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Project Portfolio Management

            Portfolio management in business is a very crucial process for the business organizations and firms in the market. The process of prioritizing, selecting and clarifying the ventures the firm intends to undertake is project portfolio management. This process is very important since it enables the company to plan for its projects effectively. This process encompasses techniques that make sure that the projects in question are in line with the objectives of the company. If the techniques in question are effective, the firm will register remarkable growth levels. A portfolio management process needs to be strong in order to increase the chances of its success in the organization that chooses to implement it.

If the process is not effective on the other hand, it may result in the reduction of the desirability of the product the company is producing. For this reason, the organization should take its time to create efficient techniques that will ensure that it will succeed. Specific and strategic steps need to be followed in order to ensure that the project portfolio management process is effectual. Some steps the organization may take include consolidation of demand, management of the portfolio, management of the resources the company owns and project execution. Each of the named steps will be discussed in detail with the provision of the advantages and disadvantages that are related to each.

Step one: Demand Consolidation

            Consolidation of demand is the first step towards achievement of a valuable portfolio management process. Consolidating demand is an essential step since it ensures that the firm is aware of all the demands that placed on it. This can be done by the use of IT. The use of IT is recommended since it reduces the workload on the employees yet it still provides high levels of accuracy to the organization. In most cases, the company has several projects that have been suggested by the management of the company. However, not all the projects are viable. For this reason, the company has to sort out the most feasible ones and implement them. The most feasible ones should be the ones with few risks associated with them ant they should also ensure a high rate of returns to the business.

The process of demand consolidation enables the firm to decide on the most suitable projects to be implemented. Is does this by the provision of the projected demand values related to each project. For the one with higher demand, it will be considered a high business priority and, therefore, will be implemented.  However, the demand is not the only factor that should be considered during the selection of the most viable project. The organization should also consider the resources that they have as well as the number of the staff. In addition to this, they should ensure that the staff in question would be able to perform all the duties they will be required to with the inception of the new project.

Another thing the company should keep in mind while selecting the process is the regulations that have been put in place by the government. These laws may prohibit the project the company intended to implement. For this reason, they should investigate the laws in their industry and decide whether the project will infringe on these regulations or not. If it does not break any of the laws set by the government, the company can go ahead with the project. After all these considerations have been addressed, the company may initiate the preliminary implementation processes of the project they have selected. Therefore, demand consolidation is a very important step in the selection of the most viable project a company may want to implement.

Step two: Management of the Portfolio     

The second step towards the achievement of an effective project portfolio management is the management of the portfolio. In particular, this step stresses on the unity of the departments in the organization in question. For most companies they view their portfolios as individual projects rather than one portfolio belonging to them. This individualization causes some projects to be more successful than others do. Because of this, the different departments develop unhealthy competition towards each other. This unwarranted competition makes the poorly performing departments to perform even worse in most cases. For this reason, the morale of the employees in that department is significantly reduced. Subsequently, the productivity of the department in question also decreases.

With the decreased productivity, the output of the company is also affected and finally the firm will have to shoulder some huge losses if this is not tackled in time. However, with the proper management of the portfolio, this may all be avoided. The company should view the projects as one even though they may be working on different things. This will foster good relationships within the company and they will help each other out if need be. Unhealthy competition will be eliminated in this case and the productivity of the firm will then increase simultaneously.

Portfolio management is also advantageous to the firm in that it will be able to monitor the different projects that have been implemented. In the case of large companies, it may be difficult for them to keep an eye on all the projects they have. This may result in the success of a few while the greater majority will be failures. However, with efficient portfolio management, they will be able to supervise all the projects that are going on in the firm. This process may be made even more effective by the use of technology in order to merge all the systems into one main system. Technology like the use of cloud computing may be utilized in order to facilitate effective supervision of the projects in the organization.

Step three: Project Execution

Another step that will ensure successful project portfolio management is the execution of the project. This process involves the intricate details that pertain to the implementation of the project in question by the organization. The process of implementation has to be precise to facilitate the success of the project. It should be remembered that the organizations are constantly faced with several different projects. It is their decision to select the most suitable ones for their companies. This may be very difficult and may take a long time. However, the selection process is not crucial, implementation for the selected project is.

The implementation process should be developed exclusively for the needs of the company in question. This is because if the execution of the project is faulty, the project will not be successful. The management of the company should collaborate in order to come up with the best execution strategies for the project they plan to implement. The project execution process should encompass the risks that may be associated with the implementation for the project. These effects may involve the firm and the surrounding communities. If these risks pose a greater danger, the company may decide to halt the execution of the project since it will have a negative effect on the people who stay around the company. An example of such a situation occurs mostly in the chemical manufacturing organizations.

Therefore, the company must ensure the project will not have any negative effects on the community that surrounds the company. Project execution is an important element of successful project portfolio management. This is why several companies concentrate a lot on this aspect of the project. Effectual project evaluation should encompass all the processes and stages that will be undertaken. Failure of good planning on the side of the management of the company will undoubtedly result in the failure of the project in question. The failure of a project will have dramatic effects on the net worth of business. Therefore, the process of project execution is an important step in the portfolio management.

Step four: Resource Management

The fourth step is resource management. Resources in an organization are not limited to the work force as several people think. Apart from the employees a company has, other resources include the assets the company may own such as buildings and computers for instance. Resource management is another key step that has to be regarded in order to attain effective project portfolio management. This is because the labor of the firm is the most important aspect of the company. Without effective labor force, the company would not succeed at all. For this reason, in order to make sure that the project portfolio is managed effectively, the human resources should be considered.

Before the selection and implementation of a project, the management of the firm should investigate if the employees will be able to support the project. A suitable project should not cause any strain to the employees. Strain will reduce the productivity of the employees’ and subsequently the company. Therefore, since the employees will the key implementers of the proposed project, their well-being should be considered. Their consideration will undoubtedly ascertain that the project will be executed successfully without any problems. The appropriate staff should be selected for various projects. This is because different employees have varied strengths. For this reason, based on the project to be realized, the management should choose the most qualified personnel to work on the project. This will increase the chances of the project’s success since the most appropriate people have been selected.

Step five: Inclusion of all investments in a central repository

The final step to ensure proper project portfolio management is the inclusion of all the company’s investments in a central repository. The investments of a company are very important since they are alternative sources of capital for the company. Repositories refer to a set of databases, which business organizations use to store sensitive information that pertains to the company. Therefore, a central depository is the main server in the institution where all the information is locates. From the central repository, all the other computers may access information provided they have the passwords or clearance to do so. Each company should set up a central repository to improve on their levels of security.

The central repository will include information like the different investors in the company and the net worth of the company. In addition to this, the repository may also include the projects the company is interested in as well as the assets the business owns. Since this information is important to the organization, it should be stored safely since its loss will cause the firm a lot of trouble. The inception of a central repository in the organization will improve the insight, control and visibility of the business. Improved control will ensure that the productivity of the firm increases. Subsequently, the company will make more profits and will develop more. The centralization of this fundamental data in repositories is chief in effective project portfolio.

The five steps that have been discussed will ensure that the process of project portfolio management is conducted smoothly. Portfolio management is critical for the success of a business. This is because it ensures that the profitability of the business venture is maintained. Business organizations are faced with several business proposals and they have to select the best ones for the organization. The utilization of these steps may help several businesses to select the most appropriate projects for themselves. Therefore, the five steps enumerated in this paper will play a great role on the success of the portfolio management process. For this reason, the businesses, which want to take up the process of project portfolio management, should consider keenly these steps since they will prove invaluable in the processes in question.