Over the last couple of years, there has been much talk about portfolio management and how, in a business world as fast-paced and complex as the one we have today, relying on a singular project to deliver desired results and work with a satisfying level of unison is overly optimistic.
So, it’s really no surprise that these days we are experiencing massive growth in the popularity of services like portfolio management. If you are unfamiliar with the term, this novel business concept represents using a more holistic form of business management that doesn’t treat projects on an individual level but rather treat them as a whole, looks for their mutual connections, and honestly assesses how their results fit broader corporate goals.
But how does this new and exciting approach to project management actually work, and, more importantly, how can your company benefit from zooming out and taking a view of project development as a unified process? Let`s try and find out together.
Distinguishing good projects from bad ones
Let us start by saying that focusing too heavily on singular projects often gives managers and business owners a tunnel vision that prevents them from honestly assessing whether these projects were a good idea in the first place or how well they factor into the long-term corporate plans. As a result, the companies tend to latch on to them far longer than necessary. Aside from practically rooting out that problem, the unique data gathered by portfolio management gives the decision-makers an excellent reference point for assessing promising ideas while they are still in the early stages of development.
Stronger focus on company goals
Project management and portfolio management are very similar. However, as the name suggests, the first mention puts a much higher focus on the success of one project, which may not always play into the broader corporate goals. Granted, reaching some important milestone is always good, but we also need to consider the sustainability of such projects, the assets needed to pull them through, how they contribute to the ROI, and so on. These things are not only brought to the table with efficient portfolio management but put into an absolute focus and make a backbone of your future efforts.
More efficient risk management
Carrying out any sort of project inevitably carries with itself a certain amount of risk. However, the goal of every responsible business owner or manager is to keep that risk at a bare minimum. That is why professionally managed portfolios are gradually growing from a novelty to an absolute requirement. If we don’t have a broader look at the pending projects as well as historical data outlining relevant KPIs and as well as risk factors, we will never be able to truly assess what are the chances of some ventures falling apart. Professional management also introduces a great level of quality control and project consistency.
Allowing for proper prioritization
Successful organizations are laid out on streamlined and effective workflows. However, to create such workflows, the companies need to clearly understand what projects and tasks need to take priority. Without these insights, the pending activities will inevitably hit various bottlenecks and roadblocks. And, of course, to get a good idea about which of these projects need to be put into the forefront, we need to know how they are mutually connected and affect each other. Putting this important task under the control of a third party makes sure prioritization is impartial and data-based.
More flexible and leaner operations
This is the direct result of more efficient and comprehensive project prioritization. By ensuring the top priorities are completed in time, you are making more room for eventual adjustment and timetable changes. Furthermore, the bird’s eye perspective we have mentioned in one of the previous sections gives the people in charge a very good idea of where these adjustments need to be made to produce the biggest effect. Since your employees are not in direct charge of this process, they are free for deployment to such tasks. So, portfolio management makes the business more flexible on the micro and macro levels.
A step toward project standardization
Portfolio management is a very complex process. To take effect, this activity needs to have some sort of consistency, consider previous projects, supervise the development of the pending activities, leave rich documentation, and point out detailed observations about what works and what needs to be avoided. All these processes don’t need to be a one-time effort. On the contrary, with only a bit more purpose and strategic thinking, portfolio management activities can lay the foundations for highly effective project standardizations, making future ventures more purposeful.
Strategic long-term decision making
Last but not least, we would like to point out that all the previous considerations dealt with managing ongoing projects and ensuring they work in perfect unison. But, one of the greatest strengths of professional portfolio management is that, by engaging in this critical activity, the decision-makers can get a much more thorough, strategic, and long-term insight into the activities of their organizations. Having such a thorough insight into their projects’ scope, costs, resources, outcomes, and mutual relations makes owners far more capable of making long-term moves.
So, there you have it – the top six reasons your business could benefit from trying out professional portfolio management and using its benefits to ensure their ongoing and future projects are always aligned with each other and with broader corporate goals. Even though these topics may seem a bit too abstract at first glance, the business world is becoming increasingly competitive with each passing day. That is why any strategy that can improve the efficiency of your business should, by all means, be used – especially if we are talking about a process as valuable as portfolio management. If anything, you have virtually nothing to lose by taking different approaches to the same problem.