Product and Project Portfolio Management

Introduction

Axiom:1 has provided consulting services for Portfolio Management to a number of clients. We have found that a many of them had the best intentions of creating a Portfolio Management discipline, or approach, in their business but lacked some essential understanding that would have avoided tremendous overspend, false starts or failed attempts.

Our posit is that most, if not all, decisions made in an organization can be greatly enhanced by utilizing Portfolio Management disciplines that produce various insights about their product and service offerings investments.

This is the first in our series on Product and Project (PnP) Portfolio Management. The intent of the series is to provide a simplified look of some essential concepts and their relationships to each other. The audience is for organizations considering Portfolio Management as a tool to support their business objectives and decision making therein.

In this first part of the series we begin with some introductory ideas used as the foundation for future posts.

Terminologies and Concepts

A Portfolio is the appropriate mix of investments (e.g. products, projects, resources, services) held by an organization and grouped together in such a way as to facilitate effective management.

Portfolio Management is the combination of disciplines, techniques and practices used to provide insight into the state of the portfolio, through careful assessments, as it relates to the strategic goals of the organization (e.g. increase revenue, open new markets, increase productivity, etc.).

The main concepts to provide today are:

• Product
• Project
• Resources
• Lifecycle

Product

A Product is anything that can be offered to a market that might satisfy a want or need. In general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or an industrial classification for the goods or services. Some industry examples include Insurance Policies, Payroll, Landscaping, Tax Preparation or Stock Trading.

A product, in its lifetime, will have multiple projects associated to it and will consume resources in various ways that enable, sustain, progress or fix the product. A product has resource allocations both directly to the product or temporarily in supporting projects.

Project

There are many written definitions of a project, however, for those looking for a formal definition of a project the Project Management Body of Knowledge (PMBOK) defines a project as a temporary endeavor undertaken to create a unique product, service or result. The temporary nature of projects indicates a definite beginning and end. The end is reached when the project’s objectives have been achieved or when the project is terminated because its objectives will not or cannot be met, or when the need for the project no longer exists.

Projects require various forms of resource and said resources may be allocated in whole, or in part, throughout the project lifecycle.

Resources

Resources are those things (tangible and intangible) that can be combined to produce products and services. Two main characteristics of resources are utility and quantity (often in terms of availability), therefore the scarcity of resources may cause supply shocks. Common resources of focus in PnP Portfolio Management are people, capital and expense budgets, hardware, software and other consumable artifacts.

Lifecycle

A lifecycle describes the progression of something from conception (ideation) until it no longer has any value (decommissioned). In PnP Portfolio Management typical lifecycle ranges used for measurement intervals are weeks, months and years.

Summary

This concludes our first entry and introduction to the topic of Product and Project Portfolio Management... our next post will focus on the various motivations of PnP Portfolio Management.

Until next time sport fans.....