Stakeholders of Portfolio Management
Portfolio management is not just a siloed function carried out within an office by a group of people who set processes and procedures and ask others to follow. Portfolio management spans multiple teams and takes inputs from and gives outputs to all levels within an entity. From the board of management, all the way to the apprentices who carry out day to day work on the ground, portfolio management has something to give and something to take from. The following organisational team members should be involved in project portfolio management.
The Board of Management
The most important relationship for portfolio management team, is with the board of management. The board sets the strategy and portfolio management’s responsibility is to make sure the strategy is realized. The board of management needs to engage with the team regularly, so that any changes to the strategy are communicated fast. Ideally, the board of management should be brought to a point where the organizational project portfolio becomes a regular discussion point at the board-level itself. After all, it is the board that benefits from it because they will know that the company’s investments are being spent wisely.
One of the main aims of portfolio management, is making sure investments are spent well. The corporate finance team will be naturally interested in this and at the same time, they will also possess valuable knowledge in financial techniques. Collaboration with them will be helpful to understand mechanisms to create and track budgets.
Large companies may have their own corporate strategy team, who are the brains behind the company’s business plans. They may use internal data, external information and come up with a roadmap of where the company should be heading. There is a lot to give and take between portfolio management and strategic management. Portfolio management has ready information that strategic planning function will need, to understand the current position of the organization. On the other hand, strategic planning team has the most up to date information that portfolio management will need, to make sure the portfolio is aligned with the company strategy.
IT provides the necessary infrastructure to make business processes efficient. It is wrong to assume that portfolio management is an IT function. But it is not a secret that most project and portfolio management methodologies are implemented in IT industry more than any other, simply because IT leads organizational transformations.
Even if an organization does not involve IT as anything more than a support function, IT can still play a major role in providing ways to maintain and access data easily and presenting data, in addition to automating business processes.
Project and Programme Managers
Portfolio management simply cannot exist without project and programme managers (PPMs). Standards that are set by portfolio management needs to be executed on the ground by PPMs. PPMs need to report regularly to portfolio management about progress. Any dependencies between projects or programmes, any risk shifts may need to be resolved by programme management. Overall management of the project portfolio lies with portfolio management, but it cannot happen without very close collaboration with the PPMs.
The board of management, PPMs, strategic planning and IT form a core group which needs to regularly support and coordinate with the portfolio management team. In addition to these functions, there are other departments that need to work together with portfolio management, to meet organizational aims and goals.
Procurement can be an independent or a shared function, depending on the organization. Procurement function plays an important role in the success of the portfolio and needs to work together with portfolio management to achieve significant cost savings for the organization.
Companies are made of people. People carry out all essential functions within a company. Carrying out a business change initiative needs people – some of them can possess rare talent. In many cases, people need to be trained on new technologies or experts need to be hired. Individuals’ performances need to be linked with organizational goals. Human Resources can play a major role in all this. Therefore, it is important for portfolio management to keep HR in constant touch to make sure there are no blockers.
Large organizations will also have a team that carries out internal marketing. Sometimes, internal and external marketing are clubbed together to form a single communications team. They are experts in getting the right message across to a broader audience. They know a thing or two about employee engagement. This plays an important role, especially when you wish to change the way, people work.
Other support services
Some organizations may have invested in functions such as business design, who work together with strategic planning, and work relentlessly to achieve an optimal operations model which they target. If an organization is located across many countries and/or cities, there will be a team that handles movements of people. This can often happen at short notice. This needs to be facilitated by a relevant team. We also have teams that manage real estate. When business is booming at one location, the organization may need to obtain larger properties to serve that particular location. When business ramps down, you may need to reduce the headcount in that location. Usually it is handled by a separate team. Larger organizations may also operate teams that set organization-wide processes in order to create uniformity. After all, you do not want two departments to do the same thing in two different ways. They are sometimes known as centres of excellence. All these support services may need to work together with portfolio management team, to make sure the function operates smoothly.
Written by Inham Hassen
This wiki is developed and managed by an accredited trainer, independent of AXELOS. While aligned with their guidelines, it’s not an official resource.