Portfolio management ensures that the right project is prioritised, in line with the strategies and visions
Effective portfolio management is largely about setting the right priorities between different projects, programmes and other initiatives. This is done to ensure maximum resource utilisation and optimal business benefits.
Resources are often limited and not all initiatives can be implemented at the same time. Managing and controlling a portfolio creates a balance between the strategic objectives of the operations and the capabilities of the organisation to deliver them, or the delivery capacity of projects and business changes. PPS puts the operations' vision and strategic goals at the centre while the model supports everything from strategic management, business benefit management to effective project management.
A portfolio in the project context is a collection of projects and programmes within an organisation, or part of an organisation. In a portfolio, portfolio management needs to continuously prioritise between the initiatives in the portfolio to ensure that the maximum contribution to the objectives of the operations is achieved. Portfolio management is responsible for identifying the strategic objectives of the operations and the shorter-term business objectives to be achieved. Ongoing projects and new initiatives are continuously evaluated against the objectives set.
Portfolios can be established in different parts of the organisation and thus for different types of projects and programmes. Projects and programmes that compete for the same resources should be included in the same portfolio. The purpose of the portfolio needs to be clear. The benefits to be realised from portfolio management should be clear before it is established.
It is the responsibility of senior management to define and set strategic objectives within an organisation. Portfolio management sets and monitors impact objectives and is responsible for ensuring that the expected benefits of projects and programmes are in line with the strategic objectives.
The portfolio is prioritised based on an assessment and weighting of the project's contribution to the strategic objectives, as well as a weighting and assessment of the efforts required to implement the project. The portfolio management can then prioritise based on these weightings, the dependencies of the projects on other initiatives and the status of the project.
The PPS model supports the establishment and management of a portfolio regardless of the size and complexity of the operations. PPS Portfolio Management provides the basis for deciding which projects and programmes to launch, and a process for setting priorities and monitoring against expected benefits and strategic objectives.