Eight Key Steps Toward Portfolio Management

Portfolio management has become one of the most confusing topics in project management but it’s really quite simple. A portfolio is nothing more than a collection of projects or programs that are either related or non-related; portfolio management is what we need to do to manage that collection of projects or programs.  Following are some of the steps that are critical to consider in managing multiple elements in a portfolio, and key words to remember in maintaining your edge as a portfolio manager. By keeping it simple it should eliminate any confusion you may have about portfolio management.

There are eight steps key to how portfolio management is undertaken:

#1 – Selection

An organization first selects and approves which projects go inside a portfolio. Typically, a portfolio exists to accomplish a specific business objective, so the criteria for selection must meet that objective.

#2 – Prioritization

After selection, projects and programs within the portfolio must be prioritized according to decisions, budgets, and resources.

#3 – Kick-Off

After selection and prioritization of a portfolio of projects or programs, they are kicked off and it’s back to managing and tracking them.

#4 – Management

Specifically, portfolio management is closely managing the time, cost, scope and resources of the projects or the programs so that the portfolio remains intact.

#5 – Reporting

Decide what reporting is needed, for whom and at what detail. What do you need to measure, track and report on along the way?

#6 – Communications

Communications is about keeping the portfolio stakeholders, teams and change control boards informed. We know from experience that priorities change, so communicating to everyone about the health and the wealth of the portfolio is necessary to make sure the portfolio does what it was designed for: to meet a specific business objective.

#7 – Key Words

In the effort of managing the health and the wealth of a portfolio, there are three important key words to remember: juggling, balance and awareness. If we are managing a portfolio, we are juggling multiple projects and in some cases, multiple programs which include multiple projects.  It’s important to stay balanced, to anticipate that things will be out of balance occasionally, and to manage and track that within the portfolio. It’s also critical to have awareness of all the moving parts within the portfolio and to manage them, as well as to know your environment and what causes ups and downs affecting the different variables in your portfolio.

#8 – Think

Think about a portfolio that you may be personally tied to, such as your own financial portfolio, and how the behaviors of different items affect the portfolio. Within a financial portfolio you have multiple elements:  stocks, bonds, cash reserves and Treasury bills (T-bills). As stocks are up bonds are down. If bonds are up stocks are down. Your cash reserves or T-bills are on hand just in case you need them for emergency, and you keep them in your portfolio to maintain its stability. So even though some assets go up and down, you have others that keep the portfolio stabilized and its health and wealth intact. The same goes for a portfolio of projects and programs.

Think of an art portfolio, and how it contains items based on preferences. The artist includes mediums or subjects that are his or her preference to work on, more favored for some reason. Maybe some are more fun than others, or some may be more profitable. The artist portfolio is based on preference of work desired.

Think of the business portfolio, and its focus on results. Sometimes projects in a business portfolio are chosen to expand business opportunities. Sometimes there are projects there that support the growth or development of the community. There may be projects there that meet federal regulations or guidelines critical to the company.

If we really think about what’s inside the portfolio it doesn’t sound as complex as we tend to make it. These are just some things to help clarify what portfolio management is, if you have a business portfolio and are managing all of the ups and downs and trying to stay stable.

If you found these tips from Jennifer Bridges, PMP (formerly, Jennifer Whitt) of value and are a PMP looking to earn PMI PDUs, you might be interested in her self-paced, downloadable courses at PDUs2Go.com.


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