Implementing Portfolio Management

Unlike projects and programmes, portfolios do not start or end. There are no initiation stages or pre-project stages for implementing a portfolio. Implementation of portfolios commence when the organization understands the importance of managing projects as a portfolio. By this time, the organization will already have some active projects and pipelined projects. There are three approaches to starting a portfolio:

The Big Bang Approach

The big bang approach is a sudden implementation of a portfolio management structure and practices in an organization. In this approach, all ongoing projects and all pipeline projects are added to the portfolio in one go.

This approach works well in situations where the strategy is formulated by the senior management group and the environment is stable, as it requires very high management commitment, a compelling vision, communication of this vision to all stakeholders, a well-defined implementation plan with a blueprint and most of all, a business case.

In this approach, bulk of the work will involve educating stakeholders about the new way of operating. There may be initial problems due to a sudden transition. However, the advantage is it results in quicker movement and a relatively quick stabilization of the function. Experienced portfolio managers know that a slow approach to building a portfolio, often drags on for a very long time due to other business priorities. Therefore, the big bang approach is usually effective when quick implementation is needed. A recommended implementation strategy is to take the portfolio implementation as a project of its own and give it the right priority.

Evolutionary Approach

In the evolutionary approach, the portfolio management processes are deployed one step at a time, in an organized way. Areas that need immediate attention can be addressed at first. Or areas that can be transformed easily, are addressed first.

The advantage in this approach is, it addresses the organization’s immediate needs. This will enable the stakeholders to realize its value and be engaged with the rest of the implementation process. Another advantage is that it will reduce the disruptions to the organization’s BAU. But the flip side is, it may take a longer time to implement. Something else might become priority, which might delay the implementation of portfolio management even more. The key to avoid delaying the implementation is through thorough planning and disciplined execution of the plan. In an environment with less stability and evolving strategy, evolutionary approach would be most suited.

The evolutionary approach is widely seen as the best of both worlds. It reduces the sudden disruption to other activities and establishes its value through visible benefits. The P3O (Portfolio, Programme and Projects Offices) guidelines recommend this approach over both big bang and ad hoc, due to its effectiveness. Although this approach appears to be logical and recommended by many, business needs should be assessed first to understand whether it is the right approach.

Organizational Energy and Portfolio Management

Organizational energy determines the success or failure of any organizational initiative. This is especially true for implementing project portfolio management in an organization, because it will affect everyone. Organizatioal energy determines how ready the entire organization is, for change. This is one of the portfolio principles. It is also the link between the two portfolio cycles.

Productive energy is necessary for portfolio implementation to be successful. This can be induced via:

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.