As mentioned in my earlier post, “Project portfolio management — or simply portfolio management — is defined as the “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs and operations.”
So who really needs portfolio management?
A start up company or one who is responsible for investment and work to be accomplished within an organization needs a project portfolio management.
Effective portfolio management aligns corporate investments and resources with the overall strategic objectives.
The net effect of a good PPM model is that business units can make a stronger contribution to the overall business strategy and bottom line.
With portfolio management, we would expect the following benefits.
- Increased IT performance through discipline and mature PPM practices.
- Avoidance of additional IT spend on efforts that do not align with the business strategy.
- Earlier identification and corrective action for troubled IT projects and programs, and
- Improved communication and risk management effectiveness for IT and the business.
For portfolio management to succeed, recognizing the need and obtaining buy-in from the sponsor is important and critical.
Management organizations like PMO are an effective way to organize and manage an enterprise portfolio and enable others responsible for management and delivery of IT products and services to operate in an effective manner.
Portfolio management also encompasses governance and resource allocation, ensuring compliance with standards, alignment with strategy, and ensuring optimal resource usage.
For effective portfolio management, clear and effective communication channels are critical to be established between all stakeholders in the portfolio.