Overview of Portfolio Management
Portfolio management is an integral part of the project management process. Portfolio management is a process of selecting or identifying a particular project, which has been intended to be implemented by the project management. It is a fact that the project manager has to choose, prioritize, and organize the whole project, as it must align with the strategic goals and objectives of the company. The most important thing for project management is to keep the balance regarding all changes or project activities or initiatives. In the project management process, project management has to streamline activities or features, which can enable a significant return on investment. Getting the return on investment, according to expectation, can justify the effectiveness of the portfolio management (Burn, 2013). In the project management process, the project manager can enable effective portfolio management to make effective technology-related decisions. Apart from it, project management is always in a better position to make decisions regarding work architecture, capacity planning, and many investment decisions. For instance, in an organization that aims to enhance the visibility of the product development process, it has to prioritize products which contain more value. Thus, arranging pertinent or related things can justify the existence and significance of portfolio management (Chatzipanos & Wu, 2018).
Understanding portfolio management through elaborating some key insights is the right approach, as it can set the foundation or ground to consider the appropriate business case. For instance, it can be said that portfolio management is a process of choosing or selecting an appropriate investment mix. This project process is associated with investment decisions, which can help to anticipate or predict the retrain on investment. One of the primary purposes or advancement of portfolio management is to manage the collection of different investments and make them consistent with the goals of investors. In the business case, the investor can be a corporation. Therefore, alignment with the goals and objectives of the corporation is to be done through portfolio management (EPMC Inc., 2011).
Portfolio Management Process
Portfolio management is a process of choosing activities or initiatives, which can enable an adequate return on investments by reducing or eliminating risks. These risks are to be removed or reduced when achieving or gaining the return on investment. The portfolio management process is associated with several steps. Interestingly, each step in this process can enable an adequate return on investment. For instance, some complex processes in portfolio management are below.
The first step is to identify different objectives and constraints in project management. Early identification of these objectives or constraints is the right approach to make effective strategies initially. Identification of the objective and contracts is to be done with the perspective of the investor, as newly shaped goals or objectives are to be aligned with the firm’s or investors’ goals and objectives. Different assets are to be included in the portfolio management, and must be identified (Kodukula, 2014). The most important thing is to spread the risk and reduce the visibility of risk. The volume of the asset mix depends on the investment limit. The formulation of the asset strategy comes after the selection of the right mix of assets. At this stage, the project management can link with different alternatives. First, it can make an active portfolio strategy. Second, it can make a passive portfolio strategy. The proactive approach is always associated with a high risk. On the other hand, the passive portfolio strategy is associated with the predetermined level of risk. The selection of securities seems worthy, as it can secure the whole project process. After selecting the securities, portfolio execution comes into the life where project management buys or sells securities. In portfolio revision, monitoring and reviewing script according to market condition is always in the limelight. Finally, portfolio management has to assess the performance of the project portfolio management, as some changes or modifications are to be depicted to be relevant (Kodukula, 2014).
Terminology
| Terms | Definitions |
| Business Case | The business case depicts the proposed project, along with several functional requirements, decisions, and impacted products. |
| Portfolio Management Team | The portfolio management team depicts all those people or individuals who have to conduct several activities or tale initiatives. The role and responsibility of each individual are to be defined. |
| Steering Committee | The combination of project managers, program managers, and technical representatives is called a steering committee. In this committee, collaborative or participative decisions are to be made |
| Steering Committee Chair | The authority makes the final call in the end. Getting approval from the senior management is also one of the primary roles of the steering committee chair. |
| Authorities | Funding and championing release are the two leading roles of authorities, and these roles make them quite visible in this regard. |
| Agents | Planning and tracking release activities are the primary roles of agents in the portfolio management process. |
The Business Case
The name of the business case is Cost-Benefit Analysis of Providing Non-Emergency Medical Transportation. It has been revealed that people in the United States face difficulties when intending to get medical transportation. It has been exposed that 3.6 million Americans miss or contain delayed non-emergency medical treatment every year, and it assisted in identifying the need for non-emergency medical transport. Of course, the corporation has to predict or anticipate the cost of this project along with the possible outcomes or return on investments. The most important thing is to identify people who are transportation disadvantaged persons. The best thing that project management can do is to get pertinent information or insights from these people and shape strategies or execute the whole project to meet needs accordingly. Of course, the objective of the project is to complete the project on a limited budget or reduce the cost and, finally, get expected or anticipated benefits (Perry, 2011).
Process Overview
The diagram of portfolio management is to be presented below. It depicts the whole process of portfolio management. Business cases, such as Cost-Benefit Analysis of Providing Non-Emergency Medical Transportation, is also triggered by these phases, which are depicted in the portfolio management process diagram.
In this figure, the portfolio management process is linked to four significant steps. These four significant steps, especially in this particular business case, are the strategic planning process, aligning process group, monitoring and controlling process group, and component processes. The strategic planning process is associated with the current strategic plan, goals, performance criteria, and capacity definition. On the other hand, the aligning process group is linked with identification, categorization, evaluation, and selection. Monitoring and control include portfolio periodic reporting review and strategic change. Finally, component processes are linked with component execution and reporting.
Each phase activity is based on several steps, such as entry criteria, phase activities, timing, and exit criteria. The elaboration of the different phases of portfolio management is below.
Phase 1: Initial Project Evaluation
Entry Criteria
The project evaluation starts with the availability of different business cases. These business cases are cost-benefit analysis of providing non-emergency medical transportation and next-generation air transportation system. Now, project management has been asked to evaluate these business cases. Of course, an early prioritization is needed to make the final call in the end. The most important thing is to identify possible activities, vision, and resources, which are required in both business cases. Thus, it is how the evaluation works for the project or portfolio management (Rajegopal, McGuin, & Waller, 2007).
Phase Activities
The entry criterion is based on the alignment score, as it can help to prioritize the product. Based on the alignment score, portfolio management will be in a better position to calculate the weighted score. The project with a higher weighted score will be prioritized or selected for further analysis. Based on the weight score of the project, the most important thing is to conduct fuzzy estimation and detailed analysis estimation. However, these estimations are based on the weighted score by using an excel sheet. For instance, both business cases which have been mentioned above are to be placed on the excel sheet to calculate the weighted score.
Apart from it, the high-level estimate for the next-generation air transportation system and non-emergency medical transportation. This estimation is based on the feature list of the project. It seems a high-level estimation, which can be conducted for short, large, and very large ranges. It is a fact that the fuzzy estimate is based on time spam or months. For instance, in both these business cases, there is a need to set the timeline, such as 0-3 months, 1-5 months, 4-9, and 6-12 months. Another important thing is to indicate the uncertainty in these time limits.
On the other hand, when conducting the detailed analysis estimation, the role of the technical staff or technical team comes into life. In short, it can be said that the professional team is a related source to conduct a comprehensive investigation. The technical team, after ensuring the availability of these business cases, has to shape the prioritized list. It is to mention that these business cases are quite open, and extensive investigation can be conducted. The main reason for this investigation is to identify the project for further investigation. The project portfolio manager or team will have to submit the prioritized lists to a senior manager or imperative stakeholders. The senior manager or critical stakeholders will have to approve the business case, or it can be returned for further modifications.
| Proposed Projects | 10% | 25% | 25% | 20% | 10% | 10% | Weighting |
| Non-Emergency Medical Transportation | 1 | 3 | 4 | 5 | 4 | 3 | 3.3 |
| Next Generation Air Transportation | 1 | 2 | 5 | 4 | 2 | 2 | 2.7 |
10%: Advanced Corporate Mission
25%: Generating Revenues
25%: Positive ROI
20%: Improving Competitive Advantage
10%: Improve Customer Satisfaction
10%: Executive Sponsorship
Timing
Once a month, the review of the business cases will occur.
Exit Criteria
The exit criteria must be shaped in the initial phase. For instance, the portfolio manager will consider the phase completions if the following aspects are met.
- The phase will be complete by the portfolio management if fuzzy and detail analysis or estimation is completed or conducted.
- On the other hand, the phase will be completed only when the business owner is informed regarding the alignment score and estimations.
- The phase will be completed only if the prioritizing list is updated. Based on the result of the phase, the prioritized list is to be updated. The phase is completed only if the portfolio management understands that one particular project is to be prioritized or selected for further investigation (Rad & Levin, 2006).
Phase 2: Detailed Project Evaluation
The second case is regarding the detailed project evaluation. For instance, after prioritizing the case, which is a cost-benefit analysis of providing non-emergency medical transportation, the detailed project evaluation is to be conducted.
Entry Criteria
The management will be entered into this phase only if it has access to the prioritized project list. In short, it can be said that having the prioritized project or business case sets the foundation or ground to enter this phase.
Phase Activities
One of the prominent activities is to identify the high-level business requirements and possible constraints. For instance, the high-level business requirement for non-emergency medical transport is the infrastructure in the city, advanced vehicles, essential medical equipment, staff training, and integration with top healthcare organizations. Of course, technological tools or equipment are also included in these high-level business or functional requirements. By using these technologies, people who miss the non-emergency medical transportation can interact with the team. A well-controlled and coordinated system is to be developed to initiate this service for people, and it is included in the high-level business or functional requirement (Perry, 2011).
The return-on-investment analysis is also to be conducted regarding the selected project. Project management can have multiple factors to depict or predict the return on investment. For instance, more people will be getting access to non-emergency medical transportation. Improved healthcare in the country is a significant return on investment. However, on the other hand, the return on investment is to be assessed or evaluated by predicting the usability of the transport. The outcomes must be exceeded from the cost, In short, it can be affirmed that benefits must be increased as compared to existing cost, and it can justify the adequate or expected return on investment (Levine, 2010).
The project manager will also analyze the availability of staff, along with their roles and responsibilities. Of course, this phase will identify potential employees of the team, which have to implement or execute the selected or prioritized business case of the project.
Early Requirement Clarification
In the initial requirement clarification, the management has to know or understand why it is going to develop a system for no-emergency transport for people who usually miss conventional medical treatment in ordinary. Describing the high-level objectives is mandatory. Apart from it, technical details and limitations are also to be identified. For instance, in this business case or project, technology integration, staff training, and skill development are included in the technical details. On the other hand, constraints, which may emerge in the form of resistance, are also included in the list. In short, tools and techniques are to be identified or streamlined, which can help to conduct the project or business case incredibly.
Preliminary Estimation
The preliminary estimate includes months, which will be enough to complete the business base of the product. The initial estimation has been mentioned in the above section as well. For instance, 3-6, 6-12, and 12-18 months are to be evaluated. The project portfolio team will be investigating the cost in these months, along with possible activities and constraints. All work which is needed to complete the project is to be identified, and it can justify the preliminary estimation.
Return on Investment Analysis
The return on investment is to be estimated in this particular business case. The return-on-investment model will be used by the portfolio management to demonstrate or streamline the return on investment. The ROI model includes benefits, cost, risk adjustments, risk-adjusted for new cash flow, and cumulative net cash flow. The management of this project has decided to use the simple return on investment model to streamline benefits. The retrain on investment or outcomes must exceed the cost of inputs for the project (EPMC Inc., 2011).
Communication Requirements
The communication process is based on the status of the business case and process or investigation. The communication process can be enhanced to exhibit the completion of date and participants.
Timing
This project portfolio phase is an ongoing process, and evaluation and monitoring is an ongoing process to make some improvements with time. The senior management or key stakeholders are in the best position to reevaluate the project. It can be done in months, as it also described in the above sections.
Exit Criteria
The phase is to be completed if several conditions are met. These conditions are illustrated below.
- The phase will be completed if business requirements, which have been mentioned above are a fulfilled
- The phase will be completed if the preliminary estimation is completed
- The phase will be completed when the adequate retrain investment is predicted or estimated.
- The phase is completed if sponsors for this particular business case of the project approved the project for further evaluation.
Phase 3: Cross-Project Prioritization
Entry Criteria
This particular phase will begin only if the investigation of the project and its features, which are prioritized, are completed. If these items are approved for further discussion, the phase will be initiated. By having the available list of priorities, the phase can be initiated.
Phase Activities
The phase is based on the role of the steering committee, which is in the position to review the business cases. As compared to each other, determining priorities is the right approach. The development of a roadmap is to be shaped or created well. Difficulties and value to the business will also be examined in this phase (Perry, 2011).
Dependency Matrix
The dependency metric is based on the appropriate model, which helps to identify the inter-dependent model. The dependency structure matrix will be used to determine several insights.
Project Feature Set Prioritization
This phase is based on the open feature, as subsets will enhance the visibility of return on investment.
Initial Evaluation
In the first assessment, the project or the portfolio team will be able to navigate the alignment score, return on investment, and feature dependencies. The product or serve team will be delegated in this regard.
Group Discussion and Formation of a Timeline
The discussion has been delegated to the steering committee. The incorporation for the next releases will be conducted, as it is an integral part of this particular phase. The technical staff and steering committee will be reviewing a different case or scenario to estimate or develop phases which are to be introduced.
Capacity Analysis
In the capacity analysis, there is a need to anticipate or predict the organizational capacity to develop the non-emergency medical transportation system. In this capacity analysis, skills, experiences along with internal and external resources will be navigated to estimate the capacity. If the company feels the capacity is low, time, or resources will be improved or increased. The most important thing is to make the staff available for the project, as it can stimulate the capacity of the organization.
Roadmap Creation
After capacity analysis, the project team or chair of the steering committee makes the final call in the end. An appropriate roadmap is to be set by the senior management regarding the development and implementation or several activities. After creating the road map, it can be provided or handed over to the steering committee (Chatzipanos & Wu, 2018).
Roadmap
The roadmap will help portfolio management to assess new functional requirements. According to these new possible technical requirements, the direction or progress is to be optimized for both internal and external stakeholders.
Timing
The product development or progress and roadmap are to be evaluated each quarter. When developing the non-emergency transportation system, showing the major theme for each release is mandatory.
Exit Criteria
The phase will be completed when the team develops the 2-to-5-year roadmap. It can be said that the completion of the roadmap will justify the completion of this particular phase.
Phase 4: Resource Allocation and Project Initiation
Entry Criteria
The next phase will begin with the completion of the previous phase.
Phase Activities
Project charter
In this phase, the project is to be shifted to the designated agent. The identification of authorities, agents, stakeholders, and completion criteria is the primary function in this particular phase.
Feature Set Determination
In the feature set determination, each activity will be evaluated in terms of significant uncertainties. It is a fact that the business requirements can be expanded, and there is always a need for precise estimation in this context. Based on uncertainties, new features will be added accordingly (Burn, 2013).
Timing
The resource allocation does not require any time, as it can be occulted when the portfolio team needs it.
Exit Criteria
The phase will be completed when the project charter is completed or available for the portfolio team. On the other hand, the phase will be completed when the new proposed feature list is available to include when conducting the project. The release of CCB is also critical. However, it is not integral or essential as compared to other completions.
VII. Conclusion and Recommendations
The project portfolio is associated with some key recommendations in the end. Recommendations for the portfolio management process, particularly in the context of this selected project, are below.
- For instance, portfolio management needs to identify roles, responsibilities, and tasks for individuals in every phase, as it can enable the right direction and well-coordinated work in the end.
- The return on investment must be continuously made, as due to new features in the list, the cost can be increased.
- Every phase of the project or portfolio management must be linked with the organizational or investor’s goals and objectives (Rad & Levin, 2006).
- A proper decision-making criterion is to be developed by the portfolio management to make excellent decisions regarding the technology adaptation and development of a non-emergency transportation system.
- The sizeable fuzzy estimation is always required in this project process, as it can enable the portfolio management to make some changes. Fuzzy estimation seems flexible, as further inclusion becomes easy in this context.
- In each step, the portfolio management must be in a position to identify the level of occurrence in each phase. The determination or occurrence will affect assets in further estimation.
- One of the prominent recommendations for portfolio management is to assess or evaluate the performance of the whole process regularly. The portfolio team needs to shape or create some measures to evaluate or assess the performance of portfolio management. The most important thing is to identify some loopholes or flaws to make a better decision for the future (Levine, 2010).
- On the prominent recommendation for the project, the portfolio team is to enhance the viability of the communication. The communication process is to be enabled or improved to ensure adequate knowledge or information flow. Communication is the relevant source to share information regularly, project activities, or phases. It can be asserted that communication is the primary source for enhancing project portfolio outcomes.
Conclusion
In the end, it is to conclude that several activities or phases trigger the project portfolio. The project phases are to be conducted by aligning some key strategies and traits. With time, there is a need to improve project portfolio management to create a positive impact on overall project outcomes. Finally, some strategic recommendations have been provided to improve results. Still, this extensive analysis regarding the project portfolio is quite open, as are some modifications to be streamlined to be relevant. Integration with the recommendations is the best way to complete the whole project activities or phases remarkably.
References
Burn, A. K. (2013). Project Portfolio Management in Construction Industry. Booktango.
Chatzipanos, D. P., & Wu, T. (2018). Implementing Project Portfolio Management. Project Management Institute.
EPMC Inc. (2011). Project Portfolio Management: A View from the Management Trenches. John Wiley & Sons.
Kodukula, P. (2014). Organizational Project Portfolio Management: A Practitioner’s Guide. J. Ross Publishing.
Levine, H. A. (2010). Project Portfolio Management: A Practical Guide to Selecting Projects, Managing Portfolios, and Maximizing Benefits. John Wiley & Sons,
Perry, M. P. (2011). Business Driven Project Portfolio Management: Conquering the Top 10 Risks That Threaten Success. J. Ross Publishing.
Rad, P. F., & Levin, G. (2006). Project Portfolio Management Tools and Techniques. www.iil.com/publishing.
Rajegopal, S., McGuin, P., & Waller, J. (2007). Project Portfolio Management: Leading the Corporate Vision. Project Portfolio Management.
