- Portfolio Management
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We all know that, to remain competitive, businesses need to be able to evolve, and that organisations which are best equipped to manage change, in a way that is not disruptive to current ongoing operations, will create and maintain a competitive edge.
Changing your business costs money, of course, hence all change initiatives are investments which, as with all investments, should not be undertaken unless they will provide a ‘return on investment’ (ROI). This is usually evaluated as a business case, based on predicted benefit and cost data, which then enables you to establish the Affordability of multiple selected change initiatives in relation to annual budgets.
But Affordability is not the only important factor in evaluating the Attractiveness of a change initiative. An evolving organisation should create and maintain a business plan to achieve its strategic objectives. Change initiatives which are evaluated to offer the best Alignment to the organisation’s strategic objectives are therefore of greater value.
Projects and programmes have varying levels of complexity, depending upon the environment and circumstances within which they are to be delivered. There will, therefore, be different levels of risks to delivery of the projects and programmes. By evaluating the risks of each change initiative, their Achievability can be established and taken into account when prioritising and selecting which initiatives to deliver.
The first of two aspects of portfolio management is to ensure that you are ‘doing the right projects and programmes’ by prioritising and selecting the change initiatives which are the most Attractive, based on Affordability, Alignment and Achievability. If you are not optimising your change portfolio then you are not investing your money as wisely as you could be.
After you have decided which change initiatives to take forwards, it is then important that they are successfully delivered as projects and programmes, which achieve the expected benefits within the predicted costs (set as budgets). This is the other aspect of portfolio management; ‘doing the projects and programmes right’.
Organisations should create the capability to select and deliver the optimum portfolio of projects and programmes, on an ongoing and ever improving basis, by continuously developing their people, processes and technology to evolve their P3M maturity. By doing so, they will become well equipped to manage change and maintain a competitive edge.
If you would like to know more about my SimplePfM System, which is part of my SimpleP3M System, please contact me at Adrian@SimpleP3M.co.uk