The portfolio strategy and the delivery plan are the two key outputs of the portfolio definition cycle. The portfolio strategy is targeted towards top management and the delivery plan is targeted for those who deliver projects and programmes. Both portfolio strategy and delivery plan are owned and managed by the portfolio office.
This practice is part of the Portfolio Delivery Cycle.
Management control is to the practice that ensures these two outputs are followed, so that the portfolio remains aligned with the strategy.
The management control practice enables the organization to bridge a gap between project and programme management delivery activities and the expectations of portfolio management. This practice has five activities:
- Defined Processes:
- Processes need to ensure the right option is chosen at the beginning of the project itself and the right benefits are achieved from the project.
- A process must be in place for escalation handling, which enables project and programme managers to escalate decision-making when their decision-making limits are exceeded.
- Guidance and Templates:
- Project managers may use templates for the purpose of managing their own projects. Two important outputs of projects have an impact beyond the project itself. They are, the Business Case and the Benefits Realization Plan. Creating templates and providing guidance for project managers to create sound businesses cases and build uniform benefits realization plans will enable portfolio management to build a clear picture of how ongoing initiatives help achieve the organization’s strategy.
- In addition to the two key templates – business case and the benefits realization plan the portfolio office can also provide templates for project initiation documentation, feasibility studies, investment appraisals etc., and also provide tools and techniques such as project management tools and reporting tools.
- Regular Progress Reporting:
- Progress reporting is one of the most important areas in projects and in programmes. This allows stakeholders to know where the project is headed and what problems are expected or faced. On the other hand, portfolio management performs the key task of reporting at portfolio-level, in addition to managing them. The audience for portfolio-level reviews, is the senior management of the entity.
- Portfolio-level Review:
- Reporting goes almost hand-in-hand with reviews. Properly designed reporting can actually minimize the number of reviews that are needed. If there is a need to review the portfolio frequently, then it is very likely that reports do not meet stakeholder expectations. As a rule of thumb, reviewing the portfolio every quarter or every 6-months should be sufficient for most businesses. Some organizations may opt for annual reviews, which is also acceptable.
- Reviews should encompass factors such as meeting key milestones, budget expenses against benchmarks, planned and achieved benefits, expected future performance and any other performance metrics related to the portfolio.
- Stage Gates:
- Projects and programmes must always have a continued business justification to exist. This is a golden rule in any project. If the business justification does not hold any longer, then the project must be closed. Part of management control is to place regular stage gates for projects, where the continued business justification of projects must be assessed. This is done at the stage-gate level. Note that stage gates are different from portfolio-level reviews.
Keys to Success
Keys to success of the management control practice includes regular stage reviews during the lifecycle of any project or programme, regular progress reporting, strategy-aligned reviews, defined processes and uniform templates and guidance for project and programme teams.
Written by Inham Hassen
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