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Portfolio Management

- The fusion of Project and Asset Management

Most businesses do not see themselves in the project management business. However if they have assets and they work, or have others work to improve those assets then by definition they are Portfolio Managers; managing projects and programmes of work.
An asset manager is involved with managing projects. It is also routinely combining common place replacement or maintenance activities into synergistic programs of work. It has also has to augment its assets with asset building and enhancement work, which it manages through a mix of outsourced or ' in house' major projects.

It has to watch that the labour pool amongst its suppliers is stable and available and where the distribution of the right resource is. At times this can be inconveniently in one supplier or another but there has to be enough ability through tender and other contractual instruments to get its needs met. If one supplier is fully committed another might be hungry for work.

In the next few years there may or may not be enough people to go around. There may or may not be enough lead time, project window availability, or luck with existing asset condition to manage everything in the plan.

If greater clarity and visibility during both planning and execution does not come the organization may or may not know. The need is for superior and wider intelligence. An organization can only do what it must do, if it can see what it needs to see when it needs to see it.

Portfolio Management Diagram

Well managed projects contribute to portfolio management and the execution of the whole portfolio by releasing their results and resources on time.
Large projects and/or programmes tie up many more resources and impact the whole portfolio’s critical path.
The successful coordination of small changes across the entire portfolio can produce the largest gains - they don’t come without intelligence.

The diagram adjacent sets out the higher order function organizations now need to succeed. Fundamentally Portfolio Management is not just about knowing that there are ‘x’ number of projects or programmes of work being undertaken. It is not just about knowing which of these programmes is behind schedule or over budget or is using ‘x’ times the resource allocation to stay on time.

Portfolio Management is about understanding the synergies and opportunities for accelerated or superior outcomes inherent in each programme of work or project when these projects can be synchronized or coordinated optimally with each other. Portfolio Management turns a war on multiple fronts into a campaign. It pulls resource out of ‘un winnable’ situations into ‘winnable’ ones and rolls into each hot spot with the requisite resources to win each battle in the decisive order that adds up to a successful campaign.

Portfolio Management’s prerequisites are visibility to everything, clarity on what is uncertain or at risk and intervention where most needed. It is “Theatre Command” on a larger scale with higher stakes than ever before and the ‘buck does stop here’. It is visibility and clarity right across its own, its allies and even competitor resources to successfully wage a campaign and win the war.