Portfolio management transformation

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Do you have a risk-based approach to portfolio management?

Today’s economy is increasingly competitive. Market volatility, ceaseless pressure on margins and demanding stakeholders increase the difficulties of thriving in an increasingly interconnected, interdependent and unpredictable global economy.

Many organizations have yet to adapt to this new state of the economic landscape. Doing nothing is no longer an option — they need to adjust and take action now.

As a consequence, many organizations are now transforming their businesses to strengthen their organization to save costs, create more client-centricity, restore stakeholder confidence and/or embed new business models.

Organizations need to execute numerous increasingly complex transformation programs and projects in parallel, while at the same time keeping the business functioning. In many multinational organizations, hundreds of such programs and projects are running across different functions and geographies.

This complexity causes organizations to struggle with both “doing the right things” and “doing things right.” Many organizations continue to receive a poor return from their investment in projects, and programs are failing to unlock the full value of their capital investments.

Doing the right things
Organizations continue to struggle with selecting the right programs and projects in which to invest. Selecting inappropriate projects or programs that do not support the corporate strategy will fail to add the expected value to the organization and may limit sufficient capital to do the right things.

This is within the scope of portfolio management, as it is concerned with the translation of the strategy into tangible programs and projects. Effective portfolio management provides the organization with a mechanism to make sure it is doing the right things.

Doing things right
Most organizations encounter issues in program and project delivery. Although they may have selected the right project or program, ineffective execution causes an inability to realize timely expected benefits and will most likely incur additional costs and schedule delays.

As a result, programs and projects are underperforming and require additional resources just when organizations want to spend their hard-earned capital elsewhere. This concern is within the scope of a program risk management function, as it is focused on effective delivery of initiatives to improve execution performance and achieve expected outcomes.

For more details, please see our full report,Portfolio management transformation.