Table of Contents
In the corporate world, project portfolio management acts as the fulcrum of the organizations. It is caused by the fact that a portfolio management department acts as a basis, through which coordination of processes, technologies, and methodologies of team project managers takes place. The whole scope of project portfolio management work includes analysis, evaluation, and collegiate management of existing projects, as well as the ones that have to be launched in the nearest future. As a result, the whole idea of project portfolio management is to ensure that each project is working in coordination with the others rather than against them. It often requires much investigation and planning in the pre project phase so that all the project managers can understand how to work best with the others and how to deal with potential challenges within the portfolio. The best approach towards portfolio governance can be evaluated based on its ability to ensure that each project continues working smoothly without being interfered with by other projects, while also causing no harm to the other projects. The main effort lies in establishing the intersections between the existing projects and ensuring that interconnections do not have negative impacts on one another. Consequently, the best practice approach to portfolio governance should feature explicit considerations with special considerations to the portfolio governance requirements, risk management, the specified definitions of roles, responsibilities, accountability, signatory responsibility, reporting relationships, and performance criteria, as well as ensuring compliance. In addition to that, there is a need to formulate a method of engaging stakeholders through the portfolio management process, which will be deliberated later in the current paper.
Portfolio Governance Requirements
For one to effectively manage the portfolio, a number of conditions must be met within the organization. First, there must be more than one project in place. Portfolio management focuses on the collective rather than the individual projects, therefore, companies with singular projects would not need a portfolio management as a mainstream department (Koh & Crawford, 2012, p. 41). Considering that portfolio governance is mostly a decision making framework for the IT projects in question, there is simply a need to have numerous projects planned within the organization. The role of the portfolio project manager in this case would be to identify and define the best combinations of projects that need to be focused on the company’s specific goals and objectives (Untiedt, Nippa, & Pidun, 2012, p. 264). To accomplish this, the first course of action would be to evaluate the desired project outcomes for each project in relation to the set goals and objectives of the organization. The idea is to ensure that the pursued projects will provide maximum value to the company. Portfolio governance is mostly deals with defining what the organization is struggling to achieve and, thus, deducing the most effective way that can help the organization to achieve it.
Correspondingly, a number of elements define portfolio governance. First, portfolio governance needs to include the specification of rights and responsibilities amongst the numerous parties within the organization. As a result, there is a need for the organization to be well defined, if the desired outcomes are to be achieved (Williams, Jonny, Walker, Andersen, & Morten, 2012, p. 42). Secondly, governance should involve setting the rules of engagement and the acceptable procedures within the organization with respect to decision-making. It is very important for the organization to understand how decisions need to be made and who needs to be involved first. A good grasp of how decisions are made helps prevent conflicts once the projects are underway. Furthermore, the third element in portfolio governance is the definition of the respective company’s strategic framework to enable the decision regarding what projects are the most important for the specific organization (Shao, Muller, & Turner, 2012, p. 39). Without a vivid comprehension on the company’s strategic framework, it would be practically impossible to deduce a portfolio governance strategy within the organization. It is caused by the fact that the portfolio management team will not know which projects to prioritize or to pair as complimentary projects.
Along with the first order offer - 15% discount, you save extra 10% since we provide 300 words/page instead of 275 words/page
The fourth element is considered with respect to efficiency where a major role of the portfolio governance team revolves around ensuring that resources are spent well. The entire organization in this case is monitored and evaluated to ensure that there is no wasting of resources. It is mainly effective when the procurement function is undertaken from a portfolio perspective considering that program management oversees the activities of all projects. Leaving the procurement function to the project managers often encourages wasting resources as most projects end with a great number of resources left unused, while other projects require buying of the same resources (Shao, Muller, & Turner, 2012, p. 41). Lastly, portfolio management must incorporate monitoring as a main function. The planning phase can be considered as the most important phase of portfolio management but there is also a need to monitor the projects and ensure that they correspond to the organization’s expectations (Haji-Kazemi, Andersen, & Krane, 2013, p. 61). All these elements are what qualify a portfolio management exercise to be effective and relevant within a given organization.
Selection of Projects and Programs
Selecting the right projects and programs for the organization, as mentioned above, depends upon the set definitions on the organization’s strategic framework. The portfolio management team needs to be guided by the decisions of the company’s management team, since the organizational goals and objectives are the basis for the selection of projects and programs that will be pursued under the portfolio (Ryan, Kajzer, & Daskou, 2012, p. 580). Therefore, the portfolio management team can only start working after the company has decided on an overall strategy. One major criterion for the selection of such programs and projects is that they must be contributing towards the intended goals and objectives of the organization. For example, if a company is looking to expand its customer base any projects that are directed towards attracting and managing a larger customer base, it can be considered as relevant and, thus, necessary under the portfolio (Ryan, Kajzer, & Daskou, 2012, p. 598). The idea is to ensure that all of the selected projects and programs translate on the company’s bottom line. Correspondingly, selected projects and programs needs to be defined or categorized based on their priority and interconnections. Projects are selected at an initial stage of the portfolio management exercise in order to perform all the preliminary evaluations before the project planning commences at the project management level. The portfolio management is responsible for guiding the project management in terms of timelines and resources, as well as priority and interconnectedness with other projects within the company. The optimization approach in this context would, thus, be to base the entire project and program selection process on the organization’s strategic management decisions as related to the set goals and objectives.
Get order prepared by top 30 writers$10.95
Get VIP support$9.99
Get order proofread by editor$3.99
Extended revision period$2.00
SMS notification of the order status
Get a full PDF plagiarism report
Having identified the projects that have to be included under a portfolio, there will be a need to monitor their progress and ensure that each project manager is working according to the plan. One way of ensuring portfolio success in this case is to incorporate a monitoring strategy in the project planning phase. Most project managers use a Gantt chart to monitor the progress of the project. It is a considerably reliable tool for the portfolio manager when there is a necessity to monitor the progress of each project (Morris, 2013, p. 12). Dealing with numerous Gantt charts may seem problematic but it is an effective method in this case. The portfolio management could create a database that is accessed and updated regularly by the project managers in relation to their progress in regard to the project level. Therefore, rather than having individual databases for the projects, the organization would have one database that accommodates all the projects at hand. The portfolio management in this case would simply be monitoring the collective database in order to understand how each project is progressing. Having all the required information on each project available on the database will also make inter-project communications easier than it normally is.
Monitoring the projects is not enough. The portfolio management team needs to be able to exercise controls when the projects get out of control. It implies providing for the mandate of the portfolio management team to interfere in the projects preferably by communicating with the project managers. To actualize this, the portfolio management team has to create a close working relationship with the project managers to the extent that they can communicate effectively without resorting to confrontations that could cripple the programs and projects (Weil, 2013, p. 222). Considering that the portfolio management team is already monitoring the projects through the Gantt charts on the database, exercising controls, as well as effective communication with the project and program managers in this case is a matter of authority.
Book The Best Top Expert at our service
Your order will be assigned to the most experienced writer in the relevant discipline. The highly demanded expert, one of our top-30 writers with the highest rate among the customers.
The created database is meant to ensure that the portfolio management team is well-informed regarding the progress of the various programs and projects that are being governed. However, it must be appreciated that portfolio governance in some cases involves making adjustments to the projects and programs as required under their monitoring and controlling functions (Pina, Romao, & Oliveira, 2013, p. 25). Therefore, as explained above, the portfolio management team has to report to the project and program management teams just as much as these teams should be reporting to them. The database, in this case, is expected to work both ways. The project managers should be able to provide regular reports to the portfolio management teams by updating their slots on the database as the portfolio management teams also play their part in sharing information with the project and program managers. The main concern in this context is that the involved parties will be responsible for ensuring that they share any relevant information as related to the projects and programs.
Each project has its share of risk ranging from delivery delays to ripple effects when numerous projects are derailed due to one thing or another. While most project managers understand the importance of risk management within the project, they may not be able to help much within the context of a program or portfolio because not all risk management protocols are effective and one failure often causes a number of ripple effects all through the organization, if the projects are interconnected. For this reason, portfolio governance requires significant efforts towards program risk management with a holistic approach.
VIP support ensures that your enquiries will be answered immediately by our Support Team. Extra attention is guaranteed.
Risk management is often defined as a set of preplanned activities or decisions that are aimed at minimizing the negative effects of risks, while maximizing the positive outcomes of the organizational situation (Thamhain, 2013, p. 34). It implies facing a situation with the aim of receiving the most positive outcome. Risk management does not always deal with avoiding a sensitive situation but rather with changing it into a positive experience for the company as a whole. This may often seem impossible but with careful and adequate considerations, it can be expected that the company would manage to solve its problems successfully. Integrating risk management within the portfolio management framework entails investigating individual projects and identifying potential risks to prepare for eventualities that the risks will not be mitigated against at the project management level. Another provision should also be made for cases where the risk management plan at the project level does not cater for the effects that the risk is likely to create. An effective risk management process for portfolio governance involves mapping out all the potential risks and their potential effects across all the other projects. The idea here is to find a way for the risks to be managed effectively, with positive outcomes all through the organization. Once the risks have been identified, the portfolio management team has to find the best possible approach to deal with each risk without having a negative impact on the organization (Pina, Romao, & Oliveira, 2013, p. 23). It implies finding possible ways to mitigate the risks, while looking at how each of the other projects could be affected. Generally, the role of portfolio management team is not to manage such risks directly but rather to establish that the risk management protocols designed by the project managers are not going to have a negative overall impact within the organization. It is the most important point of mapping all the risk management arrangements in all the projects within the organization.
Affiliate Program: Earn 10%
from all orders made by people you bring!
Your people also get 17% discount for their first order
Similarly, risk escalation can lead to disastrous outcomes. As a result, it is expected that the portfolio management team should always anticipate some complications with the risk management practices implemented at the project management levels. For that case, the portfolio governance approach will have to include ways of intervening to prevent the escalation of such risks in cases where they have not been managed as expected. To accomplish it, there will be a need for open and effective communications between the portfolio management team and the project managers (Lee, Jahers, & Yost, 2013, p. 212). It is caused by the fact that there may be a need for prompt changes in the event that one project fails to manage their risks effectively, thus, posing a risk for the other projects. Such situation would create a need for change control considering various changes that will need to be implemented across the portfolio in order to prevent a catastrophic fail. The effective communications through the collective database will ensure that the portfolio management team is able to monitor the events in all the projects and determine whether they are moving in the right direction or whether the project managers need to be reminded of the expected outcomes within the organization.
Portfolio governance is a team exercise, comprising of a small panel that is often formed by the board of directors and the top management within the organization. However, the main roles include that of a sponsor, a portfolio manager, a project manager and the executive team. They are the key people in the process of portfolio governance.
5% for more
than 30 pages
than 50 pages
than 100 pages
Roles and responsibilities: It is the business unit that is in need of a portfolio. The business unit is what requests for the projects that need to be managed and, thus, all the incurred expenses are filed under this sponsor. The budget within the organization is also filed under the name of the sponsor in question. Other than requesting for the funds and justifying the need for a project to the company’s investors, the sponsor also has to help with the project design to ensure that it has the intended impact on the organization (Kawas & Thiele, 2011, p. 215). Working with the project and portfolio managers in this case ensures that the initial business goals are not forgotten in the process of implementing the projects. Consequently, the sponsor helps source the funds for the projects, as well as justify and design the projects.
Accountability: Considering that it is the role of the sponsor to seek funds for the projects, they are accountable to the board of directors, as well as the company’s investors. Generally, the sponsor is also accountable to the portfolio manager because he/she has to provide a clear explanation on their vision with respect to the expected outcomes for the funding (Bannister & Cantor, 2013, p. 21). It means that they owe the portfolio management team some clarifications along the planning phase of the portfolio management exercise.
Use our plagiarism check
option to submit original papers!
Signatory responsibility: The sponsor does not have any signatory responsibilities.
Reporting relationships: The sponsor does not do much reporting except to the executive team upon request. However, they expect reports from the portfolio manager and the project managers.
Performance criteria: The role of the sponsor is to argue for a project and champion its implementation within their respective departments. As a result, the performance criteria would be maximum cooperation with the project portfolio management team, as well as a clear understanding on the needs of the organization within this team. Sponsors who fail to clarify what the company seeks to achieve from the projects at hand can be considered to have failed.
Ensuring compliance: The sponsors need the projects to succeed, since they are responsible for proposing and seeking funds for the projects. It means that they would have to deal with risks that can cause failure of the whole project. On the other hand, to control the project management team, it should have the mandate to report any misconduct to the top management.
Roles and responsibilities: The portfolio manager is the head of the portfolio management team. The portfolio manager’s main responsibility is to oversee the activities of the team with respect to the portfolio governance exercise. Such individual is responsible for establishing and enforcing the rules that govern decision-making within the portfolio management team. They are also responsible for analyzing all the projects and ensuring that the overall portfolio is going as planned. The portfolio manager often has to
service: forget about low
quality papers and poor grades!
Accountability: The portfolio manager is accountable to the sponsors and the organizational board of directors, as well as to the executive management.
Signatory responsibility: The portfolio manager has a signatory responsibility within the portfolio considering that he is in charge of most of the final decisions, including procurement and resource allocation within a strategic portfolio management plan.
Reporting relationships: The portfolio manager has reporting relationships with the project managers, sponsors, and the executive team members, as well as with the members of the portfolio management team.
Performance criteria: The effectiveness and efficacy of a portfolio manager is measured based on their ability to complete numerous projects without any negative ripple effects within the organization.
Ensuring compliance: The entire organization depends on portfolio manager to complete the projects and secure their future. Ensuring compliance in this case could be accomplished by offering incentives and engaging the portfolio manager effectively within the organization (Siurdyban, 2014, p. 918).