Picture from Reference [3]
“ Our ROUTes to EXCellence (ROUTExc) provide roadmaps to achieve Excellence Belt Performance… In all of them, we provide useful tools that allow users to explode Creativity and Team participation. Our ROUTExc 3 - OPM allows for an alignment between your Business Plans and Optimization Opportunities with a portfolio of projects of achievable solutions providing roadmaps and priorities towards your goals…” [3]
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OPTIMIZATION PORTFOLIO MANAGEMENT (OPM)
In one of our previous publications, the importance of Portfolio Management was shown, especially due to the situation in which companies are currently going through of restricted resources and inflation. On this occasion, continuing along the same lines, we want to focus on the process itself and how this process aligns the projects with the organizational strategy in practice. This is the pillar on which the ROUTExc-3 of our Excellence Belt concept was developed.
When portfolio management is implemented, one of the fundamental objectives is to align execution with strategic objectives and ensure projects are prioritized as required by the business and changes in the environment, in order to ensure that with adequate management and simple processes value is generated in everything that is invested in the projects and initiatives that make up the portfolio.
The generation of value from the project portfolio begins with the processes of selection, evaluation and prioritization of the projects. Once we have the projects selected, the project investment must be justified, involving all stakeholders and ensuring the basis for the alignment of the projects throughout their life cycle.
From the foregoing, it can be deduced that, in order to generate a portfolio of projects aligned with the strategic objectives of the company, a series of steps must be followed, such as the identification, categorization, evaluation, selection, prioritization and balance of the projects, as well as the resources assigned to it.
When the projects are identified, the next thing is to categorize them, where several projects or programs with similar objectives are brought together, facilitating the comparison between them and decision making.
For the evaluation of the components of the portfolio, evaluation criteria are defined for each project, in order to maximize the value they contribute to the portfolio, using criteria based on financial, non-financial benefits, how these projects are framed within the company or the market. , dependency with other projects, need to be carried out, among others.
These criteria are assigned a percentage weight that determines their relative importance. Based on these criteria, a list is made with all the evaluated components, in order to make a selection under a predefined scoring criteria.
Once the evaluation is completed, the portfolio is optimized, where it is observed which projects have the greatest potential to carry out the business objectives.
The latter is an ongoing process that involves reassessing the components and weights for the criteria. Even the revaluation of the criteria which can change. Once this is completed, it is necessary to balance the portfolio by evaluating the risks based on the profile of the organization and the capacity of the resources available to execute the projects.
In this way, a cycle is closed in which, based on an opportunity or need, it was decided to carry out an initiative that required effort and investment and now it is necessary to determine if this generated the expected benefits and results documented in the Business Evaluation.
This is where delivery of value is checked. This phase of the life cycle includes the benefits realization processes to ensure that the value of the Project Portfolio is delivered by comparing the expected benefits with the actual benefits. This requires teams to proactively measure project performance after completion. Many companies do not devote resources to profit realization and therefore miss the opportunity to compare expected profits with actual profits. In addition, the delivery of the value of the Project Portfolio implies improving the maturity of the processes, which translates into a greater realization of the benefits. Lastly, continuous process improvement can improve the delivery of the Project Portfolio.
In conclusion, companies that successfully implement project portfolio management obtain several benefits:
• Maximizing the Value of the Project Portfolio for the organization
• Improvement in decision-making processes
• Successful management of organizational change
• Greater visibility of projects in the organization
• Higher success rate of projects in a complex environment
• Risk Reduction
• Balance in the workload of the Projects
References:
1. Acuityppm.com – 2020 – Tim Washington
2. Pmsolution.net – 2016
3. Excellence Belt Visualization - Milagros Newski - 2020
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