In this video, we define what a portfolio is and how it sits alongside your programmes and projects.
- The APM box seven defines a portfolio as a has a collection of projects, and or programs, used to structure a manage investments as an organizational or functional level to optimize strategic benefits or operational efficiency. In this video, we'll discuss portfolios in some detail, including the benefits of portfolio management and the relationship between portfolios, programs and projects. The basic idea of a portfolio is that it is managed at a functional level and it is comprised of multiple programs and or projects. They might be categorized by type, market sectors, corporate governance, or even customers. Categorizing portfolios makes it easier to select, prioritize and control them in line with corporate strategic direction and capacity. Portfolio management aims to balance change initiatives and business as usual requirements, whilst optimizing return on investment, ROI. As a portfolio manager, you'll need to be aware of any work being done on your programs or projects in your portfolio, to make sure their objectives line up with your portfolio and the overall business strategy. So that's the basics of portfolios, let's talk about the benefits of portfolio management in a little more detail. The APM defines portfolio management as the selection, prioritization and control of an organization's projects and programs in line with strategic objectives and capacity to deliver. Some of the benefits that may result from portfolio management include better prioritization and alignment of projects and programs with organizational goals. Appropriate balancing of quantitative, measurable and qualitative, descriptive benefits. Suitable focus on both short and long term organizational goals. Adapting project and program delivery to external change, I.e. economic fluctuation or the introduction of new legislation or technology. More efficient and effective utilization of scarce resources. Making sure that risk exposure at a project and program level is consistent with the organization's risk appetite. And that's it for this video. As you've seen, portfolios consists of programs and projects and they align to the business overall strategy. They also helped to deliver a number of key benefits to the business, helping to make the programs and projects the companies undertaking more effective and successful.