What is the value of Strategic Portfolio Management?

As businesses grow and evolve, they often find themselves managing multiple projects and programs at once. Some are standard business projects - keeping the lights on kind of stuff - while others are important innovation projects.  It can be challenging to keep track of all these initiatives and ensure that they are aligned with the organization's overall goals and objectives. This is where strategic portfolio management comes in.

Strategic portfolio management is a process that involves selecting, prioritizing, and managing a portfolio of initiatives in a way that maximizes the organization's return on investment while balancing risk, resource constraints, and other factors. By managing the portfolio in a structured and systematic way, organizations can ensure that they are investing their resources in the right initiatives and managing those initiatives in a way that maximizes their value and minimizes their risk.

One of the key benefits of strategic portfolio management is that it helps organizations to align their projects and programs with their overall business strategy. By selecting initiatives that are aligned with the organization's goals and objectives, and by prioritizing those initiatives based on their strategic fit and value, organizations can ensure that their resources are being used effectively and that they are moving towards their desired outcomes.

Another benefit of strategic portfolio management is that it helps organizations to optimize their use of resources. By managing the portfolio in a way that balances risk and resource constraints, organizations can ensure that they are allocating resources to the right initiatives at the right time. This helps to prevent over- or under-investment in specific initiatives and ensures that resources are being used in the most effective way possible.

Strategic portfolio management also helps organizations to manage risk more effectively. By spreading risk across multiple initiatives, rather than concentrating it in a single project or program, organizations can reduce their overall risk profile and improve their ability to manage risk effectively. This is particularly important in today's rapidly changing business environment, where risks can arise unexpectedly and can have a significant impact on the organization's success.

In summary, strategic portfolio management is a valuable process for organizations that are managing multiple projects and programs. By aligning initiatives with the organization's overall strategy, optimizing resource use, and managing risk effectively, organizations can ensure that they are investing their resources in the right initiatives and moving towards their desired outcomes.

by Art Lumin

Strategic portfolio management provides several benefits and value to organizations, including:

1. Alignment with business strategy: Strategic portfolio management ensures that the portfolio of projects and programs is aligned with the organization's overall business strategy, goals, and objectives. This helps to ensure that initiatives are delivering value and contributing to the organization's success.

2. Maximized return on investment: By prioritizing and selecting the right projects and programs, strategic portfolio management ensures that resources are allocated to initiatives that deliver the greatest value and return on investment. This helps organizations to optimize their use of resources and maximize their overall return on investment.

3. Risk management: Strategic portfolio management allows organizations to balance risk across the portfolio, ensuring that risk is spread across multiple initiatives rather than concentrated in a single project or program. This reduces the overall risk profile of the organization and improves its ability to manage risk effectively.

4. Resource optimization: By managing the portfolio of initiatives in a structured and systematic way, strategic portfolio management allows organizations to optimize the use of their resources, ensuring that resources are allocated to the right initiatives at the right time.

5. Improved decision-making: By providing a clear and structured framework for decision-making, strategic portfolio management helps organizations to make better-informed decisions about which initiatives to pursue, how to allocate resources, and how to manage risk.

Overall, strategic portfolio management helps organizations to achieve their business goals and objectives by ensuring that they are investing their resources in the right initiatives and managing those initiatives in a way that maximizes their value and minimizes their risk.

by: Art Lumin