Portfolio Management and Its Influences on Project Management Essay
Portfolio Management and Its Influences on Project Management
In a project based organization, project management is directly controlled by strategic portfolio managers and a portfolio management department. This type of organization focuses on project development, progress and successful completion in relation to the strategic goals determined by top management. Multiple project proposals are constantly evaluated in terms of value, alignment to corporate strategies, and availability of resources to complete a project. In order for a project to proceed, portfolio managers must decide if a project is worthwhile and if it contributes to the goals of corporate strategies, and make the more difficult decision of which projects are more valuable to the organization in terms of achieving strategic goals (H. Kerzner, 2009). A large part of this process involves balancing short term projects with long term projects, assessing risk factors, and resource allocation. If a project is approved, then a project manager is assigned to oversee the project. The project manager has little influence on the resources and financing assigned to the project; that is determined by the portfolio manager and sponsor. The project manager is given a finite level of resources for a project and is expected to complete the project utilizing the allotted resources in an efficient manner.
The portfolio manager assigns a project and the resources for the project to a project manager, and it is the responsibility of the project manager to complete the project without incurring the need to use added resources or financing. The project manager also is responsible for ongoing status reports of the progress to the portfolio manager and along with details regarding the efficient use of resources. If a project changes in scope or value, the portfolio manager has the authority to update resource availability to the project manager to fulfill the new requirements.
Kerzner, H. (2009). Project Management: A systems approach to planning, scheduling, and controlling (10th edition). John Wiley and Sons, Hoboken NJ.