Project Management

Planning the Portfolio: Part II: THE PITFALLS

The portfolio management process is used by most companies, whether they know it or not. All companies determine projects, decide which ones to do first, and collect the information they need (resource availability, technological requirements, etc) before starting the work. As Dave Blumhorst explains, this type of non-structured portfolio management has been effective for years, but now is becoming troublesome and obsolete. Blumhorst points out that many organizations recognize this, and are attempting to create a structured portfolio management process, which can be a painful experience. There are 7 pitfalls this article focuses on that can hamstring a project portfolio management implementation and operation. One of them (and probably the most typical), is the pitfall of workload: [There is] a tendency to focus on capacity first. Although I argue that capacity is one of the constraints in portfolio management, initiating planning exclusively to focus on managing capacity is froth with errors. Organizations focused exclusively on workload have a tendency manage resources at a micro level and that just isn’t sustainable. I once had a client that when he moved his focus from matching capacity to demand and focused on the right things, the dialog changed and he became more connected to the business. Dialog between the organizations ensued that actually increased the quality of business outcomes. Other pitfalls include a lack of formal governance, using old criteria (instead of validating criteria before anything else in the portfolio), and spending money on projects that aren’t “good”, reducing the funding possible for higher priority, bigger impact work.

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