For folks looking for a portfolio management approach that successfully navigates them through the two distinct aspects of the portfolio management life cycle while focusing on delivering measurable benefits to the business, let me recommend Management of Portfolios (MoP®). MoP® is a structured, non-proprietary portfolio management method, much like it’s “younger siblings” MSP® (programs) and PRINCE2® (projects). Portfolio management contributes to your organization’s strategic objectives by translating those objectives into a set of programs and projects that facilitate change.
In a nutshell, this method provides a road map for effective portfolio management in any organization. Being able to see your current initiatives along with their costs and benefits enables effective decision-making across the business and a way to successfully gain measurable benefits from business change. MoP® consists of its organizational context, principles, cycles and practices operating within the strategic and organizational context of your organization. Let’s take a look at each area in more detail.
MoP® must coordinate with the key functions and activities within your organization to be effective. The six aspects of the organizational context for portfolio management activities include:
MoP® is based upon a set of five common-sense principles guiding the portfolio manager and the business as they define and implement initiatives to effect business change and realize business benefits and value from those changes. These principles provide the organizational environment where portfolio management practices can operate effectively. These principles are:
MoP® has twelve practices that describe the critical planning, execution and monitoring aspects of portfolio management. Remember that portfolio management within an organization does not have a mandated start, middle or end like a program or a project does. These practices are divided into two cycles: the portfolio definition cycle and the portfolio delivery cycle.
The portfolio definition cycle builds the key information to be provided to senior management. This cycle consists of a series of broadly sequential practices that defines what initiatives and changes the portfolio is going to deliver and plans for how those things can actually be done. This cycle produces the Portfolio Strategy and a Portfolio Delivery Plan, which form the baseline of what is to be delivered by the portfolio. The five practices of the portfolio definition cycle are:
The portfolio delivery cycle consists of seven simultaneous practices that need to be managed and focused on as the portfolio initiatives and changes get underway. The purpose of these practices is to ensure the successful implementation of the planned portfolio initiatives and to be sure the portfolio adapts to changes over time. The seven practices making up the portfolio delivery cycle are:
A copy of this portfolio management method is required reference material in any portfolio manager’s bookshelf! The method is documented in the publication “Management of Portfolios” which is officially published by The Stationary Office, or TSO.
Stay tuned as we take a more detailed look at the “nuts and bolts” of MoP in subsequent posts!
*MoP®, MSP® and PRINCE2® are registered trade marks of the Cabinet Office.