Management of Portfolios (Managing Successful Portfolios)

This guide provides practical guidance for managers of portfolios and those working in portfolio offices as well as those filling portfolio management roles outside a formal PfMO role. It will be applicable across industry sectors. It describes both the Portfolio Definition Cycle (identifying the right, prioritised, portfolio of programmes and projects) and the Portfolio Delivery Cycle (making sure the portfolio delivers to its strategic objectives). Management of Portfolios Contents List of figures List of tables Foreword Acknowledgements Executive summary Figure 0.1 The portfolio management cycles 1 Introduction 1.1 Purpose of this chapter 1.2 Purpose of this guidance 1.3 Structure of the guidance 1.4 Target audience Table 1.1 Chapter summary Table 1.2 Summary of the target audience and the value they can expect from this guide Figure 1.1 MoP’s relationship with other Best Management Practice guides 2 What is portfolio management? 2.1 Purpose of this chapter 2.2 Background 2.3 Portfolio management: definitions 2.3.1 Portfolio 2.3.2 Portfolio management 2.3.3 Programme 2.3.4 Programme management 2.3.5 Project 2.3.6 Project management 2.4 The portfolio management model 2.4.1 The portfolio management model and five principles Figure 2.1 The portfolio management model 2.4.2 Portfolio management cycles and practices 2.5 The benefits of portfolio management 2.6 Portfolio management – some misconceptions 3 The strategic and organizational context 3.1 Purpose of this chapter 3.2 Portfolio management and business as usual Figure 3.1 ‘Run the business, change the business’ 3.3 Portfolio management and strategic and business planning 3.4 Portfolio management and budgeting and resource allocation Figure 3.2 Strategic planning and portfolio management 3.5 Portfolio management and programme and project management 3.6 Portfolio management and performance management Table 3.1 Description of collaborative working between the portfolio office and key departments/functions 3.7 Portfolio management and corporate governance 3.8 Portfolio management and corporate functions 4 Portfolio management principles 4.1 Purpose of this chapter 4.2 Introducing the portfolio management principles 4.3 Portfolio management principle 1: senior management commitment Table 4.1 Senior management commitment: keys to success 4.4 Portfolio management principle 2: governance alignment Figure 4.1 Example of a portfolio governance structure 4.4.1 Portfolio governance structure 4.4.2 Other important considerations 4.5 Portfolio management principle 3: strategy alignment Table 4.2 Governance alignment: keys to success Figure 4.2 Example of alignment of change initiatives with strategic objectives Figure 4.3 Heintzman and Marson’s proposed public sector service value chain Figure 4.4 Example of a value profile 4.5.1 How can the portfolio be aligned with strategy if strategic measures are not clearly defined? Table 4.3 Strategy alignment: keys to success 4.6 Portfolio management principle 4: portfolio office 4.6.1 Portfolio, programme and project offices Figure 4.5 Example of an outline P3O model Table 4.4 Portfolio office: keys to success 4.7 Portfolio management principle 5: energized change culture Table 4.5 Energized change culture: keys to success 5 Portfolio management cycles 5.1 Purpose of this chapter 5.2 The portfolio management cycles 5.3 If there is no defined start, how should portfolio management be implemented? Table 5.1 Approaches to implementing portfolio management 5.4 How is progress sustained? 5.5 Why does organizational energy link the portfolio management cycles? Figure 5.1 Organizational energy matrix 5.6 Portfolio definition cycle 5.6.1 What is the purpose? 5.6.2 What happens if this is done well? 5.6.3 What if this is not done well? 5.7 Portfolio delivery cycle 5.7.1 What is the purpose? 5.7.2 What happens if this is done well? 5.7.3 What if this is not done well? 6 Portfolio definition cycle: practices 1–5 6.1 Purpose of this chapter 6.2 Portfolio management practice 1: understand 6.2.1 What is the purpose? 6.2.2 What is involved? Table 6.1 Understand: keys to success 6.3 Portfolio management practice 2: categorize 6.3.1 What is the purpose? 6.3.2 What is involved? Figure 6.1 Cranfield Information Systems investment portfolio Table 6.2 Simplified portfolio categorization model Figure 6.2 Number of changes by portfolio category Figure 6.3 Example of portfolio categorization with tailored investment criteria Table 6.3 Categorize: keys to success 6.4 Portfolio management practice 3: prioritize 6.4.1 What is the purpose? 6.4.2 What is involved? Table 6.4 Calculating financial metrics Figure 6.4 Delivery confidence Figure 6.5 Example of a portfolio map ‘bubble’ matrix of change initiatives based on benefits and risk Table 6.5 Example – scoring a proposed change initiative using weighted prioritization criteria Table 6.6 Example – ranked list of change initiatives 6.4.3 Prioritization – a simplified example Table 6.7 Prioritize: keys to success 6.5 Portfolio management practice 4: balance 6.5.1 What is the purpose? 6.5.2 What is involved? 6.5.3 Being creative to support decision making Figure 6.6 ‘Tornado’ diagram. Note that GM stands for gross margin, and the customer rating refers tothe scale of customer demand. Table 6.8 Balance: keys to success Figure 6.7 Portfolio map and balancing 6.6 Portfolio management practice 5: plan 6.6.1 What is the purpose? 6.6.2 What is involved? Table 6.9 Plan: keys to success 7 Portfolio delivery cycle: practices 6–12 7.1 Purpose of this chapter 7.2 Portfolio management practice 6: management control 7.2.1 What is the purpose? 7.2.2 What is involved? Figure 7.1 Example of a business change lifecycle Table 7.1 Example of an investment appraisal template Figure 7.2 Example of a portfolio dashboard report Figure 7.3 Home Office portfolio dashboard delivery assessment Figure 7.4 Peterborough City Council’s gateway process Table 7.2 M anagement control: keys to success 7.3 Portfolio management practice 7: benefits management 7.3.1 What is the purpose? 7.3.2 What is involved? Figure 7.5 Service transformation agreement benefits categorization Table 7.3 Portfolio benefits categorization – CJS IT Table 7.4 Benefits management: keys to success 7.4 Portfolio management practice 8: financial management 7.4.1 What is the purpose? 7.4.2 What is involved? 7.5 Portfolio management practice 9: risk management 7.5.1 What is the purpose? Table 7.5 Financial management: keys to success 7.5.2 What is involved? 7.5.3 Dependency management Table 7.6 Key challenges and sample solutions for managing dependencies Table 7.7 Risk management: keys to success 7.6 Portfolio management practice 10: stakeholder engagement 7.6.1 What is the purpose? 7.6.2 What is involved? 7.6.3 Focus on senior management 7.6.4 Embrace modern communications 7.7 Portfolio management practice 11: organizational governance 7.7.1 What is the purpose? 7.7.2 What is involved? Table 7.8 Stakeholder engagement: keys to success Table 7.9 Organizational governance: keys to success 7.8 Portfolio management practice 12: resource management 7.8.1 What is the purpose? 7.8.2 What is involved? Table 7.10 Resource management: keys to success Appendix A: Portfolio management health check assessment Appendix B: Role descriptions Appendix C: Programme and project information template Appendix D: Benefits management – an example Appendix E: Portfolio-level documentation Appendix F: Assessing the impact of portfolio management References Glossary Index "One of the greatest challenges an organization faces is to manage the complexity of all the change programmes and projects it has in flight. The need to prioritize investment and focus on those projects that deliver the organization's strategic needs has never been more acute. All sectors face the continuing challenge to deliver more with less. This new guide describes, in the portfolio definition cycle, how to identify the right programmes and projects to deliver and, in the portfolio delivery cycle, how to make sure they continue to meet the organization's strategic needs and provide the benefits they promised. The guide provides valuable insights for managers charged with delivering their organization's change initiatives, as well as practical guidance for those who have the task of day-to-day management of the portfolio of work."--Back cover