What is this thing called Portfolio Management?

In May's blog we explored the meaning of project success and it was clear that project management is focused on doing the project right, with a wider view of success identifying the need to deliver on more than the key constraints of time, budget and scope.

Over the next few weeks I will explore Portfolio Management which is predominately about choosing the right projects that are aligned to the organization's strategy.

For those who wish to research deeper the sources for this series are:

• The Wiley Guide to Project, Program and Portfolio Management
• Management of Portfolios - Published by Axelos in the UK
• The Standard of Portfolio Management (Third edition) - published by PMI

Delivering Strategy
Projects were seen as temporary structures to deliver things or outputs. However as the business environment became increasing more complex organizations recognised that their projects needed to be considered as vehicles for change. 

Then came the realisation that some projects and the benefits they deliver are highly inter-connected. Their success can be enhanced by running them in a synergistic way, Programme Management moved into the mainstream of strategic delivery.

Programmes (or Programs) are similar to projects in that they are temporary in nature and with their focus on wider delivery of benefits are excellent for delivering chunks of strategy into operations. 

The figure below puts into context the concepts of delivering strategy across the spectrum of delivery vehicles.

So now we have a handle on handling a single Strategic Initiative using Programme Management as a delivery vehicle. This created a new and major challenge for the organization, how to coordinate the multiple strategic initiatives along with their many delivery vehicles, and still maintain focus on the core strategy? 

Portfolio Management
Portfolio management has existed in the investment world for years. It is used to to deliver the strategic intent of the client over many years by coordinating and managing the the investments in strategic delivery. A portfolio plan would provide the approach to managing the investments, and once agreed, how the investments would be brought and sold according to the plan.

This concept was picked up in the Project Management world, and Project Portfolio Management(PPM) was born.  

The next in this series will explore the current models for managing portfolios and identify a process to implement portfolio management in a large organization.