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.
