Objectives of Portfolio Management

With the assistance of portfolio management you can organize a series of projects into a single portfolio consisting of reports. All the related aspects of a project such as project objectives, accomplishments and achievements, resources available, risks involved, costs, timelines, and other critical factors can be captured in one single portfolio.


The executives or the official responsible for the project can make use of the portfolio management for critically reviewing the entire portfolio, appropriately allocate and spread the available resources, and make changes in projects so as to reap maximum department based returns.

In any product development the Portfolio Management is very useful in selecting a portfolio for the proposed new product and to maximize the portfolio value or the profitability. Further it can also be made use for providing balance, support and the needed strategies for the enterprise.

As the name goes the job of a project portfolio management group is to plan or devise a strategy with which the portfolio can be managed much similar to any investor’s managing activities involving various stocks, mutual funds, secured fixed deposits, and bonds. The main purpose or the aim of any portfolio investment will be on the lines of increasing profits or returns with reduced risks and within a limited period.

In the world of Information Technology, project managers can effectively use the tools of the project portfolio management in identifying the redundancies or superfluous processes, and to evenly distribute resources so as to keep a close watch over the progress and to direct the progress in the right and desired direction in case of need. Majority of the investments made in the IT scenario in the last ten years actually are aimed to determine the nature of returns from the investments made and the possible expected results in the future.

In any organization the Product Committee that comprises senior executives is vested with the responsibility of the Portfolio Management and they will meet at regular intervals to evaluate the processes and make important decisions to correct any product portfolio. And more commonly in an organization, only this committee or the group is engaged in conducting the stage-gate reviews.

Initially few of the strategies relating to products such as customers, products, markets, favourable strategy to be adopted, prevailing competitive environment, etc., are evolved to serve as a starting point or as a first step. The possible second step would be on assessing the financial position and requirement, and the availability of resources that can support the portfolio.

Next the feasibility or the profitability of the project is to be assessed in the third step and at the same time the associated risks, additional requirements of various inputs, and other relevant factors are also to be ascertained in this stage.

The right and choice of making product decisions solely lies with the individual company but however the company should be able to apply certain criteria such as risk v/s rewards, market v/s product line, strategy v/s returns, new products v/s progress, long-term v/s short-term, etc., while making their product decisions. In support of portfolio management you also get various techniques such as scoring techniques, heuristic models, visual or mapping techniques.

Mathematical or certain heuristic models were used in the earlier Portfolio Management processes for optimizing the project profitability and this particular approach made it easy to seamlessly balance the existing portfolio with that of the company’s strategies.

Out of the various techniques, the Scoring techniques can be made use for arriving at exact investment requirements, for enhancing profitability and to help in many strategic planning. This particular technique lays little more stress on the financial measures and will not be able to optimize things in a mixed project scenario.

If you are in need to visualize your portfolio’s standing or balance, then you can use the mapping techniques where graphical presentation is applied. Any such graphical presentation will be in two dimensional graph form and you can visualize the trade-off or balance between two factors such as marketplace fit v/s coverage of goods manufactured, risks v/s profitability, success probability v/s monetary returns, etc.

Once the company or the organization finalizes the project priorities, then it need to decide on the appropriate business plan and the level of investments to be made based on the available resources. One has to give a high level of priority at this level and each and every detail is to be further analyzed critically and if possible all the project details are to be further broken down into manageable sizes so as to match with the broader business plan envisaged.

With the assistance of the Mercury Portfolio Management, it will be easy for you to manage and govern your IT portfolio and you can apply all the scientific principles and you will also be able to evaluate, balance, prioritize, and approve both new initiatives and your existing portfolio.

It is also possible to analyze the different scenarios and you can ensure proper alignment with your existing strategies and be able to correctly identify any of the constraints. With the help of this portfolio management software you will be in a better position to integrate your strategic, financial, functional, and technical reviews together and merge all into a well-unified governance process.

The portfolio management software also enables automatic capturing of your real time IT status and provide accurate, state of the art, realistic and current information that can make your decision process simple and effective. You will be in a commanding position to govern the portfolio lifecycle in its entirety and in all stages right from the proposal initiation through benefits realization. In a nutshell, you will have ways and means to align all your IT portfolio more efficiently.


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| How do you implement modern portfolio theory | Understanding portfolio rebalancing | Portfolio construction methodology |

 

 

 


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