Project Portfolio Management: A View From The Management Trenches

3.1. EPMC WORKING DOCUMENT ON PORTFOLIO INVESTMENT

Portfolio management is a key step in the implementation of strategy. Strategy articulates a vision for the future of the organization that usually requires the development or acquisition of new organizational assets or capabilities. Developing and/or acquiring these takes investment of financial and human resources, both of which are scarce resources. Most organizations have far more good investment opportunities than resources to fund them. Portfolio management is about the prioritization, timing, and resourcing of these investment "projects."

Given limited resources and the need to select the "best" set of projects that we can afford, how should we determine what is the "right" portfolio of investments? This is a multifaceted question in a dynamic environment. The "right" portfolio should enable strategy, deliver a good return on investment, and be balanced in supporting the various objectives of the organization (e.g., strategic success, financial success, high growth, risk management, timely execution, employee satisfaction, customer satisfaction). As if this were not already complicated enough, these objectives evolve over time and what is strategically aligned today may not be tomorrow. So portfolio management must be a dynamic process, and in the ideal state be optimized in real-time (or near real-time) as a few leading practitioners are striving to achieve today. Also, since not all good projects can be approved immediately, ...