Portfolio Management - Project Portfolio Management Foundations

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Project Portfolio Management Foundations ::

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INTRODUCTION  ::

Introduction to portfolio management ::

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- Portfolio management is the most important skill a business must master to be successful today. Portfolio management covers all areas of how a business changes, from idea to implementation and benefits realization. It connects strategy with delivery. Ignoring it makes strategic success a gamble, at best. Hi, I'm Andy Jordan. I've been working with portfolio and project management, as well as project management offices for more than 20 years. I've led business transformation in multiple industries and have used portfolio management as a tool to deliver success repeatedly. I've helped organizations implement portfolio management, improve it, and integrate it with other business elements, always with a focus on improving results. In this course, I'll explain what portfolio management is and what it isn't, and I'm going to help you implement it successfully. We'll look at each of the stages in the portfolio lifecycle and explain the portfolio management activities that happen in each of them. We'll dive into the different roles involved in managing the portfolio and look at how they need to work together to succeed. I'll wrap up by looking at how an organization can implement portfolio management successfully. Portfolio management can change a business's entire future. My goal for you after this course is that you'll be able to help your employer deliver better results than ever before. So if you're ready, let's get started.

What is a portfolio? ::

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- [Instructor] Most believe a portfolio is an extension of projects and programs. They see the portfolio as a roll-up of the projects their employer has approved, a way to group them together. An example might be all IT projects and programs for the current year making up the IT portfolio. In reality, the portfolio comes first. The portfolio is the strategic vehicle by which a business delivers on its goals and objectives. So in IT, for example, if the goals for the year are around lowering costs, increasing security and reducing downtime, then the portfolio is responsible for delivering those goals. IT leaders will then plan to meet those goals through a number of projects and programs, and those will be placed in the portfolio. However, if one of those projects is failing, it can be canceled, removing it from the portfolio. The resources assigned to that project can then be moved to a new project or other existing projects can be changed, modifying the portfolio further to ensure it still delivers on the goals. So while the contents of the portfolio change, the purpose doesn't. It still has to deliver the expected results. In other words, the portfolio is consistent, projects and programs can be changed as needed based on their ability to contribute to goals. This means the portfolio is a living thing. It changes over time as a result of numerous variables, such as product delivery problems, but also changing business priorities, new opportunities and challenges or inaccurate plans. The portfolio must, therefore, be actively managed. It must be continuously reviewed and adjusted to ensure the projects and programs within it are the right ones and that they're capable of achieving the business goals that are expected. In order to successfully manage a portfolio, you must cover all elements of the portfolio lifecycle starting with the capturing of ideas and suggestions for projects and continuing through the analysis and selection of the initial components. Portfolio management make shifts to overseeing the project execution phase before moving into an active role in ensuring the expected business benefits are actually achieved once projects have been completed. Most importantly, all of these elements must be managed as part of a single approach to delivering results. As I said at the beginning, the portfolio comes first before projects and programs. It must be managed in that way to ensure the organization's goals have the best chance of being delivered.

PURPOSE OF PORTFOLIO MANAGEMENT  ::

1. Connect strategy with delivery
2. Alignment Management

1. Connect strategy with delivery ::

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- At the most basic level, organizations only do two things, their normal operations and the things that change those operations. Change is achieved by completing projects. And those projects must connect with strategy to ensure the right changes are happening. Why do projects get approved in the first place? It's not because the business wants a new product, system, or process. Those are the tangible outputs of the project, but the organization is interested in the outcomes that those outputs generate. For example, a new product allows a company to increase sales, gain new customers, et cetera. This improves revenue and profit, and those are the reasons why the product was developed. At any point in time, a business is changing many different aspects of their operations through projects. Some of these changes will be big, impacting many areas and holding the attention of leadership. Others will be smaller, involving just a few people in one department and being visible only to managers in that department. All of these are projects, but not all of them will be part of the strategic portfolio. The portfolio comes first, and projects are attached to it based on how they connect with the strategic priorities. The big headline projects are those that align with the goals and objectives of the entire organization, and they'll be part of the strategic portfolio. Smaller projects still have to happen but are managed independently within individual business areas. As a result, a business may have more than one portfolio. It's easy to think about the goals of a company because those are the most well-known to employees. But each department in that company also has goals. There can be an IT portfolio that supports the IT goals, a marketing portfolio for marketing objectives, et cetera. Each department will provide support to the overall company or strategic portfolio as the top priority and then will deliver the departmental portfolio with the resources remaining. You can see this gets complex very quickly. And that's why a dedicated portfolio management function is needed to manage portfolios, especially the top-level strategic portfolio. Effective portfolio management is the key to connecting strategy and execution, ensuring the business does the right work in the right way at the right time to achieve the goals that are set. To do this, the portfolio manager must be the center of all communications around the portfolio, establishing the portfolio as the connection between strategy and execution. Leaders work with portfolio management as the single point of contact for all work related to the business goals. Project managers and teams work with the portfolio management as the single source of truth on how to deliver projects that achieve those business goals. Portfolio management connects that leadership direction with project team execution and ensures the outputs achieved from the projects align with the outcomes needed by the organization.

Strategic portfolio ::

A company can have multiple portfolios

leader work with portfolio manager as the single point of contact .

Alignment management ::

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- Many organizations that establish a portfolio, approve the right projects, and then manage execution of those projects still fail to achieve their business goals. This is because organizations, especially in the private sector, operate within an environment that is constantly changing. Competitors launch products and services, change pricing models, conduct marketing campaigns, and more. Technology advances rapidly, driving innovation and making new things possible. Customers demand more features and functions, and they have shorter periods of satisfaction with the current offerings before expecting new versions. As a result, the goals and objectives set for the next year during annual planning, often set several months before that year starts, are obsolete by the time the year ends. The goals must therefore evolve, leaders adjust them in response to changing demands, competitor activity, new opportunities, and a thousand other potential variables. This is the process of managing alignment. Keeping the goals aligned with the shifting operating environment and it's an ongoing process. If the portfolio doesn't also change, it will deliver against the goals the business used to have and that doesn't help anyone. In a modern business, goals and objectives are fluid and that means the portfolio must also be fluid to maintain alignment. Portfolio management implements the same ongoing adjustment process used by leadership. On a regular basis, usually quarterly, there is a formal review, there leadership and portfolio management revalidate the alignment of goals in the portfolio to ensure no variances have occurred. Sometimes the goals change significantly, sometimes there are minor shifts, but every change must be considered by portfolio management. This ensures the contents of the portfolio reflect the revised goals. As a very simple example, if the organization shifts focus from growing revenue to reducing costs, new product development work may be canceled and replaced by efficiency and automation projects. Portfolio management must not only deal with alignment shifts that come from changing priorities, there will also be issues where the projects underway don't deliver in the way they're expected to. It may be they fall short of their estimates, cost, benefit, or both, or it may be that they contribute in different ways. An example might be an efficiency project that delivers savings that can be applied in more areas, but to a lesser extent. In these situations it may be necessary to cancel projects, approve new projects, or make changes to the projects underway in order to bring the benefits that the projects are enabling back in line with the goals and objectives. This reflects the fact that portfolio performance is more important than the success of individual projects. Maintaining alignment is one of the most important functions portfolio management performs. Whether driven by shifting business priorities, or project variances, the portfolio manager must ensure the benefits delivered match the benefits expected. Anything else is a failed portfolio.

THE PORTFOLIO MANAGEMENT LIFE CYCLE  ::

1. Portfolio Lifecycle
2. Idea generation and capture
3. Business casting and analysis
4. Capacity and Capability planning
5. Selection and Prioritiztion
6. Project Execution
7. Manage Change
8. Benefits and variance management
9. Manage the Lifecycle

Portfolio lifecycle ::

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- Portfolio management is a business management approach that must operate in all parts of the portfolio lifecycle to be successful. There are seven distinct phases of the portfolio lifecycle. The first step is idea generation and capture. This is where the seeds of the portfolio are planted. You reach out into all areas of the business, find the ideas and suggestion that will help you achieve your goals, and identify the best ones to submit for further work. Second is business casing and analysis. In this step, your best ideas are submitted to more formal analysis, developing high-level estimates of the costs and benefits associated with them. Ideas evolve into proposals and are refined into more solid concepts or projects. Third is capacity and capability modeling. Projects being considered for approval are now assessed in terms of their feasibility to deliver. You consider whether you have or whether you can get the people and skills needed to complete them, both individually and collectively. Fourth, selection and prioritization. The initial approval of projects for inclusion in the portfolio is fairly simple. It's based on the work done in steps one to three, however, you must prioritize and schedule projects carefully to achieve the goals. And you'll need to validate approvals and reprioritize throughout the portfolio's delivery. In portfolio management, this is an ongoing process for the rest of the lifecycle. Fifth is strategic execution. Here you move into project delivery. That's something most businesses are familiar with. But from a portfolio management concept, you're managing those projects to achieve benefits not deliverables. It's a very different approach. Sixth, managing change. This is another area of the portfolio lifecycle you're probably familiar with, but there are more, and more complex, drivers of change from a portfolio management standpoint than in traditional project management. And last is benefits and variance management. This final step of the portfolio lifecycle is where all of the hard work pays off. The goals and objectives are achieved as the benefits planned for are delivered. Portfolio management validates those achievements and manages any variances from expectations. Each of these separate elements is critical to portfolio management success. But most important of all is the need to manage these seven pieces as part of an overall portfolio management approach. Individually, each piece helps the business improve performance. Collectively, they're a springboard to strategic excellence.

Idea generation and capture ::

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- Business success comes from taking the ideas in employees' heads and doing something about them. Idea generation and capture is the foundation for success in every portfolio in every business. Finding the best ideas, capturing them and implementing them will allow you to maximize your potential. This is basic idea generation. Recognizing something could be better and proposing that improvement. It's something every business does and it's the first step in the portfolio lifecycle. But in many businesses, this process is conducted from the top down. Executives ask department heads to come up with ideas for their business areas. Those department heads then talk to their senior managers and several different ideas are captured by that management group. In any business, the people who have the most ideas and who know about the most problems are the staff at the front lines. These are the people who hear customer complaints everyday, who work with systems that are inefficient and ineffective, and who are frustrated by outdated processes. These are the people whose ideas you must capture and these are the problems that you must solve. That is the core of idea generation and capture in portfolio management. All staff must be encouraged to identify opportunities for change. Businesses must have processes to capture those opportunities and do something with them, avoiding them getting lost in an ineffective staff suggestion scheme. I've included a simple template that you can use to get ideas from all staff. If your business already has something similar, make sure everyone knows about it. To ensure as many ideas as possible are captured, you need a simple five-step process. First, engage with all staff from leaders to front line. Make sure everyone knows the issues, goals, and objectives, the priorities that the business is focusing on. Second, capture ideas for how to achieve those goals. This is basic information at this stage, ideas from employees in the way they are thinking about them. Third, streamline all the ideas you receive. Combine similar suggestions, group related concepts, and bring the total to a more manageable level. Fourth, assign the ideas to the appropriate business areas for review. Those departments should prioritize the ones that have the best chance of success, that make the biggest difference, et cetera. Finally, bring all the ideas back together and create a master prioritize list of ideas for the entire business. Portfolio management helps all staff understand the importance of being part of the process and make sure staff who do engage receive feedback on their ideas. That's how idea generation will gain momentum with front line staff. The nature of idea generation and capture is such that most organizations think they do it well. They have more suggestions that they can deliver on so they must be fairly good at it, right? Well maybe, but most businesses don't know if they're capturing 100% of the ideas out there, 10% or even just 1%. You need to ensure you're capturing as close to all of the ideas as possible to ensure your portfolio is as strong as it can be.

                   5 . CONSOLIDATE AND PRIORITIZE 

Business casing and analysis ::

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- Once a business has generated and captured ideas, the second step of the portfolio lifecycle is to develop business cases for those projects that have the best chance of delivering the organization's goals and objectives. Think of the business case as a proposal that summarizes what will happen in business terms if the project is approved. A well-developed business case prevents businesses from investing in projects that won't achieve results. A bad business case can do the exact opposite, cause those investments to be wasted. So you must make sure your business cases are as complete and accurate as possible. But what does that really mean? Business case estimates are developed with assumptions: how much money and how many people are needed, how big the benefits will be, and how long they will take. Because of these assumptions, your estimate should be an estimated range of values that accurately reflects the likely costs or benefits, while acknowledging there's still uncertainty. But this is when many businesses fail in their planning. They opt for precision, a single number, over accuracy, that estimated range. Worse, if the project is approved, that precise number becomes your budget, and the team has to deliver to it without any adjustment. This is where portfolio management comes in. It helps ensure there is consistent and transparent development of the numbers. Financial measures, how historic data is leveraged, the experts engaged in the process, the basis for effort and benefit assumptions. It creates a level playing field for comparing business cases, eliminating overly optimistic projections, and sales pitch-style discussions. It standardizes business case formats, allowing thorough analysis of the pros and cons of the project by including risks, issues, assumptions and dependencies. That approach maximizes the ability for executives who ultimately approve or reject projects to analyze the business cases fairly, an analysis that must be both objective and subjective. Objective analysis, looking at business cases in terms of the numbers, is the cornerstone of the process. It considers costs, benefits, timing of those benefits, and risks. It also helps identify the best proposals, as well as the best combination based on those factors. However, making decisions based solely on objective analysis will limit an organization's ability to grow. On the other hand, subjective analysis is based on a consideration of which projects feel like the right ones to approve. They're often high risk projects, but they have the potential to be the game changers, the projects that generate products and services that are radically new. Every business should invest some of their portfolio budget in these. The business case is a vital tool in helping your business decide which projects to invest in. You have to make sure your business cases are as complete as possible, consistent with one another, and reviewed in terms of both numbers and the perception. Only then can you make intelligent decisions as to which projects may be appropriate to invest in. To help you get started, I've provided a business case template. Feel free to use it, or to compare the contents with your own templates to make sure all the elements are included.

Capacity and capability planning ::

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- Any business wants to approve the best projects, but determining what is best is difficult. It's not as simple as approving those with the biggest benefits. Those may be the least likely to succeed. That's where capacity and capability planning come in, looking at whether you're capable of delivering those projects. Capacity and capability are two separate items, but both are required to make the best portfolio selections. Capacity planning is about ensuring there are enough resources to do the work, but no more. The term resources means both people and money. There must be enough of both to deliver all of the proposed projects within the time allocated for the portfolio. There must also be enough of both held back as contingency in the event of problems. Too little contingency and there's no way to recover from problems. Too much, and there's wasted effort and money sitting idle. Capacity planning manages this balance, making sure resources are used as effectively and efficiently as possible, sequencing work that impacts the various work areas, et cetera. It also considers both project delivery work and the impact on operational areas when the project delivers. Portfolio management is about achieving business goals. If a new product is delivered on time, but there aren't enough sales people, customer service staff, et cetera, to support it, the goals won't be met. Capability planning is similar. It's about maintaining the right balance in both projects and operations, but where capacity planning focuses on resources, people and money, capability planning considers skill and will. Skill goes beyond making sure you have enough people to do the work, and looks at their ability to perform the tasks that you expect of them. For example, do team members have enough experience? Do they need additional training? Are their certifications current? Is there enough coaching and support available to help them? Capability planning develops solutions for addressing these gaps, training, hiring, contracting, et cetera. Your ability to implement those solutions and the cost of doing so, contributes to the determination of the best projects. The will element is about whether you're prepared to accept the implications of a particular project or mix of projects. Risk exposure's a good example. You must decide whether a high risk, high return project is better than a more conservative one with a lower potential return. Across the whole portfolio, you must decide whether it is better to distribute projects across business areas or focus on one or two departments for the next period. Determining your ideal portfolio requires capacity and capability planning to work together. The best portfolio consists of projects that contribute well to goals, but that have a high likelihood of success, that distribute work across departments, and only expose your business to a level of risk you're comfortable with.

Selection and prioritization ::

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- Capturing ideas, developing business cases, and assessing capacity and capability are all designed to make the initial selection of projects for your portfolio a simple process. When those elements are done well, business leaders will be able to approve the best-fit projects based on ease of execution, alignment with goals, strategic importance, et cetera. That approval will occur by reviewing the recommendations, considering the advantages and disadvantages of each combination of projects, and understanding their limitations. But approval to include a project in your portfolio is not the end of the process. You set goals and objectives for a full year to align with your reporting and financial period. You'll also allocate funds for projects on the same basis, so your projects are approved for that same one-year cycle. Because of this, for many projects there is a period of time between the decision to include a project in a portfolio and the start of work on that project. Depending on when the project is scheduled and when you do your annual planning, that period of time could be close to a year, and a lot can happen in that amount of time. To address this, in portfolio management there is a second approval when work is scheduled to start. This second approval revisits the business case and validates the following: that the project is still aligned with the business goals; that the business case cost and benefit projections are still realistic; and that the project remains the best investment for the organization. Projects already underway are not exempt from this process. They're reviewed on a regular basis to confirm that they should be allowed to continue. This serves as a validation that the project is still on track to deliver appropriate business benefits. Portfolio management initiates these reviews in conjunction with the portfolio's stakeholders. If problems are identified or if there are better options available to deliver the business results, investments can be redirected. Projects underway may be delayed, put on hold, or canceled all together if that's the best option to achieve the goals. Portfolio management works to ensure the next most important project based on the availability to deliver results, the ability to allocate staff, and any scheduling limitations is the next to start when resources become available. This results in a prioritized backlog of work being maintained that is ready to go as soon as possible. The formal revisiting of approval decisions should happen at least quarterly, and the less structured portfolio management reprioritization must happen at least monthly. In this way, the portfolio selection work that is thorough during the initial planning period is maintained throughout the portfolio, helping to ensure the value is maintained. This process of continuous review and validation, along with corrections where required, is vital. Portfolio management is continuously comparing what is happening with what needs to happen and making adjustments as needed. This helps ensure the work never drifts too far away from the purpose of that work, delivering the business results.

Project execution ::

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- Project execution, the work that happens once a project is approved and resources allocated, is an aspect of portfolio delivery that most organizations think they do well. In most cases, they're wrong. Project management is something you've probably been doing for many years, but that work is probably focused on outputs. This is often referred to as the triple constraint: on time, on schedule, and on budget. The idea is if you complete the plan on time with the resources provided and including all of the requirements, the project will succeed. The triple constraint is important, but in a portfolio, delivering on benefit is much more important. This means the project is only considered successful if it enables the business to achieve the goals for which it was approved. Projects are included in the portfolio because they are expected to contribute to the organization's goals and objectives. That needs to define how they are managed. Doing everything possible to allow the business goals to be met. Outputs are not enough. The project has to achieve outcomes. If those goals are achieved, it doesn't matter if the project is a little late, a little over budget, or a little light on features. In other words, outputs can be sacrificed to protect outcomes. On the other hand, if the project is on time and budget with all features, but is incapable of achieving the business results expected, you will have failed. As a simple example, think of a project that should deliver a new product at the end of the year. Everything is going well, but a major competitor announces they're going to launch their rival product two months before you. If you stay on track, you will probably never achieve your revenue or market share goals. Your competitor will get there first. On the other hand, if you have more people, go over budget, and you drop some minor features, cut scope, you can deliver three months early, ahead of your rival. You've sacrificed outputs to protect outcomes. This is a big change and it's where the relationship between portfolio management and project management becomes key to success. Project management focuses on delivering the work, what is being done. Portfolio management focuses on the purpose of that work, the why. Think of this as the project team focusing on the triple constraint, the outputs, but being guided by the portfolio manager, who adjusts those outputs for the sake of the benefits or outcomes. Only when these two are aligned can you achieve consistent success. In this context, project managers are sub-portfolio managers. They're managing a subset of the overall portfolio, which is more important than a single project. All of those projects in the portfolio must also be managed as related items. This is the idea of benefit-driven dependencies, relationships between otherwise separate projects. These relationships are created because of how these projects contribute. For example, if you have two unrelated projects that must both deliver part of the cost reduction target, those projects are connected. If one falls short of its cost-saving goal, the other must make up for it. This combination of managing to benefits and the dependencies that exist because of those benefits creates a complex set of relationships between all portfolio projects. Portfolio management must continuously ensure those relationships are effective if the portfolio is to succeed. Strategic execution, delivering projects based on outcomes instead of outputs, is the only way to keep project teams focused on achieving goals and objectives. Overcoming years of history where projects were considered successful if they finished on time, budget, and scope isn't easy, but it is necessary. Success comes from business performance.

Managing change ::

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- If you have been involved in projects in any way, you know that change is inevitable. That's true within portfolio management as well, and there are three distinct reasons why change happens within the portfolio. The first is simply because the goals and objectives change. The portfolio is created to deliver the business goals, and projects are approved to achieve that. Business needs change over time as new threats or opportunities arise, and sometimes one or more of the goals for the year have to be revised. When that happens, the portfolio must be adjusted to deliver on those new goals, which in turn, changes projects. The second reason for change is because the projects being delivered in the portfolio experience variances from expectations. In some ways, this is similar to the project change you may be familiar with, but here, we're concerned with the ability to meet the expected contribution to goals not variance from schedule or budget. If a project in progress can no longer deliver value, whether because of internal or external factors, then it must be changed or possibly canceled and replaced. The third reason for change is actual benefit shortfalls in the portfolio. In this case, we're looking at completed projects and the real benefits that are being seen in the business. The market share achieved, the revenue generated, the cost reduction that occurred, et cetera. If those benefits are different from what was expected, then adjustments must be made to other projects, those in progress or not yet started, to ensure the overall portfolio still succeeds. The process for change management in portfolios is also different. In projects, changes are generally proposed and assessed by the team, then submitted to stakeholders for formal approval. Portfolio management owns both the assessment of options and the approval of change, so the process can be more effective and efficient. Ownership of change doesn't mean no one else is involved. Leadership owns the goals and objectives, and will adjust them if necessary. They will communicate those changes to portfolio management, which must then integrate them in the portfolio. Individual project managers are closest to the work being done, so they're also involved in change management. They're the first to see the need for change within the projects, and they're the best people to identify the specific change needed. In portfolio management, project managers are empowered to make those changes without external approval. They act as proxy for the portfolio manager and communicate changes to the portfolio manager, who in turn, ensures leadership is aware. This results in responsibility for most change decisions being delegated to project managers, while accountability stays with the portfolio manager. The portfolio manager still makes major decisions and ensures all teams are aware of the need for changes coming from other areas. But they rely on project managers to handle the details. This makes effective communication and trusting relationships between those roles absolutely critical.

Benefits and variance management ::

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- Benefits realizations is the final, most important, and, often, most ignored part of portfolio management. When a project is finished, the deliverables are handed over to the business area that will earn them and project resources move onto something else. It is then up to that business area to deliver the benefits. Benefits management is the process of comparing the actual benefits achieved with the expectations in the business case and addressing any variances. Precise measurement of benefit can be difficult, and that's the main reason benefits management is often ignored. However, difficulty is no excuse. How benefits will be measured should be defined and accepted in the business case, then implemented when the project is complete. It can as simple as changing the department's cost or revenue projects of next period, or as complex as detailed tracking of individual features to individual dollars. There are many ways to track benefits. From a numerical or objective point of view, you can use things like revenue, profitability, market share, number of items produced in a given time, or time taken to complete. There are also subjective measures. They aren't as exact, but they're just as real. These may include surveys of customers or employees, an interpretation of reaction, related measures, if staff turnover drops, employees are probably happier, for example, and simple anecdotal evidence of performance. The relationship between benefits owners, the people tasked with delivering the business results, and portfolio management is critical. These two functions have well-defined roles, but they must work together. The benefits owner is accountable for achieving the benefits committed to in the business case. Portfolio management is accountable for identifying variances, positive or negative, and adjusting the portfolio in response. The purpose of the portfolio is to deliver the organization's goals and objectives. When a variance occurs between actual and expected benefits, the ability to achieve those goals is impacted. If a project is expected to cut costs by $3,000,000 and only ends up saving the business 2,000,000, that leaves $1,000,000 short for that has to be managed. To try and recover, the portfolio manager needs to act. Changing projects underway, reprioritizing scheduled work, canceling and replacing projects, or starting new ones. In most cases, there will need to be multiple adjustments, each helping to recover part of the variance. In all cases, the portfolio manager will quantify the size of the gap, consider all options to recover, and then commit to the changes that combine the best chance of success with the least disruption to other work. The focus is always to ensure all business goals are achieved. Positive variances over delivery of benefits have to be managed just as much as negative ones, because they may create opportunities to redirect effort to areas where challenges exist. In this case, portfolio management is looking for any projects that can be cut back, accepting a smaller contribution from them. These lower benefits can be accepted because of the positive variance that has occurred, and it will allow people or money to be redirected to projects that are in trouble. Benefits realization is the only way the business can confirm it has achieved its goals, and it's the only way projects can succeed. When the business doesn't measure benefits, or act on the differences, it's accepting failure, and that's undermining the portfolio.

Managing the lifecycle ::

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- Portfolio management isn't a series of individual processes aligning different areas of business-planning and project delivery. It's a single, integrated approach to connecting strategy with execution to achieve business goals. Only when all of the different elements, from idea capture to benefits achievement are managed together, can the chances of success be optimized, kind of like a jigsaw puzzle. This overarching strategic approach supports the achievement of organizational goals by connecting every step with the overall journey of delivering business benefits. When businesses fall short of their goals, it's often because they're unaware that some of their actions are hurting their chances of success. Commonly, teams or individuals do what they think is best. But if they're operating without the full understanding of how their work contributes to business success, they'll inevitably make mistakes. Consider a situation where a project is late and over budget. Project management on its own may cut features to reduce costs and save time so the project gets back on track. From a portfolio standpoint, that may be the worst thing possible. The project's output may still be able to deliver business benefits even if it's late and costs more than planned. But without the features that have been cut, it may not be able to succeed. Portfolio management builds alignment between all work elements and prevents that from happening. Effective portfolio management must connect business leadership with project delivery teams at all levels. Leaders determine the goals and make major planning and directional decisions, so they're critical to providing direction to portfolio management. However, the work to travel in that direction to deliver the business benefits lies with the individual project teams. Portfolio management must be able to guide and lead those teams to deliver their expected benefits, or the goals can never be met. That in turn requires strong relationships with all business areas. It's not enough for portfolio management to have good relations with IT as the major project area within the organization. An enterprise-wide portfolio can impact every department and every project team. There's an exercise file with this lesson, a simple template with each of the phases of portfolio management, idea generation and capture, business casing and analysis, capacity and capability planning, selection and prioritization, strategic execution, managing change, and benefits and variance management. There is room next to each phase for you to fill in all of the portfolio management activities associated with the phase in your organization. I've also included a completed version of the template so you can compare your answers with mine. Don't worry if they aren't exact, some tasks can fit in different areas, and some may not apply in your organization. You may also have additional or different needs, however, you should find that your answers have similarities to my list. They should seem as though they could be part of the same job description. When you implement portfolio management, you do so through a series of different processes and stages, however, to ensure the most effective and efficient approach, you must manage those different elements as part of a single end-to-end lifecycle where all the pieces and all the people are working together.

THE ROLES IN PORTFOLIO MANAGEMENT  ::

1. Portfolio Manager
2. PMO
3. Leadership
4. Project and Program Team

Portfolio manager ::

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- There are a number of roles critical to making portfolio management successful but the portfolio manager is the single biggest difference maker. You might think a portfolio manager is some kind of super project manager but that's not true. A portfolio manager is a business leader, not a project leader. Projects are the tools by which the portfolio achieves success but those are managed by project managers. The portfolio manager operates at a more strategic level, managing business investments to deliver business results. A successful portfolio manager is likely to have both business management and project management experience but it's far more important for them to have business skills and judgment. The level of knowledge and project management that a portfolio manager needs can be taught. That business excellence can only come with time and experience. From being part of the annual planning process where proposals are developed and reviewed, to working with business units to ensure benefits are achieved, the portfolio manager is leadership's representative in delivering strategy. They operate with the authority of the executive team and they're ultimately measured by their ability to deliver the organization's goals and objectives. The vast majority of the portfolio manager's work is based around communications and collaboration. They must work with functional departments on everything from developing ideas to delivering benefits. They align with project management offices, or PMOs, in all parts of the organization to plan and execute projects, and, of course, they work very closely with the program and project managers leading individual initiatives within the portfolio. On a day to day basis, the portfolio manager is involved in monitoring portfolio performance and assessing variances. This requires many discussions with business areas and project teams around the impact of problems, the ability to recover, the need for any corrective actions, etc. They'll also be reviewing the outcomes of their decisions, ensuring the corrections are actually working. The portfolio manager will meet with leadership regularly. These meetings will center around changes that are being considered to the business goals and the ability to adjust the portfolio in response. The portfolio manager must be able to assess how such changes could be made, along with the implications, and the ability to deliver planned and current projects. Organizationally, the portfolio manager may report to a chief strategy officer or similar. Often, it's part of a strategy office. This may be combined with an enterprise PMO or EPMO, as the roles are very closely aligned. If your organization doesn't have a dedicated strategy function, then reporting to a general management position is fine, the chief financial officer or CFO, chief operating officer, COO, or similar. The role must be senior enough to have credibility and influence. It should also not report to a single line of business, a chief information officer or CIO within IT, for example, as it needs credibility in all functional areas. The portfolio manager has one of the most important roles in any business. While the best portfolio manager can't guarantee success, choosing the wrong person for the role goes a very long way to committing the business to failure.

PMO ::

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- From a portfolio management standpoint, how the Project Management Office, or PMO, works is far less important than what it does. Regardless of the model being used, PMOs exist to support effective project delivery. And portfolio management relies on that effective delivery to achieve results. There are many different approaches to PMOs in use today. Many businesses also have multiple PMOs, department specific, an enterprise or EPMO, and a center of excellence for coaching support and process improvement for example. For portfolio management to be effective, all of the PMOs directly associated with project delivery must work together, creating a network of interrelated PMOs. The model the organization uses and the number of PMOs they have doesn't matter. But every PMO must have a clear mandate from leadership, a purpose, and a set of goals that is managed towards achieving. That mandate must include portfolio management support. This is necessary to provide consistency across all portfolio projects. PMOs provide support both down into the project teams working on portfolio initiatives and up to the portfolio manager. Both of these require the same consistent approach. From a project standpoint the down part of the support your PMOs have existing relationships with the project managers. This means they're able to assist in resolving difficulties, developing solutions, etc. They will also be able to help explain the purpose of projects to their teams, the way the project will help you achieve your business goals. PMOs also act as an early warning system for any portfolio problems. A single PMO will have visibility to all the projects in the department it covers, giving a broader view of problems than a single project manager. When all of the PMOs collaborate, this visibility extends across all projects within the portfolio, acting as a strong risk management function. Support up to the portfolio manager comes in multiple forms. PMOs can assist in developing solutions to portfolio issues, support the idea generation and business case processes, and provide their expertise to capacity and capability planning. These may be as individual PMOs looking after the interest of the department, or it could be collectively across the organization. Just as there are many different types of PMO, there are many different approaches to portfolio management support by PMOs. There's no single rule of what they must do or how they must do it. But, if the PMOs are not a key element in the portfolio management approach the business will struggle to deliver results.

Leadership ::

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- Without leadership, there will be no portfolio and no portfolio management. As the leaders of the business, your executive team, department heads, et cetera have to commit to the concept of portfolio management in the first place and they need to back that commitment with financial and people resources. They also have to allow time for portfolio management to develop and evolve. It doesn't succeed overnight. The setting of goals and objectives for the business is no longer a once-a-year process, or at least it shouldn't be. While the development and review of your company's strategic plan and the setting of targets for the next financial period likely still happens annually, those targets must be continuously reviewed. All businesses operate in a rapidly-changing environment. That environment will influence the ability to achieve current goals and create opportunities to set new ones. If your leadership does not recognize this evolving environment, they will fail. You may deliver a perfect portfolio achieving all the goals and objectives that have been set, but if those goals are no longer appropriate, then nothing is gained. It's therefore crucial that leadership monitor the environment the organization operates in. This assessment covers several areas: the impact of actions by competitors, regulators, and suppliers; shifting customer demands; and new opportunities created by advancing technology. Evolution in any of these areas requires consideration of changes and updates to the goals. Those changes reflect the fact that the original goals may no longer be achievable, or they may seek to leverage new opportunities that didn't exist previously, or both. Leadership also needs to be engaged in the ongoing management of the portfolio. If they show no interest in the way the portfolio is managed, they send a message that it isn't important. That attitude will soon spread across all areas of the business and to all staff working on portfolio projects. Leaders must not only review progress regularly with the portfolio manager, they must make it known that those reviews are happening. If your project teams know their work is being monitored by the executive team, they'll be more engaged, more committed to success, and they'll feel their work is important. But that involvement in the management of the portfolio does have to be limited. The executive team, both collectively and individually, must avoid getting too far into the weeds of how the portfolio is managed, leaving the portfolio manager, project management offices, and project managers to handle the details. It could be tempting for leaders to try and get involved in resolving problems or offering ideas for how work should be done, but this undermines the authority of the people tasked with doing that work. Leaders must trust the portfolio manager to handle the day-to-day management activities. The portfolio manager will then conduct regular reviews with leadership, as well as engaging them when key decisions are needed, and to discuss evolving goals and objectives. If leaders can't trust the portfolio manager to do his or her job, then they've made the wrong choice for the role. If business leaders aren't engaged enough, the portfolio will deliver against outdated priorities because the evolving environment has not been recognized and responded to. If they're too engaged, the portfolio may not be given the freedom or time to deliver anything. Neither of those situations will result in a successful portfolio.

Project and program teams ::

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- In many ways, project managers and their teams are impacted the least by portfolio management. The mechanics of the work they do is largely unchanged. They still have to deliver their projects effectively and efficiently, just as they always have done. The major difference is the focus they have while doing that work. Project teams in a portfolio management setting are focused almost exclusively on enabling benefits. The deliverables are far less important. Traditionally, projects are approved to deliver a certain set of features by a given date and for a fixed budget, the triple constraint of scope, schedule, and cost. But that's too restrictive for a portfolio. It ignores the reality that what is approved for the project to deliver before it begins may not be what is best to deliver the required business results by the time the project finishes. Instead, the scope, schedule, and cost must be allowed to evolve. This helps ensure what is ultimately produced has the best possible chance of delivering the expected benefits. This shift still requires all of the tasks we associate with project management to happen, planning, executing work, monitoring progress, managing risks and issues, et cetera. However, all of those activities must be looked at differently and that requires a change in the mindset of all team members, increasing some elements, decreasing others. Think about the projects you have been a part of in your organization. Everyone assumes that the project specifics are locked. They're requirements, not suggestions. Even if you use Agile approaches for some of your projects, Scrum, Combine, or similar methods, most of the ability to change is focused on how the work gets done, not what it is you're doing. In portfolio management, all of that changes. The team not only questions the specifics, they change them. They adapt the what of the project as many times as needed to ensure that the final handoff to the business owner is as well-aligned with the benefits as possible. Those changes can impact any part of the project, the features, schedule, resources, or approach. The team is empowered to make any of these changes without having to gain outside approval first. They're the closest to the work and the best able to make the decisions. Instead of formal change control, teams drive the change, asking for forgiveness, not permission, minimizing disruption by making the change as quickly as possible to maintain the ability to deliver business results. The team is protected in this approach by portfolio management. They are empowered because that is the best way to keep the work done aligned with the reasons for that work. However, teams do need to ensure such adjustments are communicated. This one of the biggest practical changes portfolio management brings to project teams and in particular for project managers. More communication with more stakeholders. Project managers must ensure all portfolio stakeholders, the portfolio manager, benefits owner, related independent project teams, are aware of how the project is evolving and what such changes are occurring. The project manager must also be prepared to defend their decisions where required. While these seems like fairly small adjustments on the surface, the impact is considerable. Project managers and teams need to be given the skills and confidence to earn much greater decision making on their projects and all of the stakeholders need to trust the teams to make those decisions.

IMPLEMENT PORTFOLIO MANAGEMENT  ::

1. Understand the current state
2. Establishing priorities
3. Measuring and Adjusting
4. The role of culture

Understanding the current state ::

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- Before your organization can implement portfolio management, it must decide where it will start, how it will go about the roll out, and how it's going to measure progress. The first step to implement portfolio management is to understand your current situation. You already do some of the things involved in portfolio management. You execute projects and conduct some form of project planning and selection, for example. You may not be doing these in the way you want but they are happening. Other aspects of portfolio management will be completely new to you. Do you start by improving what you already do? Or is the first step to add something that isn't being done, yet? This is what your assessment needs to establish. Because of the amount of work and potential disruption involved, you cannot implement end to end portfolio management in one step unless you put your entire business on hold, and that's not realistic. So, you must prioritize work that will deliver immediate results but that can still be done in addition to other projects. The first step in identifying those items is to look at your current strengths and opportunities. That must be done in the context of business performance. What you execute well from a process standpoint isn't important. What consistently delivers business results is. You'll need to involve all areas of the business in this assessment, and of course, you need leadership approval to do the work. I've included a template that provides a matrix of the different portfolio management elements with entries for what you do well, what you need to improve, and what you don't currently do. Completing that will help you understand your focus areas. Once you know where you are struggling, what you're doing well, and what you aren't doing at all, you can start looking at your ability to make changes. This is the second part of assessing current state and it's potentially the more difficult aspect. Some of the items you identify will be too difficult to achieve. Some will be too expensive or consume too many resources. And some just won't make a big enough difference to the business. Those changes need to be eliminated from your list. They may still be important but they aren't the things that you're gonna focus on, first. That will leave you with a list of things you can potentially achieve in the next period. These will represent a subset of the opportunities and challenges you face, and will be improvements that make a difference, have a good chance of success, and won't detract from other projects. Successfully completing some of these items will demonstrate your ability to improve business performance through portfolio management. Your leaders won't invest in portfolio management if they don't see results. Accurately assessing the current performance of your portfolio management related activities is critical. It creates the foundation that you build from. If you get it wrong, it's like approving the wrong projects in a portfolio. You'll never get the results you want. Get it right and you're well on the way to success.

Establishing priorities ::

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- Because you can't implement every aspect of Portfolio Management in one go, you need to prioritize the areas where you're going to start. The good news is this prioritization is already an element of Portfolio Management. It ties into both capacity and capability planning and also project selection. So effectively, even before you're formally implementing Portfolio Management, you're improving your skills in key portfolio areas. The raw material for your prioritization work will come from the assessment of the current state of Portfolio Management-related work in your business. That will have given you a list of processes, approaches and methods that either need to be improved, or that you aren't doing and you have the ability to do something about. Those items must also help improve business performance. But, that list will likely still contain more work that you can do with the resources available in the first phase of your Portfolio Management rollout. That means you need to prioritize those items. The first step is to establish your capacity for work. How much can you get done? Your organization will already be committed to doing a number of projects, and resources, and therefore the money will already be assigned to those projects. You need to understand how much is left, and how much you can do with it. This is your total capacity for additional work. Next, you need to determine the order of importance of the work items. This is a balance that considers the benefit of doing the work. How will the business be better if you implement one particular aspect of Portfolio Management? The timing of the benefits. How quickly will people see the improvements? This is particularly important early on as it will drive continued investment. The cost of doing the work. How much of the available resources will each item take up? The chances of success. How likely are you to be able to achieve the business benefit? You also can't ignore things like who will benefit. Some stakeholders are more important than others. However, these less objective criteria should only be considered as tie-breakers for the objective measures. Based on the results of this analysis, you'll have a prioritized list of items based on business needs, ability to deliver, and contribution to performance. You need to cut off that list when the total amount of work involved, plus a safety margin for contingency approaches the resources you have available. Your leadership team needs to review and approve that list, confirming their agreement with your prioritization. You shouldn't need to do formal business cases if the organization is already committed to implementing Portfolio Management, but you must establish expected business benefits to judge performance against once the work is complete. The nature of the benefits will depend on the areas you're addressing first, but you should be considering things like better alignment of projects to the corporate goals, improved performance against those goals, fewer issues with resource capacity and capability, greater measurement and accountability around business benefits, etc. Prioritizing your Portfolio Management implementation is crucial. Not only does it help avoid over-committing, it also provides focus for all areas of the business. Everyone knows what is important, and why. Ultimately, that will help keep everyone aligned with improving the organization's ability to achieve results.

Measuring and adjusting ::

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- As long as you fully access your current environment and correctly prioritize the areas to address, the process of implementing portfolio management improvements will be fairly straightforward. It's just a process improvement type project that your business has done many times before. The hard part will be determining how successful you've been. Because portfolio management is a strategic approach, the different elements happen less frequently than many of your other business processes. Even in today's fast-paced world, you may only be executing some of these steps on a quarterly basis so trying to get evidence of improvements takes time. But it is very important to look for that evidence as soon as possible. The earlier you identify problems, the easier it is to address them. The danger is that early results may not be reliable indicators of what is happening. It takes people time to adjust to new ways of working and that adjustment may make things temporarily worse before they get significantly better. To avoid making knee-jerk corrections to problems that don't really exist, you must put more weight on subjective metrics when trying to measure the early changes that are happening. Here's an example of what I mean. Supposed you've decided to increase the focus on strategic project execution. You've asked project managers and teams to prioritize delivery of benefits instead of the triple constraint and you've provided coaching, training, and skills development. The first few projects will likely see more variances from scope, schedule, and budget, but they won't necessarily show evidence of better performance against goals. It may seem like things aren't working. But what do the teams and managers think? What are the business owners who have achieve the benefits think? If they have positive feedback then you can be confident things are in the process of getting better, the apparent worsening is just the inevitable period of adjustment. That doesn't mean you do nothing in those early days. There may be measurements of performance that show things are much worse and there might be feedback that people hate some of the changes. You need to work with all stakeholders to interpret the objective and subjective measures separating the real problems from the temporary bleeps. When it comes to changing what isn't working, don't be afraid to experiment. Try different approaches based on feedback. Then measure again and get more feedback. With longer periods between cycles, this is the fastest way to get to the best solution and it lets everyone involved feel as though they're contributing, increasing their sense of ownership and engagement. If you think your portfolio management approach is perfect the first that you roll it out, then you're not measuring properly. Every improvement you make is an opportunity to learn more and improve things further. Today's best practice is tomorrow's outdated process. That just means you've got a modern adaptive approach.

The role of culture ::

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- [Instructor] Organizations talk a lot about changing their culture. In reality you can't do that. What you can do is to change how you act, the way you operate, and what you focus on. Cultural change is an outcome of that, not an enabler of it. Culture is a critical element of Portfolio Management success. But to achieve the right culture, you need to start with the right behaviors. The first step in achieving that is to deliver consistency. Portfolio Management spans every business area of an organization. And that means there are a lot of stakeholders. All of those stakeholders must buy into the concept of Portfolio Management. They must also maintain that commitment when things aren't going the way they want. Until the practices and processes become comfortable and familiar to the people using them, they can easily be undermined. If an individual doesn't achieve the outcome they expect, if a team struggles to accept their new accountabilities, or if a stakeholder doesn't understand how they benefit from the new approach, they'll question the process. Any inconsistency in support or questioning of the merits by leaders and senior stakeholders, will jeopardize the ability for Portfolio Management to deliver results, because it will validate those concerns from the people doing the work. That will result in employees not being committed to making it work when they hear their stakeholder suggesting it isn't worthwhile. That doesn't mean there can't be criticisms. But those criticisms must challenge specific issues, not the overall idea of Portfolio Management. From a practical change standpoint, Portfolio Management must enable a shift in how projects are delivered. Planning needs to be more objective and inclusive. Project management must be focused on benefits instead of the triple constraint. And benefits accountability has to mean something. Until these changes and more occur, not only will the impact of Portfolio Management be limited, there will be conflicting messages sent to those doing the work. The culture can never shift unless everyone understands how they must work to align with the new approaches and commits to making that happen. Portfolio Management is not a goal in and of itself. Rather it helps to move the organization closer to an enterprise focus on business value. That means recognizing that projects are not approved, managed, and delivered because of their outputs, but because of what those outputs make possible for the business as a whole. This concept of business value, and of constantly working in all areas to optimize it, is what ultimately leads to the concept of business agility. Effectively and efficiently responding to an evolving operating environment. Creating an agile business provides a significant competitive advantage. But it's an ongoing commitment for the entire organization. A cultural change. And it requires effective Portfolio Management. When Portfolio Management is in place and evolving, it provides a framework for business value focus project delivery. When all stakeholders support that consistently, the culture of the entire business will gradually shift. And that's what makes the difference.

CASE STUDY  ::

1. Case Study : Bringing it together
2. Review of project issues & groups
3. Review of Underlining issues 
4. Review the step for proposal and wrap up

1. Case Study : Bringing it together ::

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- Now that we've covered the foundations of portfolio management, let's apply it to a real-world example. Together, let's look at a company that doesn't use portfolio management techniques, but has found some success through project management. We'll consider some of the challenges and opportunities they face and develop a plan to implement improvements and gain leadership support. I've provided the scenario as well as the worksheet and answers we'll be working from in the exercise folder. Throughout this process, I want you to think about how some of these ideas apply to your organization. Do you have similar challenges and opportunities? Can see yourself having similar conversations with your leaders? Will some of the solutions work for you? Let's walk through the scenario. Company ABC is fairly successful. They're profitable, well-regarded by customers and employees and have products that do well. However, there are a few issues. In the last few years, competitors have been slowly gaining ground reducing the company's profits and market share. Employee turnover has been increasing and employees don't seem as satisfied as they used to be. Customers have started to complain that the company isn't introducing new features and capability as fast as other vendors. At the same time, the leadership team is noticing a few things in how projects are delivered that are concerning them. In particular, the company consistently approves more projects than it can deliver. The business case projections never seem to be accurate. There are a lot of changes to projects after they are approved and a lot of projects never seem to deliver but they're not canceled either. Business areas complain that project deliverables are out of date or no longer relevant and project teams don't understand why they are asked to do a particular project. No one seems to know whether a particular project is able to deliver the expected business benefits and there is no single consolidated view of project work. Imagine you are head of the company's Enterprise Project Management Office or EPMO and you've been asked by the Chief Financial Officer, the CFO, to develop a plan that will help address some of these issues. You are familiar with portfolio management and you think some of the aspects of it will be able to help you here. There is quite a lot going on at this organization. There's information here that may identify issues the company is experiencing. Some of them are stated. Some are implied by what else you know. Take a look at question one on the case study worksheet and see how many project-related issues you can identify. There are also some indications of how those problems are impacting business performance. Competitors are strengthening. Employees are less happy and customers are losing faith. You need to do something to prevent these problems getting worse and that's what the CFO is asking you to do. Take a look at question two and identify who needs to be involved in pinpointing how to solve the problems. Think about your own organization and the roles involved in these items. All of them need to be part of the solution.

Review of project issues and groups ::

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- We're putting our portfolio management knowledge and training to the test by looking at a company that doesn't use portfolio management techniques. If you haven't already done so, please download the exercise file, read the summary of the scenario and answer questions one and two on the case study worksheet. Now there's a little cheat sheet where I've provided my answers, and that's what we're gonna review right now. That being said, it's okay if your list is slightly different. Many of the answer for question one came straight from chapter two where we looked at the elements of portfolio management. But you may wonder where I got the lack of centralized reporting or tracking from. The scenario mentions that there is not consolidated view of the project work, and that means there's no way to get an overall portfolio perspective. Tracking all initiatives in your project or portfolio software is important if you're going to be able to get that combined view of everything. It also helps management to look at the entire view of the portfolio, not just individual projects. We haven't spent a lot a time looking at the number of projects because there is no easy answer to that. It depends on the organization's size, whether they're growing or consolidating et cetera. But if the company is approving more projects as is the case here, than it is delivering, then it is trying to do too much. People are being stretched too thin and the efforts are being wasted. Looking at question two, most of the groups are straightforward, they came from chapter three of the course with just a little more detail. Benefits owners are listed separately even though they may be department heads or leaders because their role is critical to success. And don't forget to include customers. They can provide you with great insight into where you need to focus. Companies that work with their customers always have a better understanding of the needs those customers have and that makes it much easier to deliver solutions that will achieve the revenue, market share and profitability goals. Now you have your list of problems and stakeholders let's take a look at question three. What underlying issues are likely to exist in this business? Try to come up with a list of items that could be improved in how the organization conducts projects. This is the most important part of the analysis you will do in your own business. Working with stakeholders to look at the evidence of problems you have and identifying the underlying issues that they reveal.

Review of underlying business issues ::

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- We're reviewing what we've learned about the foundations of portfolio management by looking at a case study for a company that isn't using portfolio management concepts. If you haven't done so already, please download the exercise file, read the summary of the scenario, and answer question three on the case study worksheet. By combining the elements of portfolio management from chapter two with the roles from chapter three, you should've been able to identify a number of potential underlying issues. All of them are important, but I think one of the problems that is often missed is the inability to adjust business goals to reflect changing circumstances. Leaders often fail to realize the implications of those changes, so make sure you flag any issues there in your business. It's also very important to have a consistent approach for all business areas. You need to plan across the entire business, otherwise you have pockets of work that are missed or managed differently, and that will cause confusion and missed problems. Finally, you must ensure you flag the lack of accountability for benefits as a problem. I know this can be hard. It's why so many businesses don't do it. But it's the only way you can actually ensure you achieve your goals. At a minimum, you must make sure expected benefits are included in the business case along with how to measure them. This gives the project manager something to manage towards and it's the basis for accountability for the benefit's owner after the project is completed. Once you have your list of gaps, issues, and opportunities, you need to develop a plan to address those issues. That, in turn, requires you to prioritize them based on how they're impacting your business and how easy it will be to implement solutions. Or stakeholders will contribute to that prioritization process, and leadership will ultimately approve it and fund the work. Now, take a look at question four, and try to put together the key steps in the plan to do that. Starting from the point where you will have identified the list of gaps and opportunities, build a plan that results in a proposal to leadership to begin implementing portfolio management as a solution to the issues.

Review of steps for proposal and wrap up ::

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- To conclude the application of the portfolio management concepts we've learned, we're going to look at question four in the case study. If you haven't yet done so, please download the exercise file, read through the summary, and have a go at answering question four. The steps I included in the completed example are based on chapter four where we looked at the work to start implementing portfolio management. Remember, the goal of your plan is to secure investment for the first phase of the work, so make sure that's your focus. Give your leadership every reason to approve your plan. Make it realistic and reasonable with tangible benefits. That will help secure further investment in the future. Also, make sure it doesn't use more resources than are available. The other projects still have to happen. I included the identification of all required stakeholders in my plan because that will ultimately help to make the project successful. If people are involved in building the plan, they'll be invested in its success, and they'll be more likely to support you when the project is underway. This answer is one where you may differ more considerably from my list. Your plan needs to work for your organization, so it's fine to have items that are unique to you. Just make sure you follow the same overall flow of understanding issues, identifying feasible solutions, and prioritizing those solutions. When you've done that you'll have a great chance of getting the project approved. And then you can start delivering improved business performance through portfolio management.

Next steps ::

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- Portfolio management is an increasingly important discipline for businesses today. Connecting strategy with execution is becoming the primary focus for project delivery. And portfolio management is necessary to ensure that happens consistently. Portfolio management connects many different aspects of project planning, delivery, and adjustment and provides a single integrated approach that dramatically increases the chances of success. In this course, you've received the basic building blocks of portfolio management and had a chance to think about applying it in your own organization. Combined with an understanding of how project and program management is conducted in your business and how the project management office or PMO model works, you'll be able to identify ways you can improve your organization's business performance. Sites like projectmanagement.com will provide you with additional ideas on not just projects, but also PMOs and portfolio management. There are also many authors providing thought leadership on LinkedIn and with a #pmot on Twitter. Portfolio management is critical to business success. And in the next few years, it will be one of the most important growth areas in project execution. My hope is you now have some of the skills you need to take advantage of that opportunity and to help your employer succeed.