Good portfolio management can help businesses achieve greater value making it a vital tool for success. It can help you make better decisions, execute strategy and manage change across the organization. It takes a few simple steps to adopt best practices in product portfolio management.
Involve everyone
PPM is an ongoing activity and not a one-off event. It is all encompassing. Good portfolio management will involve people across the organization. With the buy-in of the wider audience, its chances of being more effective are higher. Business leaders may not take kindly to having their control relinquished to a more democratic approach. Nor will they like having their work closely scrutinized. Be sure to get them on board for good portfolio management leadership.
Have a clear portfolio management process
All projects must be evaluated for their contribution to business value. If it adds little value to the customer or long-term strategic objectives it is likely to fail. Update the databases regularly so all information is current and gives you an eye on ground realities.
Lay out clear performance measures
Cluster based on goals or purpose. Have multiple portfolios to distribute funds appropriately and help simplify decision making. When objectives are laid down, it is critical to also have parameters to track the extent to which a goal has been met. The models and parameters may need to be updated as the information and understanding improves. Have a scorecard for senior management to evaluate performance. This scorecard must cover financial and non-financial parameters.
Recognize risk
Project Portfolio Management leaders know they need to factor in risk. Knowing the possible outcomes and risks allows businesses to prepare for various eventualities. Risks at the portfolio level must be clearly identified and quantified. A system to manage the risk must be put in place.
Have a strong analytic software or tool in place
A templatized data tracking software with robust graphical and reporting capabilities help enable quick decision making. A dashboard view with access to all relevant stakeholders allows for a snapshot view of the scenario. Such analytic tools must also allow you to drill down to a project level. This helps improve transparency and ensure that everyone is kept up to date on all decisions. It also allows you to track the impact of a decision centrally.
Actively manage the portfolio. After initial approvals, schedule regular reviews. This allows you to shut down derailed projects and stem the financial loss.
