should have thought through all the above attributes and be ready to provide the answers.

2. If you don’t gather these data elements now, it’s very hard to get them later. Once a project starts, the stakeholders are quite reluctant to provide all the missing info.

3. By asking project proposals to provide this information, the portfolio manager can decide what the priority of this new request should be. That helps to determine when and how to commit resources to this new request.

KEY CONCEPT: Portfolio intake is the best time to collect basic details about each project.

CHARACTERISTICS OF A HIGH-PERFORMING PROJECT INTAKE PROCESS

No matter how you implement it, an ideal portfolio intake has the following characteristics:

• Efficient and responsive: Approval or non-approval should be expedited. A well-defined service level agreement (SLA) should be in place to make intake decisions. Don’t leave the requesters in limbo.
• Easy to use: The stakeholders should find it easy to submit a complete proposal. There should be resources and training that enable a stakeholder to know what to do when submitting a proposal. At the same time, only complete proposals should be submitted to the intake.
• Effective governance: All intake proposals should be reviewed by appropriate governance and quick decisions whether to approve or reject should be made. If there is no such governance body, the portfolio manager should be able to approve/deny projects.
• Fiscally responsible: Prior to approving a project, a governance body (or portfolio manager) should have a clear idea of what this does to the available portfolio f...