Why Industry need PPM?

There are a variety of broken operational processes driving the move towards the portfolio approach.

Consider the following:

• »Over 80% of companies do not conduct business cases for technology projects and are unable to adjust budgets midstream more than once or twice annually1
• »By 2005, 70 percent of IS organizations will have adopted a mix of project portfolio management application services for team collaboration, resource allocation, utilization and cost tracking2
• »Through 2006, IS organizations lacking stringent risk assessment procedures will cancel more than 20% of projects in the execution phase3

1 Source: META Group-2002 Worldwide Trends and Benchmark Report

2 Source: Gartner Inc.

3 Source: Gartner, Inc.

An organizational context of portfolio management

a.

• a.Define the organization’s overall strategic goals and objectives at the executive level;
• b.Pass these goals to the portfolio management function;
• c.The portfolio manager selects, prioritizes and approves proposed portfolio components, ensuring that they are aligned to achieve the organization’s goals; and
• d.The portfolio manager reviews the portfolio to ensure it is balanced (short-term versus long-term return, risk to benefit) and negotiates the contributions of relevant strategic stakeholders (e.g., executive management, operations, program management)

Portfolio management can best be described as either: (1) business line portfolios or (2) customer support portfolios. This approach would cover all types of business or government organizations, with all of their products or services within business lines and various types of projects to support those business lines.

Business Line Portfolio Management:

• »A computer hardware manufacturing company producing household products has four major product lines. One of them is laptops. Within the laptop product line one of the sub lines is ultra lightweights. Ultra Lightweights is under the management of a portfolio manager who is responsible for ensuring:

(1) that current products continue to be marketed and produced and

(2) that new products are identified and developed. Under the second category will be projects to accomplish the goal.

Customer Support Portfolio Management:

• »An IT consulting company has a number of clients. The clients are grouped by industry type: financial, auto manufacturing and telecom. Within each of these industry client types are a number clients. Each client is considered a portfolio under a portfolio director who will have a number of client projects.

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