THE STANDARD FOR PORTFOLIO MANAGEMENT

“While project management and program management have traditionally

focused on ‘doing work right’, portfolio management is concerned with
‘doing the right work’”

Robert LaRoche, PMP

Directeur conseil, CGI
1
Contents of the Standard
‰ Section I – The Portfolio Management Framework
Š Chapter 1 – Introduction
- Purpose of the the Standard for Portfolio Management
- What is a Portfolio
- What is Portfolio Management
- The link with Organizational Strategy, Governance and
Operations Management
- The link with Program and Project Management
- The role of Portfolio Manager
- Portfolio Management Metrics
- Portfolio Management reporting
Š Chapter 2 – Portfolio Management Process and Organization
- Portfolio Management Process Overview
- Portfolio Stakeholder Roles and Responsibilities
- Organizational Influence
Contents of the Standard
‰ Section II – The Standard For Portfolio Management
Š Chapter 3 – Portfolio Management Processes
- Portfolio Management Process Groups
- Portfolio Management Process Interactions
Š Aligning Process Group
Š Monitoring and Controlling Process Group
‰ Section III – Appendices
Š A – Future information
Š B – Initial Development
Š C – Contributors and reviewers
Š D – Project Portfolio Management Tools and Techniques
- Introduction
- Overview of Tools and Techniques for Project Portfolio
Management
- Tools and Techniques to use for Each of the Portfolio
Management Sub-processes
Š Aligning Process Group
Š Monitoring Process Group
The Portfolio Management Framework
Section I – Chapter 1 - Introduction
‰ Purpose of The Standard for Portfolio Management
Š “…To describe generally accepted processes associated with
portfolio management.”
‰ What is a Portfolio?
Š “a collection of projects and/or programs and other work that
are grouped together to facilitate the effective management of
that work to meet strategic business objectives.”
Section I – Chapter 1 - Introduction
‰ What is Portfolio Management?
Š “...the centralized management of one or more portfolios, which
includes identifying, prioritizing, authorizing, managing and
controlling projects, programs and other related work, to achieve
specific strategic business objectives.”
Section I – Chapter 1 - Introduction
‰ The Link With Organizational Strategy
Š “From the vision and mission, the organizational strategy and
objectives are developed. Execution of the strategy requires the
application of strategic management processes, systems, and tools to
define and develop:
- High level operations
planning and
management
- Portfolio planning and
management.”
Section I – Chapter 1 - Introduction
‰ The Link Between Portfolio Management and
Organizational Governance
Š “Governance is the act of creating and using a framework to
align, organize and execute activities in a collectively
coherent and intelligible manner in order to meet goals.”
Section I – Chapter 1 - Introduction
‰ The Link Between Portfolio Management and Operations
Management
Š “Portfolio management interacts with and impacts a number of
organizational functions…who can be stakeholders…sponsors…or
customers of various components”
Š Finance
- Financial information, Financial goals, Budget, Benefits
Š Marketing
- Market analysis, Benchmarking, Opportunities, Regulatory
Obligations, Value, Customers, etc.
Š Corporate Communications
- Strategic communication, Stakeholder information, progress reports,
Project coordination, etc.
Š Human resource Management
- Enterprise resource planning, Skills management, Capacity
management, Change management, etc.
Section I – Chapter 1 - Introduction
‰ Role of the Portfolio Manager
Š “…typically a senior manager or senior
management team, responsible for monitoring and
managing assigned portfolios in the following ways”
- Playing a key role in project prioritization…
- Providing key stakeholders with timely assessment…
- Measuring the value to the organization…
- Ensuring timely and consistent communication…
- Participating in program and project reviews…
Section I – Chapter 2 – Process and Organization

‰ Portfolio Management Process Overview

Š Links with strategy
- “…includes processes to collect, identify, categorize,
evaluate, select, prioritize, balance, authorize and
review components within the portfolio to evaluate how
well they are performing in relation to the key indicators
and the strategic plan.”
Š Components will be reviewed and validated in relation to
Š Alignment with corporate strategy
Š Viability of the component based on key indicators
Š Value
Š Relationship with other components
Š Available resources
Š Additions and deletions of components
Section I – Chapter 2 – Process and Organization
‰ Portfolio Stakeholder Roles and Responsibilities
Š “…Those who are actively involved with the portfolio or who
have interest that may be positively or negatively affected by
the portfolio management”
Š Executive Managers
Š Portfolio Review Board
Š Portfolio Managers
Š Sponsors
Š Program Managers
Š Project Managers
Š Program/Project Management Office
Š Project Team
Š Operations Management
Š Functional Managers
Š Finance Managers
Š Customers
Š Vendors/Business Partners
The Standard for Portfolio Management
Section II – Chapter 3 – Process
‰ “Portfolio management is a business process...”

Š “…identifies those portfolio management processes

that have been recognized as generally accepted
practices for most project portfolios most of the
time.”

Š “These processes apply globally and across

industry groups.”

Š “This standard presents and describes the required

elements for portfolio management…it does not
intend to explain how to implement and utilize
portfolio management…”
Section II – Chapter 3 – Process
‰ Portfolio Management Process Groups
Š Aligning Process Group
- Determines how components will be identified, categorized,
evaluated, selected, prioritized and authorized
Š Monitoring and Controlling Process Group
- Reviews performance indicators periodically for alignment
with strategic objectives
Section II – Chapter 3 – Process
‰ Portfolio Management Process Interactions
Section II – Chapter 3 – Process
‰ Portfolio Management Process Interactions
Š Aligning Process Group
- Identification: Organized list of acceptable components.
- Categorization: Group components into relevant business groups.
- Evaluation: Evaluate components to compare them.
- Selection: Select the best components by category.
- Prioritization: Rank components by importance in value/risk and time.
- Portfolio balancing: Develop the portfolio component mix with the
greatest potential to support the organization’s strategic objectives.
-Authorization: Formally allocate financial and human resources.
Š Monitoring and Controlling Process Group
- Portfolio reporting and review: Review value and performance
indicators.
- Strategic change: Realign the portfolio if needed.
Appendices – Tools and Techniques
Section III – Appendices – Tools and techniques
‰ Identification
Š Define a common set of key descriptors
- Component identification, number, name, description, etc.
- Class of component
- Strategic objectives supported
- Quantitative benefits
- Qualitative benefits
- Resources required
- Customer
- Sponsor
- Stakeholders
- Timescale
- Deliverables
- Risks
- Etc.
Section III – Appendices – Tools and techniques

‰ Categorization
Š Aligned with the strategic objectives
- Revenues
- Increased profitability
- Risk reduction
- Efficiency improvement
- Legal obligation
- Market share increase
- Process improvement
- Continuous improvement
- Business imperative
Section III – Appendices – Tools and techniques

‰ Evaluation
Š Scoring models and graphical representations
Section III – Appendices – Tools and techniques

‰ Selection
Š Human resource capacity analysis
Š Financial capacity analysis
Š Asset capacity analysis
Section III – Appendices – Tools and techniques

‰ Prioritization
Š Weighted ranking and scoring techniques
Section III – Appendices – Tools and techniques

‰ Balancing
Š Cost benefit, Quantitative, Scenario, Profitability
Analysis and Graphical Analytical Methods
Section III – Appendices – Tools and techniques

‰ Monitoring and Controlling

Š Project/Portfolio Management System
Š Financial Reporting Systems
Š Performance Measurement techniques
Š Graphical representations
Questions?