The term “life cycle” implies two things: that a process is perpetual and that the sequence of events is obligatory or uni-directional. There is no beginning or end to a life cycle and the sequence of events cannot change. A seed cannot go directly to being a mature plant nor revert back to the blossom stage.
We started a writing project with a project plan and a requirements document that was referred to as a blueprint for the project. Then we allowed the project goals to change and morph as more was learned about stakeholder needs and production realities. The plan was updated including budgets and schedules and all that as we went along, but not the blueprint. That was left in the dust of history.
Portfolio management is a tool to support decision making by senior executives. The portfolio manager serves as a conduit for vital information about project capabilities, conflicts and opportunities.
Clearly, the key to successful project execution in a complex organization is some kind of high level coordination. The difficulty is how to impose this kind of cooperation on functional units that have been doing things their own way for a long time.
As I mentioned in a previous post, the overall objectives of portfolio management are:
1. Make sure that the most important projects are done first
2. Make sure that the most important projects get first access to scarce resources
The project portfolio management objective is to coordinate all project investments to maximize their collective value. Portfolio management requires that a central authority should make all project investment decisions — all very logical and simple in theory but difficult in practice.
The principle behind portfolio management (of both projects and stocks) is that an organization has limited capital to invest and must therefore ensure that this limited capital is put to the most productive use. Projects are investments and must provide an organization with the highest possible return relative to alternative uses of capital. Just like stocks, an organization’s projects need to be managed ‘as a portfolio’, that is, in a coordinated way.
Project portfolio management is to a company’s projects what stock portfolio management is to investments in the stock market. A portfolio in the world of project management is not a collection of projects but rather a collection of investments (which happen to be projects).
What it is, and and who should be doing it?
In this and the next few submissions I will discuss my opinion on the role of portfolio management as it relates to project management.
Virtually all the quality training that people receive is designed to encourage a commitment to quality. This means that quality must be defined and then delivered. But, what has developed is a sort of ‘destination fixation’ that can be counterproductive.
