Delivering on strategy project management institute. Portfolio management definitions portfolio an appropriate mix of or collection of investments held by an institution or a private individual. Feb 12, 2020 strategic management is the management of an organizations resources to achieve its goals and objectives. The firms were selected for their complementary investing styles. The distinction between strategic thinking, strategic management and strategic planning 45 strategy in actionquick strategic thinking in unfavourable circumstances45 strategy in actionsony the disruptive innovator 50 principles for the successful use of strategy 61 finding the right strategic mix of entrepreneurial creativity and. Strategic usiness planningthe portfolio, explaining the rationale for decisions, and strategic planning sets the context within which portfolio management operates while portfolio management provides crucial information for strategic decision making. Pdf strategic operations management radhitya wirawan. Jan 27, 2012 this is an excerpt of a paper i wrote while working on my mba. Typically, organizations execute manage the work through projects to deliver products, services or to manage operations. Their input, advice, and lessons learned, both successes and failures, have been incorporated into this document so that we may all apply better strategic management processes in our organizations. For example, to achieve their strategic objective of new product development to compete effectively in. Other criteria should reflect a companys capabilities. As the prioritization of the portfolio is supposed to show impact, resources are required to be allocated accordingly. Portfolio management the art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals.
Portfolio management strategies refer to the approaches that are applied for the efficient portfolio management in order to generate the highest possible returns at lowest possible risks. Effective portfolio management helps achieve outperformance, making your strategy real through organizational change. Our approach establishes two tiers of decision optimization by extending our strategy science methodology upward to the executive committee and its portfolio management responsibilities. Strategic management is the management of an organizations resources to achieve its goals and objectives. Managing innovation portfolios strategic portfolio. Early adopters of strategic portfolio management character ized the difference as doing the right projects vs.
Practical and filled with expert advice, strategic project portfolio management. Portfolio management should be complementary to the overall management of the organisation. Strategic portfolio management enables senior management to create, define and manage the portfolio of strategic options that best delivers the organisations vision, balancing short and long term objectives, risks and costs. Portfolio management minimizes the risks involved in investing and also increases the chance of making. Investment analysis and portfolio management 5 the course assumes little prior applied knowledge in the area of finance. Strategic project portfolio management wiley online books. Ongoing investment manager evaluation by chase investment services. During the past 20 years companies have greatly improved processes and systems for managing the operational aspects of projectportfolio management ppm budgeting, project management, resource planning, and phase gate processes. The portfolio s and programs were reorganized to form the portfolio and program hierarchy and efficient portfolio structures, utilizing peoplesoft tree functionality. Strategic portfolio management spm helps decision makers align an organizations portfolios to best execute on the corporate strategy.
A strategic approach supplies indepth treatment of the five domains and identifies best practices to ensure the organization has a balanced portfolio management that is critical to success. In this model, we regard it portfolio management as a strategic decisionmaking process, whereby limited resources are allocated to various it investments, ensuring that a balanced portfolio of investments is made to satisfy the multiple objectives of the firm. In a laymans language, the art of managing an individuals investment is called as portfolio management. Strategic risk management edinburgh business school. Successful organisations make strategic choices about which activities should be implemented to deliver their vision. Portfolio management pharmaceutical portfolio management kazuo j. Portfolio management is an approach or set of standard best practices for planning, managing and executing work through the project to deliver the end products or services. During the past 20 years companies have greatly improved processes and systems for managing the operational aspects of projectportfolio management ppm budgeting, project management, resource planning, and phase gate processes strategic portfolio management, while practiced for many years by leading companies in.
Effective portfolio management aligns a companys investments, people, and programs with its overall strategic objectives. Typically, a portfolio management board pmb is in charge for this strategic decision making. On a strategic level, portfolio and resource management must be fully aligned. Strategy governance management and capabilities data and tools alignment of the portfolio to the corporate strategy is not understood too many, often overlapping, projects aligned to one strategic. The goal of this paper is to contribute to the understanding of how it portfolio management affects strategic it investment decision making. The spo is an organizational entity responsible for mapping strategy to projects and monitoring projects and portfolios to ensure they continue to address strategic. Four possible strategic focusses for linking portfolio management, programme and project management to business strategy are cost advantage, customer focus. Business portfolio analysis matrix strategic management. Portfolio management can also give senior leaders the nimbleness to stop projects that are no longer delivering value. The program blended academic theory with realworld techniques to enhance leaders ability to analyze information and alternatives to make the best critical. Continuous monitoring of the chase strategic portfolio by j. Portfolio management refers to managing an individuals investments in the form of bonds, shares, cash, mutual funds etc so that he earns the maximum profits within the stipulated time frame. Some of those criteria should reflect a companys strategic intent.
Abstract project portfolio management ppm is evolving swiftly and becoming the main tool of managing complex project environment. Strategic portfolio management is the next big opportunity to achieve and sustain competitive advantage. An explicit line of sight between all the projects in the portfolio and the strategic intent of the hosting organization 2. Special thanks is extended to those who participated in the case studies by sharing the details of their strategies. Active engagement of the executives who will be directly and visibly responsible for the composition of the portfolio 3. It encourages companies to make all of their decisions using a capabilities lens. The pmi portfolio standard charter states strategic portfolio management is the responsibility of the executive leadership team of the organization, where those involved are deciding if the projects and programs selected for execution align with the organizations strategies. The strategic role of project portfolio management pucsp. Strategic rebalancing the journal of portfolio management. Course objectives investment analysis and portfolio management course objective is to help. Calendar rebalancing induces negative convexity in portfolios and heightens drawdowns. To be successful, strategic portfolio management must be built on top of a robust enterprise project management system that the organization is trained to use and actually finds indispensable for daytoday management. To read the entire article, download the pdf titled strategic project management.
Jan 02, 2012 lead change through strategic alignment of project and process performance. Icai the institute of chartered accountants of india. Projects, programs, subportfolios, and operations managed as a group to achieve strategic objectives. Providing executivelevel guidance to build a powerful and. Strategic portfolio management iserver orbus software. Ezawa bristolmyers squibb company daag san francisco february 25, 2004. The course is intended for 32 academic hours 2 credit points. Providing executivelevel guidance to build a powerful and efficient process from initial adoption to portfolio.
Strategic portfolio management provides a robust link between strategy and operations. The risks themselves may be strategic or nonstrategic but they all contribute towards the overall strategic risk profile of an organisation and, therefore, fall within the remit of the strategic risk management system. The centralized management of one or more portfolios to achieve strategic objectives. Lance van nostrand, pm world journal portfolio management. Managing innovation portfolios strategic portfolio management. Strategic portfolio management information strategic portfolio management is about deciding where best to focus the organisations finite resources in order to meet strategic objectives, considering the business as a portfolio of activities and making tradeoffs across the portfolio. Optimizing tradeoffs for strategic portfolio management. If a business unit helps a company meet its strategic goals, such as becoming an emergingmarket player or developing a certain set of unique skills, then managers should rate it higher against their strategic criteria. Since 2006, the stanford strategic decision and risk management certificate program has been a highquality, decisionmaking professional education program for leaders around the world. Management of portfolios mop the 5 mop principles the. Project strategy and strategic portfolio management. The portfolios and programs were reorganized to form the portfolio and program hierarchy and efficient portfolio structures, utilizing peoplesoft tree functionality.
This is an excerpt of a paper i wrote while working on my mba. Enabling a productive organization presents a clear framework for your organization to complete impactful strategic projects. There are two basic approaches for portfolio management including active portfolio management strategy and passive portfolio management strategy. To manage a portfolio of projects successfully, a project manager must obtain and exploit the support of senior management. Her specialty areas are portfolio management, program management, the project management office, metrics, and maturity assessments. Key findings many investors do not realize that calendar rebalancing of a portfolio is an active strategy that essentially buys losers and sells winners. Vitally this includes making those difficult choices of. Portfolio management presents the best investment plan to the individuals as per their income, budget, age and ability to undertake risks. Ginger levin is a senior consultant and educator in project management. How to transform projects through portfolio management 5 to overcome these challenges, portfolio management needs to be embraced by organizations to achieve three main objectives. Organizations with mature project portfolio management practices. Morgan asset management to help ensure the asset allocation of each portfolio remains in line with the portfolio s objective. Strategic management involves setting objectives, analyzing the.
Presenting information that is current with the standard for portfolio management, third edition 20. For example, to achieve their strategic objective of new product development to compete effectively in the market could be a portfolio program. Portfolio management strategies portfolio management. A successful portfolio management strategy must comprise an endtoend framework that methodically guides organizations from project selection through. Project portfolio management helps to properly allocate and optimize available resources between projects, programs and other tasks strategic alignment of it projects the right portfolio management tool helps your organization to align all planned and ongoing projects with the overall strategic initiatives measurement based portfolio optimization. An ability to clearly communicate how the portfolio is.
Strategicusiness planningthe portfolio, explaining the rationale for decisions, and strategic planning sets the context within which portfolio management operates while portfolio management provides crucial information for strategic decision making. Article pdf 253kb tying portfolio decisions to a companys distinctive capabilities can help identify which businesses to divest. The risks themselves may be strategic or non strategic but they all contribute towards the overall strategic risk profile of an organisation and, therefore, fall within the remit of the strategic risk management system. Stanford strategic decision and risk management stanford online. Six principles of strategic portfolio management smartorg. The it portfolio management stepbystep methodology presented in detail in chapter 5 is a proven process for applying it portfolio management and has eight stages. Enabling a productive organization presents a clear framework for your organization to complete significant strategic projects. Lead change through strategic alignment of project and process performance. The forward looking statements involve certain risks and. The portfolios provided by the investment firms are used to construct and manage the smas within individual portfolio advisory services taxsensitive client accounts. It is a continual process that integrates business strategy with. Portfolio management refers to managing money of an individual under the expert guidance of portfolio managers. Strengthen the strategic alignment of programs and projects to prevent initiatives being undertaken that do not support the enterprise strategy 2.
This paper examines and compares two case studies in practicing strategic portfolio management spm, one effort that. Charged with managing such projects effectively, executives are asking, how do we. As outlined above, strategic portfolio management translates innovation strategy into an aligned project portfolio. Morgan asset management to help ensure the asset allocation of each portfolio remains in line with the portfolios objective. Portfolio management meaning and important concepts.
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