5 Key Benefits of Effective Portfolio Management.
First of all….What is Portfolio Management?
Portfolio management is the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance.Portfolio Management grants a trusted (and often senior) group of individuals with company-wide procedural oversight, with the intention of making the execution of corporate projects effective, timely, and to budget.
“The thought of multi-faceted or project-centric organisations operating without an effective Portfolio Management tool is risky at best, and financially damaging at worst.”
The role of Portfolio Manager can be likened to that of an orchestral conductor – whilst the individual is responsible for bringing all the disparate elements of a piece of work together effectively, the final outcome is still reliant on effective contributions from all relevant parties. Effective Portfolio Management makes the latter infinitely more likely.
Here at Hyde Park Solutions we know that data is vital. Without data outcomes cannot be measured, and if a project cannot be measured, it cannot be adjusted or course-corrected.
Portfolio Management is all about having this important data to hand. This data delivers the vital procedural oversight Portfolio Management is meant to provide.
It goes without saying we’re big believers in the effectiveness and the vital need for effective Portfolio Management in business conducting multiple projects at once (and the data supports this belief).
So, with that in mind we’ve put together five key benefits of effective Portfolio Management:
1. Balancing the Risks posed by Projects
Risk is mitigated by data. The more information you have at your disposal with regards to budget, complexities, and timeframes, with regards to projects being undertaken, the less likely you are to run into any issues regarding the above.
All projects have risks – that will never change. Effective Portfolio Management, however, is a fantastic way to take stock of all the enterprises activates at any given moment, with a view to flagging any potential issues or situations likely to cause concern. Having all the necessary and required information in one place, and a ‘single source of truth,’ is an excellent risk counter-measure. Projects often spiral out of scope and budget when little or no accountably is placed upon achieving and maintaining procedural oversight.
2. Faster Project Turn Around
Effective Portfolio & Project Management (PPM), can improve project turnaround by up to 10%. PPM practices tend to encourage increased project governance, workflow, and standardisation – which in turn leads to increased efficiency when carrying out repeatable processes – which may often form a sizeable part of any portfolio – for example, a road builder will build many roads – this is a similar task that can be carried out faster once aligned and defined procedural processes are in place. Portfolio Management achieves this.
3. Optimal Resource Utilisation & Allocation.
PPM mobilises your resources to invest their best and maximum efforts onto the most feasible ventures. Simply put, this means duplicate efforts are not wasted on activities with no monetary benefits to show for it. Effective PPM allows Project Professionals to identify flagging projects early on – minimising time & financial loss if the need to halt or stop the project is deemed necessary. Whilst the thought of halting, or even abandoning a large project may be daunting, it is one of the essential roles of the effective and decisive Portfolio Manager. These funds saved can then be re-invested into projects more likely to yield desirable outcomes. Portfolio Managers will often find themselves in discussion with senior staff with regards to project viabilities.
4. Prove the Value to Stakeholders
No top-level, or capital intensive project gets off the floor without key stakeholder sign off. This group includes line-of-business managers, project managers, financial analysts and the executive teams. It is not only the actual value of what you are doing and what you accomplish, but the perception of value, that counts. And when Project Professionals are able to achieve the reality and perception of a well-oiled and functional PMO, lots of benefits accrue. You can greatly expand both external and internal morale and reduce the time it takes to produce executive and board-level reports. It’s a win win situation.
5. See the Big Picture
Probably the most important aspect and goal of any Portfolio Management campaign, is to be able to ‘see the big picture.’ This is different to achieving procedural oversight. Seeing the big picture involves being able to gauge, as a whole, the corporate wellbeing of an organisation. Reports coming in late from the finance department? Maybe it’s worth senior staff dropping in to gauge morale. Noticed a gradual downshift in the speed and quality of procurement? Maybe it’s time to consider alternative strategies. Effective PPM is not only aligning and driving processes, but also for the monitoring of the more global, or net, situation any given company is in. This is valuable information.
Having designed, built, and installed numerous Oracle Primavera Project & Portfolio Management systems for clients across the globe, we can personally attest to the vast and positive impact such systems have on the corporate and financial wellbeing of a company. The thought of multi-faceted or project-centric organisations operating without an effective Portfolio Management tool is risky at best, and financially damaging at worst.
We strongly believe in the myriad of benefits to be reaped via the implementation of an effective portfolio management system.
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