Portfolio Management plays a significant role in portfolio prioritization, integration, and optimization.
However, there are not many strong portfolio management options that truly facilitate the full reporting, sensitivity/scenario features and calculations enabling better and faster decision making and effective portfolio management. Here are a few leverage points to improve overall portfolio management effectiveness.
Set guidelines, but not stifle the change: A portfolio management framework helps the business take a structural approach with all important business elements such as principles, processes, methods, rules, roles, etc, to facilitate a healthy planning and management cycle. A well-defined set of guidelines for managing business initiatives is for setting the frame of relevance and guide through changes and strategy management.
Furthermore, the purpose of setting guidelines is to clarify the core decision values, statement of direction, cultural attitudes, strategic goals, as well as overall behavioral desires. Improving the effectiveness of portfolio management is to ensure that the management is doing the right things by setting guidelines to provide greater clarification of mission/vision/strategy at a more detailed level.
Standardize with flexibility: In order to survive and thrive amid constant change, organizations should build a health portfolio with a right balance of mid or long term strategic initiatives and short-term quick work. Strategic initiatives are the vehicle for achieving a strategic goal. Portfolio management standardization intends to generalize or figure out a “common formula” with varying components such as budget planning, capacity/resource management, talent/skill management, quality management, best practices, etc.
Ideally, standardization should provide benefits through reuse that accelerates solution implementation and reduces expenses and risks, as well as capitalization of previous experiences, cost control, and convenience. Standardization shouldn’t stifle innovation or ignore differences. Flexibility enables the business to do things differently, and faster, etc. it’s crucial to set the right balance of standardization and flexibility for improving portfolio management maturity..
Make a choice without chaos: Prioritization is about managing constraints, you can't do everything; so which business initiatives will you do? Prioritization is about clarifying: "Is this the best use of our resources, now? There needs to be a well-defined portfolio prioritization and governance process with business partners. When a new initiative comes up, the senior stakeholders must be able to rate its importance, if it’s critical to the organizational success, it’s important to move something else to the bottom of the list.
Upon increasing paces of changes, the reality is that there are a lot of things that can go wrong and it is not always easy to identify what is important. Prioritization brings transparency to the organization, creating internal competition among new business initiatives, and building a healthy portfolio of “run, grow, and transform,” to explore the new opportunities and accelerate business performance.
Focus on value, then cost and schedule: The goal of portfolio management is to implement strategy with continuous deliveries, focus on value generation. Strengthen the strategic alignment of programs to prevent initiatives being undertaken that do not support the enterprise strategy. The portfolio management process itself is a governance process which is usually tailored to match the organization’s type of business, culture and company size and overall organizational maturity.
To focus on value, the first step is to make a strategic mapping, create a situation where the main strategic initiatives are commonly understood cross-functionally on the leadership team. This is where prioritization should take place. Learn to cancel bad initiatives without creating sufficient value, and move on. In order to make the portfolio executable, an organization needs to make sure that enough resources are available to deliver the programs. If the management focuses on short term value too much, this might not support long term strategy and vision in the end. If the management puts too much focus on long-term value, there may be a loss of momentum and engagement.
The size and mix of the business initiative portfolio depend on the business situation, strategic objectives and severity of external challenges or changes. Portfolio Management plays a significant role in portfolio prioritization, integration, and optimization. It is also essential to successful corporate governance and as such, a comprehensive fusing of a firm's strategic capabilities.
Set guidelines, but not stifle the change: A portfolio management framework helps the business take a structural approach with all important business elements such as principles, processes, methods, rules, roles, etc, to facilitate a healthy planning and management cycle. A well-defined set of guidelines for managing business initiatives is for setting the frame of relevance and guide through changes and strategy management.
Furthermore, the purpose of setting guidelines is to clarify the core decision values, statement of direction, cultural attitudes, strategic goals, as well as overall behavioral desires. Improving the effectiveness of portfolio management is to ensure that the management is doing the right things by setting guidelines to provide greater clarification of mission/vision/strategy at a more detailed level.
Standardize with flexibility: In order to survive and thrive amid constant change, organizations should build a health portfolio with a right balance of mid or long term strategic initiatives and short-term quick work. Strategic initiatives are the vehicle for achieving a strategic goal. Portfolio management standardization intends to generalize or figure out a “common formula” with varying components such as budget planning, capacity/resource management, talent/skill management, quality management, best practices, etc.
Ideally, standardization should provide benefits through reuse that accelerates solution implementation and reduces expenses and risks, as well as capitalization of previous experiences, cost control, and convenience. Standardization shouldn’t stifle innovation or ignore differences. Flexibility enables the business to do things differently, and faster, etc. it’s crucial to set the right balance of standardization and flexibility for improving portfolio management maturity..
Upon increasing paces of changes, the reality is that there are a lot of things that can go wrong and it is not always easy to identify what is important. Prioritization brings transparency to the organization, creating internal competition among new business initiatives, and building a healthy portfolio of “run, grow, and transform,” to explore the new opportunities and accelerate business performance.
Focus on value, then cost and schedule: The goal of portfolio management is to implement strategy with continuous deliveries, focus on value generation. Strengthen the strategic alignment of programs to prevent initiatives being undertaken that do not support the enterprise strategy. The portfolio management process itself is a governance process which is usually tailored to match the organization’s type of business, culture and company size and overall organizational maturity.
To focus on value, the first step is to make a strategic mapping, create a situation where the main strategic initiatives are commonly understood cross-functionally on the leadership team. This is where prioritization should take place. Learn to cancel bad initiatives without creating sufficient value, and move on. In order to make the portfolio executable, an organization needs to make sure that enough resources are available to deliver the programs. If the management focuses on short term value too much, this might not support long term strategy and vision in the end. If the management puts too much focus on long-term value, there may be a loss of momentum and engagement.
The size and mix of the business initiative portfolio depend on the business situation, strategic objectives and severity of external challenges or changes. Portfolio Management plays a significant role in portfolio prioritization, integration, and optimization. It is also essential to successful corporate governance and as such, a comprehensive fusing of a firm's strategic capabilities.
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