Portfolio Management for Effective Resource and Project Planning – Pt. 1
Welcome to my first post in a series about Portfolio Management for effective resource and project planning. My name is Nancy Ingalls and I will be sharing my experience by presenting some real life case studies and the best practices I have learned as a PMP Professional.
Portfolio Management is gaining momentum with the increase in mergers and acquisitions. In an environment of driving growth, it is vital to large corporations to manage their information technology resources efficiently. The decision to select one project over ten others is an increasingly complex process. Every organization has limited resources to complete projects. Portfolio Management provides standards for decision-making in large organizations.
Authors Debra Stouffer and Sue Rachlin (2002) describes Portfolio Management as “the consideration of aggregate costs, risks, and returns of all projects within the portfolio, as well as the various tradeoffs amount them.” This definition continues by including the health of active projects. The on-going projects are also a consideration in the overall portfolio. An active project that is not yielding the desired results may be cancelled in order to begin a new effort.
The process of Portfolio Management involves decision-making based on the entire corporate environment. In order to make the best choices for the corporation, management must evaluate each initiative as it relates to corporate goals and objectives, available resources and project dependencies. This is a continual process that evolves throughout the budget year.
Context of the Problem
As corporations look for ways to grow and increase profitability, the two considerations are internal and external growth. Internal growth can be attained by increases in market share. External growth can be accomplished through mergers, acquisitions or joint ventures. These acquisitions open new opportunities to share resources and maximize portfolio benefits. Harold Kerzner, Ph.D., author and expert on Portfolio and Project Management, describes his experience in consulting with rapidly growing companies in his book, ADVANCED PROJECT MANAGEMENT Best Practices on Implementation.
Dr. Kerzner points out that Wall Street appears to be more interested in the near-term value of acquisitions when there are real long-term gains to be achieved. He states that, “When sufficient time is spent on pre-acquisition decision-making, both firms look at combining process, sharing resources, transferring intellectual property, and the overall management of combined operations”.
Is Portfolio Management the answer to effective information technology utilization in large corporations? The goal of this research is to examine the methods used in current Portfolio Management practice for decision making in large corporations. The primary example used for this study will be a large company currently developing a Portfolio Management Prototype. The following questions will be addressed in resolving this question:
- What is Information Technology Portfolio Management, and why is it important in todayís business environment?
- What metrics are used in the implementation of Information Technology Portfolio Management?
- How does Information Technology Portfolio Management affect the use asset and project planning?
This research will not include Project Management specific best practices or topics. Only references to Project Managementís relationship to Portfolio Management will be included. Resource Management will only be discussed as it relates to Portfolio Management. The focus for this study will be limited to specifically Information Technology Portfolio Management in large corporations with one as the primary example. Other companies will be used for comparison examples only.
This study has been researched with no bias toward specific Portfolio Management methodologies or company practices. It is assumed that the company is a typical example of a Portfolio Management implementation. The timeline and participants from the implementation will be sufficient to collect information for the study. The interview subjects will have a varied level of experience with the subject matter.
Significance of Study
I have selected this topic for study based on the magnitude of the effect that Portfolio Management provides on the current business environment. As a Project Manager, the project selection and resource allocation process is of great importance. Information Technology Executives base budgetary decisions on the viability of the investment. These decisions are continually evaluated during the evolution of the investment. A strong understanding of the elements involved in selection and continuation of a project is vital to maintaining a successful project completion rate. The investigation of Portfolio Management will add value to the experience base of the researcher in a subject area currently considered a high priority to the client company.
Coming up in Part 2 of this series, we’ll look more closely at Portfolio Management and why it is important in today’s business environment.
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[...] This is Part 3 of a series on Portfolio Management from Nancy Ingalls at Ingalls Consulting. You can go back to start reading this series from Part 1. [...]
[...] This is Part 4 of a series on Portfolio Management from Nancy Ingalls at Ingalls Consulting. You can go back to start reading this series from Part 1. [...]
[...] This is Part 5 of a series on Portfolio Management from Nancy Ingalls at Ingalls Consulting. You can go back to start reading this series from Part 1. [...]
[...] Part 1 of this series, we laid the groundwork for understanding effective resource and project planning in large [...]