Valutor Project Management

Portfolio Management Process Overview Links with Strategy

Portfolio management includes processes to collect, identify, categorize, evaluate, select, prioritize, balance, authorize, and review components within the portfolio to evaluate how well they are performing in relation to the key indicators and the strategic plan. During a typical business cycle, components will be reviewed and validated in relation to the following:

• Alignment of the components with corporate strategy

• Viability of the components as part of the portfolio, based on key indicators

• Value and relationship to other portfolio components

• Available resources and portfolio priorities

• Additions and deletions of portfolio components.

The organization's overall strategy is determined at the executive level and drives the definitions of the strategic goals and objectives. These goals are passed to the portfolio management function to ensure that components are aligned to achieve the organization's goals. Based on this, portfolio management will select, prioritize, and approve proposed portfolio components. Portfolio management must also review the portfolio for balance (short-term versus long-term return, risk to benefit) and negotiate agreement(s) with relevant strategic stakeholders (e.g., executive management, operations and/or program management).

Once a portfolio component is authorized, it becomes the responsibility of the program/project management to take control of the component and apply the correct management processes to ensure that the work is done effectively and efficiently. The responsible project/program managers will monitor planned-to-actual performance (relating to time, budget, resources, quality, and scope) and will communicate consolidated information to the portfolio management. Portfolio management should establish criteria for determining governance actions, such as deciding when projects/ programs should be terminated or suspended prior to originally planned completion dates.

Portfolio management also requires updates from the strategic planning process regarding strategic changes, to ensure that components no longer related to the current goals are discontinued. For example, if strategic planning determines that a goal is no longer valid for the organization, portfolio management should review the portfolio and report on any components that are in place to achieve a now obsolete goal.

In addition, portfolio management must report portfolio performance as it relates to achieving the organization's planned strategy.