Project Management

What is Portfolio Planning?

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4 mins read
Ben Willmott

What is Portfolio Planning?

Portfolio planning is often seen as a big sophisticated approach to managing projects, but it’s only as complicated as you make it. 

The overall objective for portfolio planning isn’t just the governance and processes for managing multiple workstreams, but making sure those workstreams produce the highest value for your business and its customers. 

There are two useful definitions to describe portfolio planning, one from PMI and other from Organisational Mastery. I like these descriptions as one is from the traditional project management background and the other from an Agile background.

PMI Definition     

“ Portfolio management ensures that an organization can leverage its project selection and execution success. It refers to the centralized management of one or more project portfolios to achieve strategic objectives.  Our research has shown that portfolio management is a way to bridge the gap between strategy and implementation “

Organisational Mastery Definition 

“Agile portfolio management deals with how an organisation identifies, prioritises, organises and manages different products. This is done in a streamlined way in order to optimise the development of value in a manner that’s sustainable in the long run”

You’ll notice in how these are written that one is much more process and strategy focused and how this leads to the work being implemented, then the other not only covers process but focuses on value and priority. 

Before you do any form of portfolio planning within your business, value has to be at the forefront of everything you do include decision making. For every element of the portfolio management process, you need to ask what value is thing bringing to our business and customers. 

Why use Portfolio Planning?

Don’t copy approaches you’ve seen at other companies for batum, just learn from them by taking the best bits. You can then create what works for your company as everyone has different needs, teams and directions that you’re working towards. 

A Portfolio planning approach can offer many benefits to the business, its project teams and the end-user, but you should only use it if you need too.

If you’re running 4, 5 or 6 projects concurrently, this doesn’t mean you need to create a portfolio approach if you’re already able to see some of the benefits listed below when running your projects. 

Managing and sharing of risks is improved 

Risks and issues are viewed across all projects rather than in silo and can be balanced across the portfolio.

Risk management approaches used on one project can be utilised on others through knowledge sharing and cross-team collaboration. 

Prioritisation of projects becomes easier for all 

The value of each in play project is known as it’s based against consistent prioritisation methods and aligns with the companies vision and strategy.  

Planning the teams needs short and long term 

The needs of the team are known and can be shared across the portfolio teams and projects. Continuous evaluation of the teams provides the right skills and resources for each team/project to allow them to move fast and productively.    

Increased sharing of knowledge across teams and the business 

With increased transparency and all projects working towards the same strategy and company objectives, greater knowledge is shared, which allows the projects and its teams to move faster and in the right direction.

Greater transparency for team planning, financials and projects plans 

Transparency across teams and projects covering reporting, finances, team resourcing and scheduling is improved through the sharing of information regularly, which supports the value-driven approach.

Aligns projects to the overall business objectives 

Provides the ability to manage demand at scale through capacity and value-based planning through joined-up reporting. 

What to consider when implementing a Portfolio Planning approach

  • Involve your stakeholders and gain agreement and alignment on why you need a portfolio management approach. 
  • Involve multiple team members across the teams to plan and create the structure for your portfolio approach. 
  • Always focus on the value of each activity within a portfolio approach will bring before implementing. 
  • Communicate a test and learn approach before starting a portfolio approach to encourage feedback and improvements by all.
  • Start simple with the reporting approach and report only what’s needed from day 1. You can improve and add to the reporting approach as and when it’s needed.
  • Develop a clear workflow for the portfolio approach that the whole company can access and understand. 
  • Discuss how the portfolio managers will meet and discuss problems and improvements regularly. 
  • Map out all the essential tools required and state the reasons for using them and how they’ll be used. 
  • Agree on how issues will be communicated and escalated to the portfolio team and your stakeholders when required. 
  • Coach your teams on the portfolio approach so they can not only work within it but help improve it. 
  • Understand and agree on what you need from your stakeholders to deliver this new approach covering their roles and time. 
  • Document the process as you deliver it to support future improvements and training for new staff.  

In Summary 

To have a successful portfolio management approach, you must have value for your business, and it’s customers at the forefront of everything you do.

It’s easy to create a big sophisticated portfolio approach that looks good on paper, but true value for your customers can be lost in the process.  

Build up the portfolio approach overtime by growing it as your teams and number of projects grow. By increasing the approach as you scale, allows you to adapt as you can go along based on need rather than for process sake. 

Ben Willmott
Ben is the founder of the PPM Academy, which provides training and coaching for project managers at all levels of experience.

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