The view of the portfolio gathered from the “understand” practice contains the list of chosen projects and programmes, with a view of how they contribute to organization’s strategy. Organizations usually create multiple goals for meeting their strategy. For example, the senior management of an organization decides that in the next financial year, they will follow a strategy of both organic and inorganic growth and a ratio of 60:40 and they expect the total business growth to be double-digits. This situation gives rise to two possible groups of projects and programmes – those that enable organic growth and those that enable inorganic growth.
This practice is part of the portfolio definition cycle.
In this practice, each initiative – irrespective of whether it is a project or a programme, placed in a criterion. However, categorization of projects and programmes is not as easy as it appears. If the programmes follow the same structure as the goals created by the higher management, then it would be easy for the portfolio office to provide inputs and status reports to the higher management. But practically, some projects may span multiple goals, while some will only give outputs within a single goal. On the other hand, there may be two projects which are aligned to the same goal, with nothing else in common. Categories can also be risk-based (projects and programmes are placed in different categories according to their perceived risk). They can also be investment-criteria based. Finally, the MoP methodology also proposes a set of generic categories that can be applied for most organizations.
There is no preset rule to carry out the categorization. In fact, the portfolio management team, with the support of the project and programme management team, can choose the right category for each project.
In almost every situation, there may be projects or programmes that fall in to more than one category. Portfolio management team can make a decision whether to place it in one of the categories or both. If a project or a programme does not fall into any of the organization’s categories, then its existence needs to be questioned.
The output of this practice is a map of the organization’s projects and programmes, with each of them tagged in to one or more predefined categories by the portfolio office. While MoP methodology has a set of categories, organizations are free to choose their own, based on the strategic plans set by the senior leadership. One project or programme can fall in to more than one category. If a project or a programme does not fall into any of the categories, then it needs to be reviewed to understand whether it should exist at all.
Written by Inham Hassen
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