In part 1 we learnt about the key principles to be applied in adopting portfolio management and we eluded to the importance of appointing a Portfolio Director.
The Portfolio Directors first task at hand will be to develop a Portfolio Strategy and Delivery Plan, which is best achieved by driving a sequential Portfolio Definition cycle and adopting the following key practices:
· Understand what makes up the current portfolio, development pipeline, performance to date and forecast of benefits realisation,
· Categorise the major change initiatives into groupings or segments to clarify their alignment and contribution to strategic objectives,
· Prioritise the change investments based on cost-benefit or multi-criteria analysis to ensure optimised risk/ reward return,
· Balance the allocation of resources, risk and returns across the prioritised change initiatives and strategic objectives,
· Plan a top-level overview of prioritised and balanced change initiatives for inclusion in the portfolio strategy and delivery plans.
Having completed the definition cycle thoroughly, the Portfolio Director is now in a good position to oversee the delivery of the portfolio on going. Successful management is achieved by the simultaneous deployment and adoption of the following key practices:
· Management Control achieved through defining and communicating the portfolio management processes, regularly reviewing progress against business cases at stage gates and general project and programme governance,
· Benefits Management to establish a consistent approach, review and tracking mechanism along with actual realisation after change initiatives close,
· Financial Management to ensure rigour of business cases and monitor spend against budget at individual initiative and portfolio levels,
· Risk Management to focus on portfolio level mitigation above individual initiative management and protect the organisation in pursuit of strategic objectives,
· Stakeholder Engagement, communications and feedback through a consistent approach applied across the portfolio to ensure collective buy-in and ownership for the change,
· Organisational Governance alignment to portfolio decision making through a portfolio direction group or investment committee, and
· Resource Management to ensure effective utilisation and alignment of people, skills, capability, facilities and equipment to attainment of strategic objectives.
Having defined and put in place the necessary practices to ensure delivery of the transformation change initiatives in service of the organisation strategy and goals, the Portfolio Director drives cross-organisation framework compliance through regular stakeholder engagement, adherence to governance and effective communications in support of an informed and energised workforce.
The benefits of deploying Portfolio Management in today’s organisations includes:
· Removal of redundant, duplicate and poorly performing programmes and projects,
· Improvement of coordination of existing functions and processes,
· Ensuring constrained resources are allocated to optimise strategic impact, coordinating delivery and maintaining strategic alignment,
· Focused investment in programmes and projects in the context of the current environmental conditions and better coordination of investment in programmes and projects, improving the management of risk and encouraging collaborative working, and
· Enhancing transparency, accountability and corporate governance.
Overall this ensures that the organisation is both ‘doing the right things’ and ‘doing things right’, dramatically increasing its chances of realising the vision and achieving its strategic goals in today’s turbulent and accelerating market place.