Complete Guide to Portfolio Management in 2023
Managing your portfolio is essential for any business, big or small, in 2023. There are several ways to start, including project and lean portfolio management. But what is the difference, and how can poor portfolio management negatively impact your enterprise and overall business growth?
Project vs. Lean
There are several critical differences between project portfolio management and lean portfolio management—each work better for different industries and strategies.
Project Portfolio Management
Project portfolio management focuses on creating a set of tightly structured projects and building plans with short-lived teams used to execute those plans. The project portfolio management scope encompasses the business’s entirety, focusing on projected growth and changes with team composition, project prioritization, and system methodology.
Lean Portfolio Management
Lean portfolio management focuses on streamlining the process by combining loosely structured value opportunities with a long-standing team-of-teams organizational model and asking teams to define the needed work. Lean portfolio management is, as the name suggests, lean, requiring team members to buy into the methodology and focus on present tasks rather than future growth or change.
Problems with Poor Portfolio Management
Poor portfolio management isn’t the end of a business, but it can harm the enterprise in a way that leads to its eventual demise. There are several reasons for this, which vary depending on the industry and field, but the significant areas of concern with poor portfolio management can be noticeable.
Ineffective Goal Alignment
The difference between an objective and a goal is that an objective is a task, whereas a goal is where it leads. For example, an objective such as creating a new product is the task that leads to the goal of selling it.
As an enterprise, you have specific goals you want to achieve. These goals can be as rudimentary as growing the enterprise or increasing revenue, to more complex and long-term such as expanding into new markets or providing multi-faceted services.
With ineffective portfolio management, those goals do not align with the objectives. You may have wanted to implement these sweeping changes to ensure efficiency. Still, a lack of transparent and readily accessible information in a dashboard you could easily navigate has led to objectives taking on their own goals, detracting from the intended purposes of the project.
Misallocation of Resources
With ineffective goal alignment, poor portfolio management leads to the misallocation of resources. When you misallocate resources, you give unnecessary tools and skills to areas that do not need them. These misallocations can often lead to a delay or a lack of team cohesion leading to project prioritization failure.
Inadequate Risk Management
Finally, poor portfolio management can lead to risk identification failure. When you don’t account for the risks, they can often lead to a considerable loss for the enterprise. An example of risk management would be ensuring that should a project fail, a safety net for the enterprise to fall back on and mitigate losses as much as possible is in place.
Since poor portfolio management leads to inaccurate and opaque data, risk management rises as you do not have all the facts.
The Solution: Project Portfolio Management Software
PPM, or project portfolio management, is a methodology of using software to manage an enterprise’s portfolio and ensure consistent, transparent data leads to effective and growth-inducing change across the company or individual teams. PPM software helps portfolio management by remedying the faults listed above.
Align Objectives with Goals
With project portfolio management, an enterprise can have the necessary tools to identify when objectives and goals misalign. With this information, companies can effectively direct and reallocate resources where they need to go or implement change that leads to the current objectives meeting the intended goals.
Adopt Project Resource Allocation
Project portfolio management, as mentioned, helps keep data transparent for a business. As a result, it ensures that the correct projects receive the necessary resources to execute their objectives successfully.
For example, project portfolio management software states that project A lacks C, allocated extensively to project B. This knowledge allows managers to transfer resources to ensure project A meets its intended objectives.
Manage Risk Through Communication
One critical takeaway from this information is that portfolio management software communicates transparent data that you can access at any time. This relays information that can lead to effective risk management, as all possible variables–including market trends and competitive strategies–are accounted for and considered before project execution begins.
Accurately and Efficiently Supplies Transparent Data
Finally, as stated several times prior, project portfolio management accurately delivers transparent data for managers and business leaders to make effective decisions.
Inaccurate or opaque data, obscured by poor portfolio management, leads to many of the above mentioned issues. Without accurate data, resources are misallocated, projects cease development, risks are not accounted for, and strategic goals are out of reach due to misunderstood objectives.
Work Otter, Not Harder
For years, we have strived to create the most effective and groundbreaking PPM software available to businesses, big and small. To our great delight, the software we provide at Work Otter has ranked #1 in several industries as the premier portfolio management software for businesses.
What Makes Our Software Superior?
Work Otter has strived to create the best PPM software available by combining several things every business owner needs: accuracy, ease of use, and compatibility. Our PPM software has an easy-to-use interface and dashboard that regulates necessary information travel across teams and platforms to ensure effective business optimization and growth.
Do You Need Portfolio Management as a Small or Medium Business?
Absolutely. Portfolio management is more than just a tool for large, global enterprises. Small and medium local businesses can benefit from the transparent optimization of data and information, which can stimulate enterprise growth and success.
If you would like to know more, check out our reviews and take a free tour of the software to see just how easy it is to maximize the potential of your enterprise.