The Money Files

What does it mean to manage a portfolio? And what does portfolio management look like? For most of my career I have been involved with IT portfolios that were a blend of business-led projects and operational work. However, portfolios can be department-based, geography-based, customer-based or whole-company, or even another split. Basically, a portfolio is just a way to group work to make it easier to manage, monitor and control.

I think there are 6 main responsibilities for a portfolio management team. I’m sure there are more, but these are the main things that I feel form the priority To Do list for people in that role. The 6 features that make up portfolio management are below.

1. Assessing ideas for projects

Ideas for projects can come from anywhere, but often they come from people already working within the organisation, who are involved in projects somehow. For example, project or product teams could be working on one initiative, receive a change request, and realise that would make a great addition to scope, even if it cannot be incorporated into the project right now.

The portfolio team should be on the look out for relevant project suggestions, making it easy for people to put forward new ideas. Then they should review and assess suggestions. That list then feeds into the next key feature of portfolio management: deciding which projects to do.

2. Prioritising projects

Next, we have prioritisation. Part of the role of the portfolio team should be prioritising the order of projects and deciding when projects should start. Some lower priority projects might need to be started work if, in fact, they provide the infrastructure or enabling architecture for more important projects. The team should consider the whole portfolio and make choices based on that, as well as the relative priority of individual projects.

3. Strategic integration

Projects don’t exist in isolation, so although the portfolio team may have quite a lot of say over what gets done and when, based on the results of their assessment, there’s also a job required to align what project work is proposed with the rest of the business strategy. This draws on the ‘run the business/change the business’ approach, where some teams focus on delivering new stuff and others focus on keeping the business going. Either way, both ‘sides’ of the organisation should talk to each other.

The purpose of the alignment is to make sure the overall strategy can be delivered, but also to make sure risk management is carried out in a ‘whole company’ way. It’s no good having a risk-heavy portfolio if the operational side of the business is also falling on the side of taking chances. Overall, the organisation’s work should balance a risk profile that is acceptable to the leadership team. Perhaps they are OK with taking risky measures – I wouldn’t be though.

4. Governance

The whole point of using portfolio management techniques is to improve oversight and decision making – in other words, to put decent governance in place. That includes project steering groups or project boards (and the programme equivalent) as well as monitoring the delivery of the work inside the portfolio.

Monitoring and oversight might be a light touch or involve multiple layers of approvals, depending on the investment and method, and the consequences of decisions taken. It will help to have some documentation here to spell out exactly what is required.

5. Tracking results

Yes, benefits tracking! Someone has to be responsible for tracking benefits, and the portfolio management team is in a good place to be able to do that at a portfolio level. You may have individual programme managers or department heads tracking benefits for their areas, but if you want to see the results at an organisational level, this data needs to be consolidated at the top. And de-duplicated, because you don’t want benefits to be counted twice (I’ve been there – it doesn’t look good).

6. Portfolio management processes

Finally, the portfolio management team is responsible for the management of the portfolio. I know, it sounds obvious to write that but someone has to be the gatekeeper and guardian of the processes, life cycles, review process, approvals, funding requests, paperwork and people. The day-to-day operation of the portfolio is also a key responsibility.

In your experience, what else do portfolio teams take responsibility for? What are the other key features of working in portfolio management? Let us know in the comments below!

In this video I look at 3 things you can do to help calm the overwhelm when the business seems to be changing around you more quickly than you can keep up!

I talk about making sure change management, risk management and day to day operations on projects go as smoothly as possible, freeing you up to cope with whatever project-related changes are being thrown your way.

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In this video, I look at the hidden cost of project changes.

Don't you just hate change control?  According to a study by Jama Software, 75% of project managers are managing projects with at least 100 requirements.  One in five are managing projects with over 1,000 requirements.  That's a big project.  Here's a summary of the rest of their findings:

Download the full report here.