Do you know! What is a portfolio?

A Portfolio is the collection of investments, which includes financial assets such as stocks, bonds and cash equivalent funds including mutual funds owned by individual or institutions and are held directly by investors and managed by a financial professional.

The very next Question!

What is Portfolio Management and Project Portfolio Management?

Portfolio Management is an art and science of making decisions about the investment policy that matches individuals and organisations investment objectives after considering the risk associated with it and return on investment (ROI).

Project Portfolio Management (PPM) is known as the centralised management of one or more project portfolios, its processes, methods and technologies used by project managers or Project Management Office (PMOs) to achieve strategic objectives. It also enables organisations to leverage its project selection and execution success.

In this article, we will see how Portfolio Management plays a vital role in project success!

Portfolio management is all about determining weaknesses, strengths, threats and opportunities while selecting a project or program. Strategy implementation advances corporation’s organisational goals. Hence, its necessary for all organisations and portfolio management is the key which drives organisations to get there. An adequate portfolio provides executives with a birds-eye-view of projects and makes it easy to spot redundancies, spread resources appropriately and keep track of the progress.

It is essential to effectively manage the portfolio as it ensures the projects and programs companies invests in, provides numerous financial benefits, enables organisations to achieve their strategic objective, manage resources efficiently which results in cost reduction, growth in revenue, increased ROI and minimises the risk on investment.

Let’s explore some of its importance,

1. Insightful Decision Making

   Portfolio Management helps an organisation to make a better investment decision that is right and fruitful, provides long-term benefits to the company. A project portfolio provides good insights regarding all aspect of projects, capture project information systematically and accurately across all departments, help an organisation to manage potential risk and cut off projects that are lagging behind.

2. Maximise the efficiency of resources

   Organisations investing in portfolio management have a higher chance of success, as it allows a reduction in project costs through eliminating all kinds of duplicate efforts, enable organisations to have control over project resources. Portfolio Management solution increases human resource performance rates, as the human resource includes the highest amount of cost while implementing projects and provides substantial benefit to the organisation as it helps to meet agreed strategic goals and drive commercial growth.

3. Minimise Risk

   Portfolio management help organisations to choose the best among the various investment options available to achieve financial objectives. It identifies the project risk of several categories including financial, governance, resource utilisation and misdirected efforts. The tools and practices used in portfolio management help organisation see projects through different risk management perspective which communicate key-risk information, evaluates the project cost and risk involved in cancelling the project, helps to keep project deliverables aligned with project objectives, also useful to focus on minimising the risk and balancing the reward.

4. Maximise Return On Investments (ROI)

   Portfolio management provides organisational executives and decision makers with numerous investment options to choose from and the kind of return on investment they can expect to achieve their project portfolio management system’s objective. The term portfolio management implies that the organisations manage the project cost in the most efficient way which minimises the risk involved, makes the projects more likely to hit the project ROI and help organisations achieve greater financial benefits in the form of return on investments made.

5. Achieve strategic business objectives

   Portfolio management involves extensive research to design and develop the most suitable investment strategies based on the type and size of the project, ensure completion of projects on time and earlier within the assigned budget, provide direction to the project team enabling them to move towards achieving the organisation’s strategic objectives.

So these were some of the importance of portfolio management in making the projects successful.

What makes you a master to apply it efficiently and ensure project success?

A training!

Well, you can go for Portfolio Management Professional (PfMP®) Certification Training and the Management of Portfolios (MoP®) foundation and practitioner level training based on your educational and work experience.

So what are we waiting for! It’s time to go.

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