In this video, Andy Jordan introduces the seven steps in the portfolio management lifecycle and explains the importance of them all working together to deliver success.
- Portfolio management is a business management approach that must operate in all parts of the portfolio lifecycle to be successful. There are seven distinct phases of the portfolio lifecycle. The first step is idea generation and capture. This is where the seeds of the portfolio are planted. You reach out into all areas of the business, find the ideas and suggestion that will help you achieve your goals, and identify the best ones to submit for further work. Second is business casing and analysis.
In this step, your best ideas are submitted to more formal analysis, developing high-level estimates of the costs and benefits associated with them. Ideas evolve into proposals and are refined into more solid concepts or projects. Third is capacity and capability modeling. Projects being considered for approval are now assessed in terms of their feasibility to deliver. You consider whether you have or whether you can get the people and skills needed to complete them, both individually and collectively.
Fourth, selection and prioritization. The initial approval of projects for inclusion in the portfolio is fairly simple. It's based on the work done in steps one to three, however, you must prioritize and schedule projects carefully to achieve the goals. And you'll need to validate approvals and reprioritize throughout the portfolio's delivery. In portfolio management, this is an ongoing process for the rest of the lifecycle. Fifth is strategic execution. Here you move into project delivery. That's something most businesses are familiar with.
But from a portfolio management concept, you're managing those projects to achieve benefits not deliverables. It's a very different approach. Sixth, managing change. This is another area of the portfolio lifecycle you're probably familiar with, but there are more, and more complex, drivers of change from a portfolio management standpoint than in traditional project management. And last is benefits and variance management. This final step of the portfolio lifecycle is where all of the hard work pays off.
The goals and objectives are achieved as the benefits planned for are delivered. Portfolio management validates those achievements and manages any variances from expectations. Each of these separate elements is critical to portfolio management success. But most important of all is the need to manage these seven pieces as part of an overall portfolio management approach. Individually, each piece helps the business improve performance. Collectively, they're a springboard to strategic excellence.
- Identify how to connect the strategy with delivery in portfolio management.
- Explain the process of managing alignment.
- Define a portfolio lifecycle.
- Explore business casing and analysis in portfolio management.
- Examine capacity and capability planning in portfolio management.
- Break down selection and prioritization in portfolio management.
- Recognize the elements of managing change in portfolio management.