Do you know what are the best project analysis and selection practices in portfolio management? This theme is very relevant for all companies, including public organizations, but it is generally more adopted by large and medium-sized private companies.
This type of business usually handles more than one portfolio at a time and, therefore, it is necessary to manage them to optimize investments and to achieve the best results.
Do you want to learn more about this subject? In this post we will explain what is portfolio analysis and selection, and we will give you tips to help you improve this process!
What is Portfolio Management?
Portfolio management is the association of strategies, knowledge and techniques for managing different projects that are part of a given portfolio. The main objectives of this practice are to increase the Return on Investment (ROI) and achieve the goals defined by the organization.
What are Portfolio Management Best Practices?
Knowing the best practices of portfolio management is crucial, as this will help your company to optimize productivity and make better choices. Among the best actions to be taken is alignment with business objectives, prioritization and selection of projects, simulation of scenarios, and executive approval.
Ensure alignment with business objectives
The first thing to consider when managing the portfolio concerns the definition of the company’s objectives. This may seem a little basic, but it is very important and often overlooked resulting in misalignment from the start.
Companies that effectively define objectives are able to have a better direction in their actions and, consequently, tend to have more assertiveness in the selection of projects. In this context, it is important that the objective is specific, measurable (it must measured), realistic and there needs to be a clearly defined deadline. An example of this would be a company that wants to double their number of sales in 3 years.
Creation of organizational areas
The creation of areas or departments facilitates the organization of the company. This allows you to distribute the strategic objectives of the business among the different departments. Each sector is a master of their expertise and will be responsible for reaching a specific goal. Thus, we can say that this strategy contributes to a better organization of the projects and helps to define which area of the organization will be in charge of each goal. This practice helps companies to focus on strategic tasks and also to optimize productivity.
Projects selection and prioritization
Demand for many projects at the same time is common, especially in large companies. This is due to a large number of departments and also the sign of an organization innovating in order to stay relevant. This is a positive problem as it favors the development of innovative ideas, however, it is very important to know how to prioritize and select the projects that most contribute to the company’s business objectives.
Projects must be aligned according to the corporate strategy criteria, no matter the requesting area or context. In other words, they must be relevant to the company’s strategy. This way, your business will have efficient portfolio management and, consequently, sustainable growth.
Simulation of scenarios
This is one of the most important practices in portfolio selection because the comparison between different scenarios helps in the business’ planning, and also allows for better decision-making. This way, it will be possible to make better decisions and also gain space in the market. Using a software that allows for what if analysis and simulations is a great way to compare different scenarios apples-to-apples,
After going through all the steps described, it is time to approve the best projects. This is a very relevant practice in portfolio analysis and selection, and, therefore, it should be a part of your project management tool.
The project portfolio should favor the growth of your organization in the market and, in a more structured way than the endless Excel spreadsheets and the confusing e-mail exchanges. The analysis and selection of projects in portfolio management are essential practices, as they help companies to choose the best projects according to the strategies and objectives of the business.
As a result, companies tend to make better use of available resources, present sustainable growth and stand out in the market. Considering all the positive aspects mentioned, it is worth knowing a little more about an appropriate tool for project analysis and selection. Discover Teams Ideas (https://teamsideas.com)