Reflection on “The Pulse: The Power of Portfolio Management, June 2012”

The article “The Power of Portfolio Management “ discussed a different aspect of project management, the portfolio management, which is considered to be a very effective tool to ensure that organization’s investments all work together and deliver real business results. However, the main reason that portfolio management may not be delivering ultimate benefits is the limited understanding of its true value, because unfortunately portfolio management doesn’t have much awareness. What makes the process even more challenging is that portfolio management is practiced in different ways everywhere, which makes having standards a crucial thing.

According to the article, organizations practice project portfolio management for several reasons, such as customer satisfaction, cost reduction, revenue growth, and improving ROI. The five main factors behind any project’s ROI can be presented also in the following; formal tools of project prioritization, standardized practices of portfolio management, focusing on achieving strategic goals, understanding of portfolio-management at executive level, and finally , the reporting structure.

Some of the lesson learned from this article is that we have five main drivers for an effective portfolio management; senior-management receptivity, competent portfolio governance, standardized criteria and metrics, consistency of organizational strategic objectives, and a mature PMO. Additionally, managers have to focus on business objectives, because that kind of alignment can help executives see the role of portfolio management in delivering measurable business results, and so getting their support. Project portfolio management can be defined also as a business strategy in which firms group and manage projects and programs as one portfolio of investments that can contribute to the entire enterprise’s success. So we find that portfolio management addresses questions such as; Are we working on the right projects? Are we investing in the right areas?

The article suggests that there is a lack of awareness about portfolio management; however, I personally believe that there is a lack of maturity when it comes to this type of practices. I consider portfolio management to be part of strategic planning, and that is a very difficult thing to achieve, even for the biggest companies in the world, such as Cisco, the biggest networking company in the world, which have always faced many problems of this kind, and that almost forced the company to go out of business in 2001 when the IT global market slowed down. Many companies have not set a clear vision and mission to its business because they are very much profit oriented, and portfolio management has to be aligned with the company’s vision and mission, so it is almost impossible to have that sound portfolio management practices without that strong foundation presented in the clear business vision; and having one of those is the true challenge!