IT Best PracticesIT GovernanceProject Portfolio Management

7 Factors to Align Portfolio Management with Strategy

Whether it is Risk, Civilization, or just some free phone app, anyone who has played a game about resource management can appreciate the importance of portfolio management. Every initiative must have a clear and palpable effect on the bottom line if it is to be a good use of resources. In a post for Voices on Project Management, Jen L. Skrabak outlines seven factors that connect portfolio and strategy:

  1. Agility
  2. Culture, change management, and communications (the “three C’s”)
  3. Governance
  4. Value
  5. Risk management
  6. Portfolio, program, and project management (PPPM) maturity
  7. Organizational structure

Play to Win

Portfolio management is never a static affair. It must be handled nimbly and with an eye on internal and external changes that warrant a response. And about the three C’s, Skrabak says this:

The “triple threat” of portfolio management is having all three components work in harmony to enable the strategy. Culture can be thought of as the personality and habits that an organization embodies, and although it may be difficult to describe, it can be seen and felt when walking around an organization. It’s been commonly cited that up to 97 percent of the employees in an organization don’t understand the strategy, and over 90 percent of mergers and acquisitions fail due to culture clashes.

Portfolio management operates within the sea of governance. And in this case, good governance consists of leadership oversight, control via using KPIs as leading indicators, and competent decision-making of employees up and down the chain. When discussing the value of portfolio management, the overall effectiveness of the process should be how value is measured. For instance, a couple great ROIs on isolated projects does not mean so much if myriad other projects are not meeting expectations. Skrabak describes value as “performance x risk / opportunity.”

Overall PPPM maturity meanwhile is measured by factors such as speed to market and customer satisfaction. To facilitate all actions regarding the portfolio, the organization should be structured with end-to-end processes in mind and cut into logical verticals. Add all of that up and you have healthy portfolio management.

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