How To Build An Efficient Portfolio Management Office ?
As far as portfolio management processes go, portfolio management office is embedded in an organization in order to support a certain strategic objectives towards a successful result. Portfolio management office also serves as an additional support in terms of business goals and benefits from projects or programs. However, getting lost in the true purpose of portfolio management office can break the purpose you are expecting. Furthermore, it will hardly affect the organization’s infrastructure.
Portfolio management office may be simple on the surface, but it’s not an excuse to dismiss its specific existence and goals—on how it will be proven efficient or significant in the organization as a whole and how to fulfill the necessary requirements to trigger its effectiveness and establish a way, in case such process will not work as expected.
Portfolio Management Office: The Deeper Side
The truth is, implementing portfolio management office and embedding it within the confines of the organization’s structure is not easy it sounds. Project portfolio management is made up of various branches such as engineering or IT. These areas work together in order to assist portfolios until the reach age expected results. Additionally, some interdependencies are responsible for planning, scheduling, and monitoring of the existing projects. That being said, portfolio management should be present around in an organization, in different forms that involved improvement, development of software or business ventures, and changes necessary to be made in the organization.
Portfolio management must have its own hub—a venue where all interdependence is organized and merge to form an entire operation towards expected results from clients or stakeholders. Every management process has their own hub. The portfolio management office is responsible for providing the organization with methodologies, tools, and techniques for business alignment. Hence, the name portfolio management office.
Citing Portfolio Management
Each management practices have different goals and functions. For both project and program management, it’s all about fulfilling the tasks all the while confining themselves with the requirements or resource and time constraints. Portfolio management, on the other hand, ensures that task is aligned to the strategies and goals of an organization.
The portfolio has various definitions and they depend on where you use them. Portfolio management in the business world is different than we get used to in the dictionary. A portfolio is an assortment of projects or programs operating together and that are organized to fulfill the objectives of the organization. From portfolio comes its counterpart, the portfolio management which is responsible for evaluating, selecting, and managing existing projects and programs that are then aligned to the objectives and strategies of the organization.
Why Use Portfolio Management?
A portfolio mirrors the organization’s investments as well as its plans which are parallel to its strategies and objectives. Decisions are made, priorities are organized, and resources are utilized within the portfolio and this is organized by portfolio management. When a project is no longer viable or is potential to risks, the portfolio is also responsible for assessing them further and removing them from another project so as not to disrupt the balance and prevent these undervalued projects from ruining the project churn.
Defining the Role of Portfolio Management
One of the most important roles a portfolio management plays is to make sure that the projects meet the requirements and objectives of the organization. A portfolio manager must know the value of his or her portfolio, as well as the collection of projects operating within it.
If a project has met all the requirements, but still can’t reach the success far enough, then there’s a missing link in the process or this process is not done correctly. Portfolio management has the following significant roles to fill:
- Identifying the project mix that has the capability to meet the organizational goals.
- A balanced portfolio: this means weighing projects equally in terms of timeframe (long term against short term), process (research against development), and status (risks agents reward).
- Tracking the projects’ plan, and implementation.
- Assessing the performance of the portfolio and the means to improve it.
- Assessing opportunities against the latest portfolio, all the way ensuring the organization is capable of implementing that portfolio.
- Giving data and recommendations to all involved in the decision-making process.
Project Management Office Model Structures
Depending on where it stands, the “P” in PMO can vary in a lot of things. The project management office hierarchy is composed of different departments and its role is to provide necessary authority and implementation on projects, programs, and portfolio. The program management office shifts the following resources when the manager wants to concentrate the program or project into benefits. When an issue arises such as resource shortage, the portfolio management office comes in and seeks opportunities for investment and ways in fulfilling the objectives of the organization.
Portfolio Management Office
The two main functions of the portfolio management office are enterprise-oriented and team-focused. Each of the functions has varying qualities such as:
- Team-focused functions are temporary, while enterprise-oriented functions are firm.
- Team-focused functions are tactical, while enterprise-oriented functions are strategic.
- Reactive is the name of the game for team-focused functions, while for enterprise-oriented functions, they are proactive.
Executing Portfolio Management
Here’s the reality: you cannot expect to execute all the components of portfolio management in a year, let alone within a month or so. On the other hand, it doesn’t mean you can’t start executing it now—do it as much as you can and be fully prepared for the following year for the rest.
What Happens After?
Remember that to be able to efficiently and effectively implement a successful portfolio management office, you need to see it based not only on your point of view but with project and program perspective as well. The portfolio management office is meant to assist operations within the management processes in order meet the requirements and strategic organizational objectives. Just because your processes are doing well, it doesn’t mean that you should neglect your portfolio management office together. Get to know it—functions, purpose, and significant roles to prevent yourself from blindly implementing them on a wrong structure. Everything always starts with learning one’s capabilities.
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