How organizations can reach their strategic goals and implement their visions by managing company’s resources effectively?
Some companies use strategic portfolio management to make critical choices about which activities to implement to deliver their visions.
What is a Strategic Portfolio Management?
Strategic Portfolio Management is a process which helps determine where best to focus the limited organisation’s resources in order to meet strategic objectives.
Basically, this requires making difficult choices of what not to do, by focusing resources on less and better activities. Essentially, the activities that are mostly aligned with strategic success.
In this way, once the portfolio has been defined, attention goes to execution. In fact, to ensures that operations and strategy remain aligned, it is important to constantly monitor performance with metrics in accordance with the strategic goals.
Who is responsible for Strategic Portfolio Management?
Strategic portfolio management requires that people within the organization decide if the projects and programs for execution align with the organization’s strategies.
In fact, whereas Program and Project Management is about “doing things right”, Portfolio Management is about “doing the right things”. To be successful an organisation clearly need both.
Unfortunately, sometimes happens that Portfolio Management remains at a level in the organisation where it does not properly connect with the strategic direction of the business.
For this reason, it is the responsibility of the senior management team to align and integrate strategy and operations.
Keep in mind
In general, portfolio management is similar to program management, with projects that are unrelated to each other. In fact, organizations must be sure they work on the right projects by optimally allocating resources.
Whereas strategic portfolio management is about deciding if the projects and programs selected align with the organization’s strategies. In other words, it determines if the organization is executing the right projects given its strategy.