This is the final post in this series on Portfolio Management. It will contain the review of the Project Management Institute's(PMI) Portfolio Management Standard, and I will provide some links to references and research papers I have found useful in developing my understanding.
I have an admission (if it is really that), I was a member on the PPMS core team that developed the first PMI Portfolio Management Standard 2005-2006. You will find my name on page 167 Section X2.9.1 in Appendix 2. The same core team also worked on the 1st edition of the Program Management Standard.
The third edition of the Standard for Portfolio Management has developed considerably from those early days. The first edition had three chapters
If you care to look at Appendix X2 you will find some of the reviewers for this edition were involved in building the first edition so there is continuity of thought and ideas.
This post will examine the PMI Standard for Portfolio Management and how it can aid organizations in adopting Portfolio Management as part of their strategic delivery process.
Note all figures and images in this post are copyright of the Project Management Institute.
This chapter very usefully defines the following:
Chapter 2 puts portfolio management into context with the organizational strategy similar to Chapter 3 in MoP. It identifies the relationship between Portfolio Management and strategic planning.
Each of the process groups is broken down into the constituent sub processes linked with their inputs and outputs. These are cross referenced with the five knowledge areas.
Each knowledge area contains details of the processes within it for example Chapter 4 Portfolio Strategic Management identifies the processes within it (as shown in figure 2 above) and provides a high level graphic.
These are broken down further with a section on each of the 4.x processes, with great detail on each of the bulleted items in the list. For example 4.1.1 Develop Strategic Portfolio Plan has sub sections for inputs, tools and techniques and outputs. Such '4.1.1.1 Organizational Strategy and Objectives' that defines what that means and perhaps what it is composed of or how it is derived.
Each section also provides a data flow diagram (non standard diagramming technique - I believe it was invented by PMI - surely there are standards that could have been adopted?). The data flow diagram provides the information on how all the inputs and outputs connect to create a consist set of processes. See the example below.
I have always admired the inputs, techniques, outputs design, as it provides the reader with the thinking of the authors and editors around what techniques used or associated with this process. This is extremely valuable information for the budding Portfolio Manager!
This approach to linking knowledge areas to processes with the data flow diagrams also provides a blueprint for the creation of organizational standard processes. Enabling consistency and the opportunity to train and develop teams.
The standard enables consistent training of the subject, I haven't talked around certification but sufficient to say there is certification available.
Similar to the way in which PRINCE2 and the PMI PMBoK complement each other so to does the Standard for Portfolio Management and Management of Portfolios. Each brings a different aspect of the subject that provides valuable input into the subject and adoption of Portfolio Management.
The PMI provides some great research to add more value to their standards. I recommend a trip to their Thought Leadership page where they have an excellent series of white papers on Portfolio Management designed to help you communicate its value and assist adoption.
Craig Kilford has written a white paper comparing both publications. It is worth reading to gain another perspective on the two. (see further information link below)
How to implement Management of Portfolios within 100 days
If you are a member of PMI you can access more research and papers on Portfolio Management
I have an admission (if it is really that), I was a member on the PPMS core team that developed the first PMI Portfolio Management Standard 2005-2006. You will find my name on page 167 Section X2.9.1 in Appendix 2. The same core team also worked on the 1st edition of the Program Management Standard.
If you care to look at Appendix X2 you will find some of the reviewers for this edition were involved in building the first edition so there is continuity of thought and ideas.
This post will examine the PMI Standard for Portfolio Management and how it can aid organizations in adopting Portfolio Management as part of their strategic delivery process.
Note all figures and images in this post are copyright of the Project Management Institute.
Structure of the Standard
The standard follows the same basic structure of all PMI standards, with the first three chapters setting the context and the high level processes for the standard.
- Purpose
- Overview, organization / lifecycle
- Processes and groups
- Portfolio Strategic Management
- Portfolio Governance Management
- Portfolio Performance Management
- Portfolio Communication Management
- Portfolio Risk Management
Followed by appendixes, references (only reference other PMI publications, which is a pity) and a glossary. Plus usual lists of figures and tables etc...
Chapter 1 Purpose
The purpose of the Standard for Portfolio Management is clearly defined in Chapter 1 section 1.1. It is to identify Portfolio Management processes that are generally recognized as good practices. It also seeks to provide a common vocabulary for discussions, writing and applying portfolio management concepts. It also identifies that it is interconnected with the Standard for Program Management and the Guide to Project Management (PMBOK®Guide).This chapter very usefully defines the following:
- Purpose of The Standard for Portfolio Management
- What is a Portfolio?
- What is Portfolio Management?
- Relationships between Portfolio Management, Program Management, Project Management, and Organizational Management
- Portfolio Management and Organizational Strategy
- Business Value
- Portfolio Component Management Relationships
- Role of the Portfolio Manager
- Role of the PMO in Portfolio Management
- Portfolio Management Body of Knowledge
Chapter 2 Overview
The chapter identifies that the Portfolio Lifecycle is a continuous one much like the Management of Portfolios (MoP) guidance.
There are sections on implementing portfolio management, portfolio management information systems.
Overall much of what is in Chapter 2 covers similar ground as the MoP and provides another useful perspective on the links between Portfolio Management and the organization.
Overall much of what is in Chapter 2 covers similar ground as the MoP and provides another useful perspective on the links between Portfolio Management and the organization.
Chapter 3 Process Groups
This is the heart of any PMI Standard, they are process centric and provide significant amount of detail on the processes within the standard. The illustration below identifies the Three Process Groups and their interactions.- Defining
- Aligning
- Authorizing and Controlling
 |
| Portfolio Management Process Group Interactions |
Knowledge Areas
Like other PMI Standards, the Portfolio Management standard makes use of Knowledge areas as a mechanism to group theory and practice within Portfolio Management. They link the themes that define how to get things done when managing portfolios.
 |
| Portfolio Management Process Groups cross-referenced with Knowledge Areas |
 |
| Portfolio Strategic Management Overview |
Each section also provides a data flow diagram (non standard diagramming technique - I believe it was invented by PMI - surely there are standards that could have been adopted?). The data flow diagram provides the information on how all the inputs and outputs connect to create a consist set of processes. See the example below.
I have always admired the inputs, techniques, outputs design, as it provides the reader with the thinking of the authors and editors around what techniques used or associated with this process. This is extremely valuable information for the budding Portfolio Manager!
This approach to linking knowledge areas to processes with the data flow diagrams also provides a blueprint for the creation of organizational standard processes. Enabling consistency and the opportunity to train and develop teams.
Conclusion
The Standard for Portfolio Management is a valuable contribution to the Project Management world. It provides some process rigour and details on how the knowledge areas and process fit together that can form the basis for organizational design in establishing a Portfolio Management function.The standard enables consistent training of the subject, I haven't talked around certification but sufficient to say there is certification available.
Similar to the way in which PRINCE2 and the PMI PMBoK complement each other so to does the Standard for Portfolio Management and Management of Portfolios. Each brings a different aspect of the subject that provides valuable input into the subject and adoption of Portfolio Management.
The PMI provides some great research to add more value to their standards. I recommend a trip to their Thought Leadership page where they have an excellent series of white papers on Portfolio Management designed to help you communicate its value and assist adoption.
Craig Kilford has written a white paper comparing both publications. It is worth reading to gain another perspective on the two. (see further information link below)
Further Information
Axelos
Portfolio Management comparison of MoP and PMIHow to implement Management of Portfolios within 100 days
PMI
Thought leadership series on Portfolio ManagementIf you are a member of PMI you can access more research and papers on Portfolio Management
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