Long term success of a company requires much more than just striving for wins on a project-by-project basis. Earlier, Anand Jayapalan had discussed that companies must prioritized building a cohesive project portfolio that comprises of complementary, high value projects that effectively align with their business goals. However, such a portfolio does not come together without considerable effort and planning.
Portfolio planning implies to the process of identifying the projects a company should consider taking on. It is a foundational part of project portfolio management or PPM. The portfolio planning stage acts as a bridge between high level strategic planning that sets the direction of business and project-level planning. A comprehensive and effective portfolio plan would allow companies to capably assess risk across multiple ongoing projects. It would also help make sure that each of these projects contributes to their strategic objectives, without straining the available resources beyond their breaking point.
A version of portfolio planning is also widely used in the financial industry when trying to put together a group of investments. However, planning a project portfolio is its own discipline. It requires very specific distinct practices and a unique perspective. Businesses across industries, right from transformation and construction to oil and gas can benefit from the implementation of a project portfolio planning process. Here are a few ways portfolio planning can help an organization become more successful:
- Have a complementary portfolio: Portfolio planning is a well-defined process that involves a lot of thought and deliberation. It helps companies to select projects that effectively complement each other within a set of portfolios and allows the business to take a step further towards its goals. Unless one purposefully plans out the project portfolio of the company in advance, it is not likely that all projects chosen by the business would make meaningful contributions towards meeting its strategic goals.
- Undertake more valuable projects: Competent portfolio planning assists a company to identify and select projects that are likely to deliver the most value and make the greatest positive impact. It also helps companies to prioritize projects based on their potential value and impact. Projects can be evaluated using criteria such as ROI, strategic fit, resource requirements, risk level, and potential benefits.
- Enjoy improved operational efficiency: A high-quality project portfolio can help one to gain a bird’s-eye view as to where the capital and resources of the company are allocated. This allows for more efficient tracking against baselines and supports easy identification of opportunities for boosting efficiency.
Earlier, Anand Jayapalan had pointed out that by orderly examining projects from the perspective of how well they align with strategic objectives, one can effectively drive an organization’s collective effort to achieve desired outcomes. Portfolio planning also facilitates improved communication and collaboration among project teams, stakeholders, and senior management. By aligning projects with strategic objectives and sharing information transparently across the organization, companies would be in a better position to foster a culture of collaboration and alignment. Such a collaborative approach helps improve coordination, and drive better outcomes for the organization as a whole.