Portfolio management
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Portfolio management



Nigel Bell gave an overview of portfolio management and the work of the APM Portfolio Management SIG at a recent APM East of England branch event.

Nigel Bell gave an overview of portfolio management and the work of the APM Portfolio Management SIG at a recent APM East of England branch event.



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Portfolio management Portfolio management Presentation Transcript

  • Portfolio Management Nigel Bell East of England Branch 21st February 2012Marshall Aerospace, Cambridge
  • Portfolio ManagementProposed Agenda Scene-setting and credentials Some portfolio management definitions Some portfolio management principles Some portfolio management challenges Where we are today (recent survey) Seven simple steps which guarantee portfolio management success in three weeks* Remaining dialogue * not really 2
  • Portfolio ManagementScene-setting Portfolio management (PfM) has been around for many years in various forms and for various purposes Since the turn of the century its profile has risen exponentially ... ... perhaps because we live in increasingly turbulent times The APM established its Portfolio Management (PfM) SIG mid-2010. 3
  • Nigel Bell Credentials Founding committee member, sower of seeds since 2000 BSc computing > MBCS > CEng > MSc Managing Change > FBCS > MAPM Systems devt projects  IT-enabled change projects  change projects Do > lead > coach PWC consultancy > European IS Dir Low & Bonar > Global IS Dir Drug Devt Astra(Zeneca) > CEO NHSIA > Cabinet Office > independent/Gateway RTL (+Logica interlude) > Managing Partner HP (Jan 2012)* PfM: R&D > IS > NHS IS > Business Development 4
  • Portfolio managementSome definitions P3O ® publication states ‘A portfolio is the investment in the changes required to meet strategic objectives’ OGC Management of Portfolios® (MoP) states ‘Portfolios represent the totality of an organisation’s investment (or segment thereof) in the changes required to achieve its strategic objectives’ APM defines Portfolio Management as: ‘The selection and management of all of an organisation’s projects, programmes and related business-as-usual activities taking into account resource constraints’. 5
  • Portfolio management ... and some more OGC adopts a more process perspective: ‘PPM is a co- ordinated collection of strategic processes and decisions that together enable a more effective balance of organisational change and business as usual. National Audit Office emphasises the key aspects of prioritisation and strategic alignment: ‘Prioritisation of all an organisation’s projects and programmes in line with business objectives and matched to its capacity to deliver them’. Cranfield MS and Open University define it as ‘Managing a diverse range of projects and programmes to achieve the maximum organisational value within resource and funding constraints.’ 6
  • The Portfolio Management cycles Benefits Mgmt Categorise Understand Management Financial Mgmt Control Prioritise Define Organisational Energy Risk Mgmt Plan Resource Mgmt Stakeholder Balance Engagement Source: OGC Management of Portfolios, pub TSO 2011
  • Success – a Portfolio Management perspective Ensures management of risk Ensures visibility of all at the collective level projects & programmes and Ensures early increasing success identification of their interdependence and of the ‘right’ projects enables tracking and focus Projects & Programmes that & programmes and to ensure success. don’t add a link to business Provides better value/benefit so they risk management engagement with staff are not started or Supports timely decision are stopped making and re- ‘All Projects orientation of in-flight projects & programmes so that strategicIdentification of Projects & Programme that are Succeed’ benefits are optimised strategically aligned. APM Vision 2011 Those not strategically aligned are not started Supports effective andor cancelled as early as optimised allocation of possible Provides robust governance of change resources to better enable the across the whole highest priority ‘right’ projects landscape of change / and programmes to succeed projects Portfolio Management ensures the ‘right’ projects & programmes are selected and managed for success….’ Portfolio Management SIG 2011
  • Portfolio managementMy 4 contexts and experiences Common factors in prioritisation – Strategic fit – Costs to go – ROI/benefits – Achievability/confidence Differences – Pharma R&D: complexity, “failure” rate, maturity – Pharma IS: dependencies, scale diversity – NHS IS: politics and Politics! – Bus Devt: two tier – client and opportunity Common outcomes – Critical, tier 2, tier 3, parked 9
  • Portfolio managementSome principles Proactive and visible Senior Management Commitment Consistent and effective Governance Alignment Alignment of the Portfolio with Strategic Objectives Coordination through a Portfolio Office Shared change culture and associated behaviours 10 *ource: OGC Management of Portfolios, pub TSO 2011
  • Portfolio managementSome challenges (1) Getting Portfolio Management started Developing an initial portfolio Prioritising and balancing the portfolio Delivering overall portfolio benefits Dealing with tensions between Portfolio and BAU/Operational objectives Securing and sustaining business unit management commitment 11
  • Portfolio managementSome challenges (2) Securing and developing people with the right portfolio skills/capabilities Putting in place the right tools & techniques to support Portfolio Management Achieving the goals set for a Portfolio Management function Applying lessons learnt from regular reviews of Portfolio Management performance 12
  • Portfolio Management SIG – 2011/12Membership Survey (Preliminary Results) The PfM survey was launched in December 2011, at which time there were 575 SIG members. Initial 50 responses have undergone initial analysis. Those that took part have provided a very good series of responses, across all 15 questions. Summary results follow. We are keen to encourage ongoing contributions to this rolling survey – your APM needs you! 13
  • 1. Which best describes your role? 14
  • 2. To which sector does yourorganisation belong? 15
  • 3. How would you describe theapproach to portfolio management inyour organisation? 16
  • 4. In which part of the organisation isthe main Portfolio Management (PfM)function domiciled? 17
  • 5. In what units do you structure yourportfolio of change / investmentinitiatives? (multiple selections apply) 18
  • 6. How many projects comprise yourchange / investment portfolio? 19
  • 7. How large (£) are your projects?(multiple selections apply) 20
  • 8. How many programmes compriseyour change / investment portfolio? 21
  • 9. How large (£) are your programmes?(multiple selections apply) 22
  • 10. Do you also include services/BAUwithin your change/investmentportfolio? 23
  • 11. Please rate the importance yourorganisation attaches to each of thefollowing PfM principles 24
  • 12. Please rate how successfully youbelieve these principles are beingapplied in your organisation 25
  • 13. Please rate how successfully thefollowing common PfM challenges havebeen or are being addressed 26
  • 14. Which (up to 3) topics in Q13 aremost worthy of further discussion/debate through the APM? 27
  • 15. Up to 3 topics in Q13 for which youare prepared to draw up a short outlineof what has worked well or not so well inyour organisation? 28
  • End of core presentation 29
  • Portfolio Management SIGForthcoming EventsPractical Experiences of Portfolio ManagementLondon, 20th March, 5.30pmVisit www.apm.org.uk/events for more details 30
  • Portfolio Management SIGYour next steps Please do complete the survey at www.surveymonkey.com/s/LB93F9C If you are interested in joining the SIG www.apm.org.uk/group/portfolio-management-sig Join in the debate – Blog etc To follow up on any other aspect of this evening’s presentation – email nigel.bell@hp.com 31
  • Thank you for your attention and engagement Travel safely Nigel Bell 32