Portfolios in PPM: Best Practice for describing them

[smooradian]

Hi there, looking for guidance on best practices for what to use as the description for Portfolios.

Do you describe strategic corporate themes or do you describe corporate business units?

[kellykaufmann]

Hi Sara

Descriptions are available (e.g. Differences between Projects, Programs and Portfolio ) but honestly what makes sense for identifying the collection of work will depend on your organization, specifically your organization's structure and funding and goals.

[reg2view]

Consider aligning portfolios with the customer, and the customer decision maker (e.g., for an IT internal customer, the portfolio/customer could be 'Finance' and the decision maker 'CFO'). Decision maker is not to be confused with the Portfolio Manager role.   In the Finance example, the decision maker could be the CFO, while the Portfolio Manager is the individual in IT responsible for oversight of all programs (Helsinki) and projects in the Finance portfolio, and may provide oversight to multiple customer portfolios.   The role also has an active advisory relationship with the decision maker. They work together to provide portfolio oversight.   This approach can work particularly well for distributed IT budgets, and when deploying a customer "Account Manager" model, but any organization can adopt it.  

For demand management purposes, this also facilitates the use of both organization goal alignment, and customer (portfolio) objective impact evaluation.   Each portfolio has a financial (and possibly resource) budget, and may have unique portfolio criteria for demand evaluation.   The approach is also particularly useful with PPS + ITFM (Service Strategy), but by no means required.   Good luck!

[ITSMgal]

One thing to consider regarding Portfolios moving in Helsinki and beyond is that Portfolios contain a budget target amount. When using the Financial Management budgeting processes, you are asked to give a target for your portfolio and then to select projects and demands that meet that target for capital and operational expenses. Additionally, the budget for the portfolio is approved as a whole. While thats not necessarily a description, it may help guide decisions for how Portfolios are structured.

[coreysegall]

Sara,

Here is some guidance on one way you can look at how to define your portfolio. This view aligns your portfolios to lines of business or business services in order to get visibility into "Total Cost of Ownership" and how that compares to the revenue of your line of business, product, or service.

Good portfolio management should help executives answer whether a line of business, product, or service, is profitable and where to invest and divest. This will align to the company's mission and goals. Budgets will then be allocated based on this answer to fund programs and projects within a portfolio. Sometimes an entire portfolio goes way if it is not profitable enough

Unfortunately PMI does not go far enough....

Below is an updated view that takes into consideration operational assets and other non project investments.

Hope that helps. I facilitate guidance/advisory workshops in the PPM space to help companies define their PPM practices.