What Would you Consider to be Key Features of a Successful Portfolio Management Tool

Either managing portfolio or other activities, build a framework which allows movement along the process path.

Organizations today have to manage the large quantity of projects in order to beat competition and delight customers. In reality, many businesses still manage portfolio decisions on good old excel spreadsheets where each item carries importance based on a selection of criteria, new revenue, strategic fit, etc. Progressively, with many management tools handy, how to take more advanced approach, by applying a portfolio management software tool to drive the key decisions that result in a strategically aligned change portfolio to bring efficiency and effectiveness?

Think about how a portfolio platform might look: It includes innovation management, portfolio management, enterprise architecture, business process, the planning aspects of a portfolio, all should make up a platform. They all offer extensive configurability to reflect the way you like to see the portfolio sliced and projects run (flexible or formal process with "forks"), with links to business strategy alignment, scenario planning, program and project life cycles, project initiation, requirements management, risk management, resource management, project controls (progress, finance, quality and change), comprehensive dashboard reporting and tracking of benefit realization. A layered approach with data feeding up so the portfolio owner can advise the board etc, and they can make strategic decisions without digging in the detail. Down below can be suitable tools for purpose on the projects which align and support the project methodologies and requirements.

The portfolio management tools are necessary to work in two distinct modes: The first of these is at the operational level where practitioners can use a system as a collaborative environment to collate information and as a repository for their key data. This starts with the ability to capture ideas beginning with input from the business or customer quickly followed by input from those who shape ideas and those turn ideas into reality. Scenario planning would be a key feature to support this idealization process. The second is the strategic planning of the potential portfolio, "what if" situations showing potential scale of business benefit to be driven from the portfolio based on different mixes of programs and projects. It provides an “executive” view including impact analysis, reporting and alignment to strategy. All of the above should be supported by a robust, flexible and comprehensive set of tools to report and provide performance metrics, which allow the portfolio to be fine-tuned over time so that it delivers maximum strategic advantage to the organization. Operational data should only be published to the executive level through a control mechanism to avoid wildly variable information affecting decision making. And all product development should follow a prescribed process (or processes to cater for differently sized activities) monitored and regulated by the system. And an effective portfolio management tool is flexible, it can slice and dice the portfolio in a variety of ways - by geography; by line of business; by sponsoring executive; by delivery unit; strategic theme; and so on.  

Execution Management includes varying management perspective: Requirements Management of the specific needs of each component of the portfolio; Resource Management that are committed to the portfolio; Project Management of elements in the portfolio such as project definition, project planning, risk and issue management, change control, time capture, progress reporting, operational management of business unit, and its impact on the active portfolio; financial management of actual / re-forecasts of the active portfolio to ensure costs are controlled and the delivery of benefits stays on track. Value Management means the P&L of the active portfolio; the strategic ROI of the portfolio; the TCO of the portfolio. The final level of planning at this level is the creation of the agreed road-map which illustrates the final version of the portfolio that will become the active portfolio.

Portfolio management processes are important, but it doesn't mean all product development should follow a prescribed process, that stifles innovation. There are many tools around, but lack of a “perfect” one. Rather, build a framework which allows movement along the process path. There are not many strong portfolio management options that truly facilitate the full reporting, sensitivity/scenario features and calculations that would enable better and faster decision making. So the key factors are executive sponsorship, effective change management, and a pragmatic deployment plan - all focused on driving business value.

Posted in: Project Management