What is portfolio management?

A portfolio is a collection of work by an individual; the project manager's portfolio is the grouping of projects you manage. Project portfolio management is the art and science of keeping track of all the applications and projects you have going at one time. Portfolio management is tactical; you manage data, resolve issues, and make decisions. Portfolio management is also strategic; you see how your projects align with the business direction, your judge relative priorities, and you constantly weigh the benefits you expect of your projects.

Why do I need to do this?

In most organizations, there is an interrelationship between projects. Projects may share resources, the need for critical skills, objectives, and even a budget. If an application is particularly large, it may be broken down into several projects, which may or may not be in progress at the same time. Managing your projects as a portfolio also has benefits. It:

• Provides an overview of all the projects you are managing

• Gives you an instant view of each project's lifecycle stage and status

• Quickly identifies trouble spots

• Demonstrates the depth and breadth of your involvement with each project

• Identifies potential over-commitment of your time

• Shows your progress over time from project to project

• Helps you prioritize your work and allocate your time

The right environment

The right environment increases your chances of success in project portfolio management. A supportive environment includes:

• Easy and open access to credible, timely information
  
  
• Standards and procedures, so you know, in general, how to manage and track all projects
  
  
• Support for timely and accurate decision-making

If you are fortunate enough to have this type of work environment, you can view the projects in your portfolio not only in relation to each other, but also in relation to projects across the organization. If your organization is not as supportive, you can still manage the projects in your own portfolio.

When do I implement portfolio management?

Portfolio management can help when you are managing more than one project, or have other responsibilities, such as involvement as a project team member, training, coaching, or administrative tasks.

How do I set priorities and manage the portfolio?

One of the primary activities in project portfolio management is prioritization. The environment in which you manage projects is constantly changing, as are the projects themselves. You perform the following activities on a regular basis. See topic "Project Status Reporting" for more detailed recommendations on timing.

1. Review the parameters of each project including the scope, costs, benefits, and activities. Roll up individual project activities to the portfolio level.
   
   
2. Define your priorities to help judge the relative benefits, costs, and importance of each project. Priorities include: alignment with business objectives, alignment with technology strategy, costs, benefits,and priorities from other organizations.
   
   
3. Judge your projects according to the priorities you set. At a minimum, all projects should support the business direction, goals, and culture.
   
   
4. Assess the impacts your projects have on each other. You may find that a strategically important project is in trouble by the demands of an urgent, but not important, project. When you do this, you gain a more accurate view of the importance, benefits, and costs of each project.
   
   
5. Develop a listing of projects, and rank them according to the priorities you have set.
   
   
6. Act on your prioritization. This may mean meeting with project sponsors to realign projects, shift resources, and reallocate budgets. It may even mean putting some projects on hold so you can allocate more time, resources, and attention to others.

If you're a miMentor subscriber, log-in to miMentor to read more about:

• Project Portfolio Status Report
• Project Status Reporting - Timing Tips

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