Portfolio Management Tools
As the project management profession matures, the number of automated portfolio management tools that claim to control and maximize the value of the organization’s portfolio of projects increases dramatically. While there is nothing wrong with these tools, my observations and experience lead me to believe that…
Many organizations are not ready for sophisticated portfolio management tools.
Why? It is because a lot of organizations haven’t yet mastered the basics of portfolio management. Before portfolio management tools are purchased and rolled out, the basics must be in place. Basics like putting all the projects in priority order does not require a fancy tool.
Let’s quickly define a portfolio. A portfolio can include multiple programs, and/or the projects within a single program can be a portfolio. A portfolio is just a logical grouping of projects under a common leadership structure.
Buying a fancy tool is no substitute for discipline. No tool should dictate the course of action. Tools are just inputs to the decision maker’s judgment process. Any tool should ensure thoroughness, and structure the information in a way that allows the decision maker to make a decision.
This includes helping the decision maker know what information is firm, what information is fuzzy, how the information was processed, what information was excluded, and what the tool may recommend. The decision maker then must assess all the input before factoring in his or her experience or intuition and making the actual decision.
I believe value based decision making, using the analytic hierarchy process is the best practice for establishing priorities among projects and have helped several organizations in both the public and private sectors establish value structures, managing portfolios that have exceeded $1 billion as well as very small portfolios.
During the process, I often encounter two types of decision makers: One type is scared to death that the tool will dictate the outcome without his or her judgment, and the other is scared to death the tool won’t dictate to him or her the exact course of action.
Remember, tools are there to provide structure and an accurate representation of all the factors relevant to the decision, not to dictate to the decision maker or to relieve him or her of responsibility. Even though a tool may provide a recommended list of projects, the judgment of the decision maker should prevail. Accountability is with the decision maker not the portfolio management tool.
This article supports Chapter 10 of my book The Handbook of Program Management
Copyright 2016 SEBA® Solutions Inc.