The new year has arrived, and some senior managers may face the pressure of troubled projects. Which projects must be scaled down? Which should get more support? Which should be canceled because market conditions have changed? Portfolio management demands these kinds of tough decisions.
In the 2006 version of the James Bond film, "Casino Royale," for example, the character named M is responsible for managing military intelligence projects and programs. She has to make the best use of the resources under her governance, whether they are programs or projects. When one of her projects is out of control, she corrects the deviation by removing resources and support -- in this case, from Mr. Bond's personal revenge-oriented task -- because it may not align with the organizational objective.
In the meantime, she also has to define what each operation or action should achieve and in what way. Should it be an interception done secretly by the SWAT (special weapons and tactics) teams or a detainment in a sumptuous gambling casino? It all depends on what effects an action aims to achieve and at what costs.
The basis of portfolio management lies in its top-down logic. Depending on what objective you want to reach, you combine the resources and organize the projects and programs to move toward that direction.
When it comes to personal investments, people often combine different products and methods to gain the maximum benefit based on the risks and available financial resources.
Similarly, project portfolio managers consider the resources that should be allocated to projects and programs based on what risks and benefits they can generate for an organization.
Programs and projects sharing similar risks or benefits may be put together for better management. The grouping facilitates decisions on further investments and resource allocation, as well as adjustments amid changing market conditions and organizational strategic plans.
By following effective project portfolio management processes, you can put together a business operation that makes your investment objectives more achievable. Just like M -- but leave the SWAT team at home.