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Portfolio Management Process – The Process for the Process
By Heather Champoux

Many organizations do not have a Portfolio Management process. In order to create a process where no process exists, the following steps must be taken:

Step 1: Define a Portfolio Management Organization Structure

To define a Portfolio Management organization structure you can ask the following questions:

  • Who will be responsible for evaluating and selecting the right projects and work for your portfolio?
  • Who will be defining the framework and governance of the Portfolio Management workflow within your organization?

  • Who will be responsible for making necessary decisions in regards to portfolio performance, process alignment, resourcing and portfolio changes?

  • Who will be responsible for managing the overall execution of the approved portfolio?

  • Who will supply the appropriate information for each portfolio item such as business case and project/work goals?

  • Who will be in charge of defining and implementing the processes used for project management when executing on each item of the approved portfolio?

  • Who will be responsible for managing all of the resources assigned to the approved projects and work?

  • Who will be responsible for managing the execution of each project/ work item within the approved portfolio?

  • Who will be in charge of actually doing the work/tasks for each project or work item within the approved portfolio?

  • Who will be responsible for determining project/work positioning relative to the associated market and the competition?

  • Who will be responsible for the operations of the business while implementing the portfolio?

  • Who will provide the facilities and infrastructure needed to implement and maintain the products produced from the portfolio?

  • Who will ensure all legal contracts and regulatory guidelines are followed throughout the life cycle of the portfolio?

  • Who will be in charge of reviewing and controlling finances of the portfolio?

  • Who will benefit from the end result of the project or work items within the portfolio?

  • What third party vendors or partners are needed to execute on the portfolio?

Step 2: Define a Portfolio Management Plan>

The following questions need to be addressed in your Portfolio Management Plan:

  • What are the roles and responsibilities for the Portfolio Management process?

  • How will the communication be handled for the Portfolio Management process?

  • What is the process for creating and authoring portfolio items?

  • What is the governance plan for selecting and approving portfolio items?

  • What are the defined metrics for determining success of your Portfolio Management Plan?

Step 3: Define Portfolio Management Key Evaluation Metrics

As we pass through difficult economic times it is more critical than ever to ensure the right investments are being made. The Key Evaluation Metrics that you define for your portfolio items are critical in determining the resulting project/work value. Here are a few metrics to consider when determining which projects and work bring the most value to your business:

  • Will the project/work bring additional revenue to the business?
  • Will the project/work bring quality improvement to the business?

  • Will the project/work help the business expand into new markets?

  • Will the project/work generate cost reductions?

  • Will the project/work expand current customer base?

  • Will the project/work reduce risks to the business?

  • Will the project/work reduce time to market or cycle times?

  • Are resources with the right skillset available to implement the project/work?

  • Will the project/work increase customer satisfaction?

  • Will the project/work increase employee satisfaction?

  • Will the project/work increase ROI (return on investment)?

  • Will the project/work represent a change in NPV (net present value)?

  • Will the project/work increase IRR (internal rate of return)?

There are no right or wrong metrics in determining which projects and work bring the most value to your organization but there is no reason to reinvent the wheel completely. Leverage best practices and internal governance already in place to make this complex task more feasible. Leverage a Portfolio Management/decision tool (such as PortfolioEngine) that supports your current processes and that is flexible enough to customize to fit your needs.

Heather Champoux, PMP is currently the Director of Marketing for EPM Live. EPM Live is a global leader in Online Project, Portfolio and Work Management solutions. EPM Live’s award winning products have revolutionized the way organizations work today and continue to receive high accolades across the industry. With over 14 years of experience in Project Management marketing, system design, implementation and system/process training, Heather specializes in aligning customer needs with technology. Heather received her PMP certification in January of 2005 from PMI Global. Prior to EPM Live, Heather was a lead Program Manager for First American Interactive.

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