Portfolio Capacity and Capability Assessment

Paul is the principal of Bird Advisory in Perth, Western Australia.

  Cost Management   Portfolio Management   Strategy  

On the sporting field, it’s often said, “Do not confuse ambition with capability.” Failure to do so is seen as arrogance and/or foolhardiness. But how well do we match our project portfolio ambitions with our ability to deliver? There are some considerations that a project organization should be assessing as it builds its annual budget and business plan.

Annual Budget & Beyond
Its usual for an enterprise to have an annual budget, with the project organization owning the capital plan. As a minimum, this should forecast the spend in the upcoming year, and—albeit with less precision—for some years beyond that.

Beyond the spend, it’s worth understanding the nature of the spend as that characterizes the resources required to implement it. This can be considered in terms of raw capacity (people) as well as capability (the skills and experience profile of those people). A solid plan will back up the budget and will define the work to be done—and the capacity and capability to deliver it.

Work Plan
At the budget stage, rules of thumb can help produce a top-down spend profile. You should be clear-sighted about the relationship between spend and duration, using your own history or published data. For early-stage projects that don’t yet have schedules and spend plans, a ¼, ½, ¼ spend in each third of …

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