Outline of the
* Note that my request to quote was denied by
1.0 Chapter 1 – Introduction to Portfolio Management
“Good practices”
Focused on “doing the right work” not just “doing work right”.
1.1 Purpose of the Portfolio Management Standard
Extension to the PMBOK (Project Management Body of Knowledge) and to OPM3 (Organizational Project Management Maturity Model).
Intended for “profit, non-profit, and government”
1.1.1 Audience for the Portfolio Management Standard
Broad coverage (1/8th of a mile wide and an inch deep?)
1.2 What is a Portfolio
Investments available to the organization
Should be aligned with the organizations goals
Organization specific groupings
It is possible to measure attributes and thus rank and prioritize each
Abstraction of Figure 1-1
1.3 What is Portfolio Management
* Portfolio management is the process of organizing, prioritizing
and managing the collection of project and programs with the purpose of
coordinating activities to achieve organizational goals.
1.4 The Link with Corporate Strategy
Key diagram is Figure 1-2. It was adapted from “The Project Age: Working Paper No 1a by Claude Emond, Renee Thibault and Hugues Bouchard. In rough form it looks vaguely like below.
* Projects management is described in the PMBOK. Portfolio management aligns projects to strategic goals.
1.5 The Link between Portfolio Management and Corporate Governance
Corporate Governance is the framework and rules to dictate how the company works towards goals.
Figure 1.4 shows swim lanes for Executive Management, Portfolio Management, Project and Program Management and Operations Management.
1.6 The Link between Portfolio Management and Operations
Functional groups might be project sponsors
Operational budgets might fund portfolio efforts
1.6.1 Finance – reports and monitors the portfolio budgets
1.6.2 Marketing – analysis and research are required to set the corporate goals
1.6.3 Corporate Communication – it is important to communicate goals and accomplishments
1.6.4 Human Resources Management – staff planning and training
1.7 The Links between Portfolio Management and Project Management / Program Management
Project metrics are used by Portfolio Management to support or terminate projects and programs
Portfolio Management needs Project Management to implement the components of the portfolio
1.8 Role of the Portfolio Manager
Monitor the balance of the portfolio and alignment with corporate goals
Monitor and report on the performance of the portfolio components
Monitor and report on the financial payback from the portfolio
1.8.1 Benefits Realization – work to optimize the benefit to the corporation
1.8.2 Program and Project Management Methods and Techniques – High level health of projects and programs as well as the ability to evaluate the management approaches used on each
1.8.3 Process Development and Continuous Improvement – create and maintain the techniques
1.8.4 General Management Skills – people skills along with industry specific knowledge
1.9 Portfolio Management Metrics
Important to measure to facilitate planning and to monitor progress towards documented goals
2.0 Chapter 2 – Portfolio Management Business Process and Organization
Portfolio Management is an integrated component in the management of the corporation
2.1 The Portfolio Management Business Process Overview
2.1.1 Links with Strategy
Periodically review the portfolio for alignment with:
Corporate strategy
Viability of each component
Ranking against other components
Resource availability
Portfolio priorities
Changes to the portfolio since the last review
Balancing of short term and long term goals
Balancing of risk in alignment with the corporate risk strategy
Check each component for alignment with updated corporate strategy
2.1.2 Characteristics of the Portfolio Business Process Cycle
The portfolio strategy might span multiple years, with reviews quarterly, semi-annually or annually
2.1.3 Portfolio Business Process Cycle Details
Good lists included on the types of activities that should be included in each portfolio review
2.2 Portfolio Stakeholder Roles and Responsibilities
* Definition of a “stakeholder” mimics that of a project stakeholder
2.2.1 Portfolio Review Board – Responsible for making the decisions
2.2.2 Customers – Internal and external
2.2.3 Sponsors – Champion and fund components
2.2.4 Executive Managers – Set the corporate strategy
2.2.5 Operations Management – Need to balance operational staffing with project staffing
2.2.6 Portfolio Managers – Monitor and manager the components and report performance to the Board
2.2.7 Program Managers – Fund and manager programs in accordance with portfolio goals
2.2.8 Program / Project Management Office – Varies by organization
2.2.9 Project Managers – Responsible for assigned projects and reporting on their performance
2.2.10 Functional Managers – Allocate the resources
2.2.11 Finance Managers – Do the financial analysis on the components
2.2.12 Project Team Members – Do the work and complete the project successfully
2.3 Organizational Influences
All managers must support the portfolio
It is also important to balance the stakeholder needs
2.3.1 Organizational Culture – People, Processes and Tools (Technology)
Organization must support the portfolio process
Organization must be adaptable to change
2.3.2 Economic Pressure – financial conditions in the company
2.3.3 Organizational Impacts – Lack of process within segments of the company can interfere
3.0 Chapter 3 Portfolio Management Processes for a Portfolio
Prerequisite knowledge
Corporate strategy
“Determining factors” (evaluation criteria)
Consolidated view of all the portfolio components
Documented process
* Note that this document describes the processes but does not explain how to implement them.
Key assumptions:
The corporation and the PMO want portfolio management
Portfolio components do exist
Skill sets
Project management process is in use
Roles and responsibilities are defined
Corporate decisions and strategy are communicated
Portfolio Management Process Groups
Aligning Process Group – describes how to choose the components
Monitoring and Controlling Process Group – describes how to review and update the portfolio
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Aligning |
Monitoring and
Controlling |
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Identification |
Portfolio Periodic Review and Reporting |
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Categorization |
Strategic Change |
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Evaluation |
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Selection |
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Prioritization |
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Portfolio Balancing |
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Authorization |
3.1 Identification
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Inputs |
Outputs |
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Strategic plan |
List of components |
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Component definition |
Key descriptors for each component |
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Component key descriptors and templates |
List of rejected components |
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Inventory of all key existing components |
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Inventory of all new component proposals |
3.2 Categorization
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Inputs |
Outputs |
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List of components |
List of categorized components |
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Key descriptors for each component |
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Categories |
3.3 Evaluation
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Inputs |
Outputs |
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Strategic plan |
List of categorized and evaluated components |
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List of categorized components |
Value score for each component |
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Key descriptors for each component |
Graphical representations |
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Recommendations |
3.4 Selection
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Inputs |
Outputs |
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Strategic plan |
List of categorized evaluated and selected components |
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List of categorized and evaluated components |
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Value score for each component |
Recommendations |
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Graphical representations |
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Recommendations from component evaluation process |
3.5 Prioritization
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Inputs |
Outputs |
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List of categorized evaluated and selected components |
List of prioritized components within each strategic category |
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Recommendations |
3.6 Portfolio Balancing
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Inputs |
Outputs |
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List of prioritized components within each strategic category |
List of approved portfolio components |
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Updated master list of approved, inactivated, and terminated components |
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Portfolio management criteria |
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Portfolio management performance metrics |
Updated approved portfolio component allocations |
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Capacity constraints |
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Portfolio rebalancing recommendations from reporting and review |
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3.7 Authorization
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Inputs |
Outputs |
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List of approved portfolio components |
Additions to the active component inventory |
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Component budget requirements |
Updated performance expectations |
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Component resource requirements |
Approved component budget and exceptions |
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List of inactivated and terminated components |
Approved component resource allocations and exceptions |
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Excluded components |
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Portfolio milestones |
3.8 Portfolio Periodic Reporting and Review
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Inputs |
Outputs |
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Component data |
Directions regarding components |
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Resource allocation and capacity data |
Portfolio rebalancing recommendations |
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Environmental constraints |
Recommendations to business |
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Organizational governance standards, controls, and constraints |
Refined selection criteria |
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Updated key indicators |
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Evaluation and selection criteria |
Strategic goal achievement reporting |
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Updated key performance indicators (KPIs) |
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Strategic goals and strategy |
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Portfolio management criteria |
3.9 Strategic Change
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Inputs |
Outputs |
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Portfolio periodic reporting and review |
New criteria |
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Strategic plan update |
Exercise based on Figure 3-10: Draw the required input and output arrows
Strategic Planning
Operations Portfolio Management
Program / Project Management