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PMO Advisory | October 2018

Implementing Portfolio Management

Prof. Dr. Te Wu (PfMP, PgMP, PMP, PMI-RFP) / October 2018

Introduction

Since the 1950’s, project management as a formal discipline of study has been expanding quickly. Gone are the days in which PMI promotes the triple constraints or the iron triangle. Today, the constraining factors are so much more than schedule, scope, and cost. However, as the Standish Chaos Report has repeatedly shown, the relative success of projects has been hovering around 30% and has not changed significantly since 1995.

This requires a more dramatic re-thinking of project management. Project portfolio management has emerged over the past ten years as one of the ways to address the organizational gap between ideas, planning, and aspirations, and the realized results and value. Studies have shown that organizations that practice effective portfolio management have achieved significant advantages over organizations with minimally effective portfolio management. PMI has been spearheading the development of this field, and in November 2017, PMI released the Standard for Portfolio Management, 4th Edition.

The main advantage of the 4th Edition is that it is shorter than the 3rd Edition by nearly 30%. For those who are concerned with the growing bulk of the PMBOK® Guide, the difficulty of reducing the standard and yet maintaining its broader scope is a remarkable feat.  The primary way in which the Core Committee was able to reduce the size of the standard was making a paradigm shift, from a process-based standard in the 3rd Edition to a principle-based standard in the 4th Edition. The resulting standard is broader and more descriptive, and the space-saving comes from the removal of the “hows” or prescriptions of how organizations should implement portfolio management. This information is nonetheless valuable, and a group of us thought it would be invaluable to create an implementation guide.

As a Core Committee member working with eleven other experts on the committee, I worked with this like-minded group of experts, and eight of us agreed to team up and write an implementation guide.  After working on this for a year, we are proud that PMI just released our new book – “Implementing Project Portfolio Management: A Companion Guide to the Standard for Portfolio Management.” For more information about the book, visit www.implementppm.com.

About the Book “Implementing Project Portfolio Management”

This book attempts to address three challenges with the growth and adoption of portfolio management:

  1. Portfolio management is a new and emerging field. Why? Just look at the number of certified Portfolio Management Professionals. Since its original introduction in December 2013, there are currently fewer than 600 people certified in PfMP. Considering the substantial value that it can add to organizations; this is an unfortunate reality. Why is the adoption so low?
  2. One issue is with senior management. Here, portfolio management shares the same problem with project management.  One of the primary concerns with project management in general and portfolio management, in particular, is the ability to gain senior management attention and obtain their support. This may be often unintentional. The reality is that they often operate at a higher level in organizations, and in many cases, they even speak a different language.
  3. Another issue is with the actual practice and implementation of portfolio management. Just perform a quick search on Amazon.com or BN.com; you will see there is a dearth of good work on this important topic.

As our team of eight experts planning this book, we made a conscious decision to create an inclusive book that includes executives, practitioners, and thinkers as primary audiences.

  1. Part 1 - Business Executives – Part 1 provides a comprehensive description of portfolio management written in plain business language. The chapter includes the what, why, who, and how of portfolio management.  Even though this Part is designed for senior management, we also believe it would be valuable for other groups to review, so they can achieve an executive-level understanding of portfolio management and communicate with senior executives.
  2. Part 2 - Portfolio Leaders and Practitioners – Part 2 provides an in-depth look at the various performance domains discussed in the Standard for Portfolio Management – Fourth Edition, including Portfolio Lifecycle (Chapter 2), Strategic Management (Chapter 3), Portfolio Governance (Chapter 4), Resource Capacity and Capability Management (Chapter 5), Stakeholder Engagement (Chapter 6), Value Management (Chapter 7), and Risk Management (Chapter 8). Also, these chapters go beyond the standard with additional concepts and insights that are in practice today. Each chapter offers new insights into how to apply the principles covered in the standard. As appropriate, they discuss selective tools and templates.
  3. Part 3 - Portfolio Thinkers – Part 3 is designed for curious tinkerers and inquisitive professionals who want to look beyond today and see the future of portfolios and some areas of the latest development. Part 3 covers these topics: Achieving and Sustaining Execution Excellence (Chapter 9), Applying System Thinking (Chapter 10), Navigating Complexity (Chapter 11), Agile Portfolio Management (Chapter 12), and Cross-Cultural Challenges (Chapter 13). The final chapter, Current Trends in Portfolio Management (Chapter 14), is a true work in progress.


To learn more about the book, review the biographies of the contributors, and contact these experts, visit www.implementppm.com. In addition, I will be running two sessions of the same webinar on the International Project Management Day to discuss the book. The date and time are November 1, 2018 at 8-9AM and again at 1-2 PM Eastern Time. Visit www.pmoadvisory.com/ipmday/ to sign-up.  Attendance is free, and space is limited.


 

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