Portfolio management/steering ensures that the right project is prioritised, in line with the strategies and visions
Effective governance is mostly about prioritising correctly between different projects, programmes and other initiatives. This is done in order to secure maximum resource utilization and that the business benefits are optimal.
Resources are often limited and all the initiatives cannot be executed at once. Managing and managing a portfolio creates a balance between your business’s strategic objectives and the organisation’s ability to live up to them, or the delivery capacity of projects and changes. PPS sets the business visions and strategic objectives in the centre, at the same time as the model provides support for everything from strategic steering, business benefit management to effective project steering/management.
A portfolio, in a project context, is a collection of projects and programmes within an organisation, or part of an organisation. In a portfolio management needs to continuously prioritise between the initiatives involved, in order to secure that maximum contribution to the business objectives are achieved. Portfolio steering is responsible for identifying the strategic objectives and the short-term business objectives that are to be achieved. The benefits of on-going projects and new initiatives are continuously evaluated against the objectives that have been set.
Portfolios can be established within different parts of your organisation and therefore for different types of projects and programmes. Projects and programmes that compete for the same resources should be part of the same portfolio. The purpose of the portfolio should be clear. It should be clear which benefits are to be achieved by portfolio management, before it is established.
Management is responsible for defining and establishing the strategic objectives within an organisation. Portfolio management establishes and follows-up on the expected benefits. Portfolio management is also responsible for ensuring that the expected benefits of the projects and the programmes are in line with the strategic objectives.
Prioritisation of the portfolio is done based on the evaluation and weighing of the project’s contribution to the strategic objectives, and the weighing and evaluation of the actions required to execute a project. Portfolio management can then prioritise based on these weighings, the project’s dependencies on other initiatives and on the project status.
The PPS model includes support for establishing and running a project, independent of the size and complexity of your business. PPS Portfolio management gives you the prerequisites to decide on which project and programme you should start, and also gives you a process with which you can prioritise and monitor/follow-up your expected benefits and strategic objectives.