{"id":5978,"date":"2015-09-09T17:23:45","date_gmt":"2015-09-09T22:23:45","guid":{"rendered":"https:\/\/blog.planview.com\/?p=5978"},"modified":"2018-08-09T09:09:53","modified_gmt":"2018-08-09T14:09:53","slug":"what-is-portfolio-management-why-you-need-it","status":"publish","type":"post","link":"https:\/\/blog.planview.com\/what-is-portfolio-management-why-you-need-it\/","title":{"rendered":"What is Portfolio Management? (And Why You Need It)"},"content":{"rendered":"

Portfolio management is different from project management in that it encompasses the entire lifecycle – from ideation through the realization of the benefits it set out to provide. Portfolio management includes project management as a phase of the project lifecycle which focuses on, and is best at, the execution phase of a project. But as we all know, projects are more than just tasks and issue solving. Projects truly begin at the ideation stage and although some do not make it through execution to the realization of benefits of the investment, portfolio management accounts for that entire process.<\/p>\n

Let\u2019s take a look at the lifecycle of a project that is reflected in portfolio management: Ideation stage, creating a business case, prioritization of the initiatives that warrant investment, selection, planning the process and resources to carry out the initiative, execution of the initiative, and ultimately ROI. For each stage, there is a process, and IT leaders understand that while some projects are inevitable, others are strategic. And the strategic ones are the ones that make the difference. <\/span><\/p>\n

Portfolio management is important in business because there are factors to consider that affect the success of the project, and thus the organization, as well as unexpected benefits from the investment. For example, sometimes it is what a Project Management Office (PMO) chooses <\/span>not<\/span><\/i> to do that is the most important. By prioritizing and consciously choosing <\/span>not<\/span><\/i> to undertake projects that do not benefit the business or take away from time and resource capacity from higher priority projects, PMOs become more efficient and are better able to focus on the projects that matter. This focus results in better and faster execution or project management. \u00a0<\/span><\/p>\n

Many projects also begin by supporting overall business goals and for one reason or another, by the end they no longer serve that value. Either the business goals have changed, more important things have come up, new technology has come out that changes the project (this especially happens in product development projects), or the project has simply lost value because the main stakeholder is no longer a stakeholder. For any of these reasons or others, projects often change directions, and organizations need to adapt along the way. By managing projects as part of a portfolio, the dynamic changes because you enable the <\/span>portfolio<\/span><\/i> to be successful – even if some of the projects in it fall short – and help drive the desired outcome for your organization. <\/span><\/p>\n

Here are a few benefits when moving to a portfolio management approach:<\/span><\/p>\n

Strategic Alignment<\/b><\/p>\n

Portfolio Management is an inherent way to strategically align your projects with the goals of the business. As you map out your portfolio and your resources that are to be assigned to certain projects, you make sure you they are the projects that support the needs of the business. However, we know this changes as you go along and you need to adapt. By managing a portfolio of projects, it becomes easier to identify the projects that are better suited to meet your needs, and reduce the investment or abandon projects that no longer serve the needs it intended to. In doing this, your business benefits from investing in projects that are the highest likelihood of added value and ROI. <\/span><\/p>\n

Strategic alignment is especially strong in top-down portfolio management approaches. Top down is an \u201calignment-first\u201d approach to portfolio management where requests are only accepted if they are aligned with business goals. Projects are prioritized and resources are assigned based on those prioritized projects, and executed from there. Essentially, planning and reporting are the critical elements where goals are identified and benefits are realized. Conversely, bottom up portfolio management puts the emphasis on the execution of projects, making sure tasks are executed, and thus increasing project success through individual contribution. In either case, by managing projects in a portfolio, you have the advantage of executing the right projects for the business.<\/span><\/p>\n

Resource Management<\/b><\/p>\n

Resources are an organization’s most valuable asset; and also the biggest challenge more often than not. Managing those resources in an effective, efficient, and optimized manner is extremely challenging. For most organizations, resource management is one of those things that may be done \u201cwell\u201d but you always feel like it could be \u201cbetter.\u201d For better resource management, managing a portfolio is much easier to think about. You can see resources across the portfolio, utilization among various projects and across applications. By having a good understanding of what resources are actually up to and a realistic representation of what their utilization looks like, project resources becomes much more manageable from a portfolio perspective.<\/span><\/p>\n

Planning and Reporting<\/b><\/p>\n

We all want to know what we are getting out of our investments before we take the plunge. But there is always some degree of risk involved; if all projects were a sure thing, it would take the fun out of managing them. However, some level of predictability is comforting, and by having a systematic way of continuously improving the forecast of the projects with each new addition helps too. With portfolio management, planning for projects (and resources) is continuous and evolutionary as projects progress and people get shifted around. Reporting also plays a big role in this, as you are able to see the results of the plan after it is executed to adjust planning moving forward, and understand the benefits of the investment. Whether you are reporting on different metrics, gaining visibility, or arguing for more resources, having the ability to report on the portfolio as a whole as well as individual projects or programs is a major contributor to business success. According to recent<\/span> Project Management Institute Pulse of the Profession report<\/span><\/a>, organizations that are effective in portfolio management had 76% of projects meet or exceed expected ROI, compared with 56% of project success without portfolio management process in place. And success is what we are all about.<\/span><\/p>\n

 <\/p>\n

By including portfolio management as part of the project management approach, you can manage projects throughout their lifecycle, and against one another, to achieve benefits far beyond what you would get by managing projects in silos or in stages. For more on how portfolio management can give you end to end project management, take a look at our whitepaper on the <\/span>5 pillars of portfolio management<\/span><\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Portfolio management is different from project management in that it encompasses the entire lifecycle – from ideation through the realization of the benefits it set out to provide. Portfolio management includes project management as a phase of the project lifecycle which focuses on, and is best at, the execution phase of a project. But as…<\/p>\n","protected":false},"author":74,"featured_media":5979,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[35],"tags":[467],"class_list":["post-5978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pmo-project-management-organizations","tag-innotas"],"acf":[],"yoast_head":"\nWhat is Portfolio Management & Why Do You Need It? |Planview<\/title>\n<meta name=\"description\" content=\"What is portfolio management & why do you need it? 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