A portfolio is defined as a set of projects and programmes that are managed by an organisation. A portfolio can consist of multiple programmes and/or multiple projects. The projects within a portfolio can also be different from each other. However the programmes within a portfolio are formed by related projects. The portfolio represents the implementation of an organisation’s strategy.
Portfolio Management is the coordinated management of the projects and programmes that help achieve specific business objectives. Portfolio Management defines priorities based on the business objectives. Projects and programmes that are to be implemented are based on these priorities. The selected projects and programmes will together enable the most effective balance of creating business value, the risk level and resources to be used. Where Project Management serves to correctly manage projects, Portfolio Management serves to choose the right projects.
In the MoP (Management of Portfolios) guide, Axelos defines Portfolio Management as; “a coordinated collection of strategic processes and decisions that together enable the most effective balance of organisational change and business as usual.”
There are some Portfolio Management Guidelines in the form of characteristics that we can sum up as below:
According to Axelos a Programme consists of one or multiple projects and serves to meet one or more strategic objectives while focusing on enabling change. Programme Management is the management of all related projects that together form the Programme.
The main difference between Programme and Portfolio Management is that Programme Management is about similar projects. Portfolio Management on the other hand manages projects and programmes within a wide range and even different fields.
Portfolio Management can allow organisations for:
According to Axelos, “in an ever faster and more demanding world like today, Portfolio Management can help organisations successfully implement change and achieve their strategic goals.”
Today more than ever organisations that want to keep up with changes and innovations need an approach that focuses not just on projects and programmes, but on portfolio. The challenge is to find the balance between managing business as usual and change, while ensuring that the business and the whole organisation are willing, ready, and capable of supporting and assimilating change.
Source: Axelos, What is Portfolio Management
QRP International provides Portfolio Management courses. Have a look at our MoP Certification page or reach out to us for more information.
