What this Chapter Is (and Isn t) About

What this Chapter Is (and Isn't) About

In very simple terms, portfolio management is concerned with two problems:

1. Determining the right mix of project types in a company to meet a corporate goal.

2. Determining whether (and how) a set of projects in the portfolio can be executed by a company in a specified time, given finite development resources in the company. This is called pipeline management.^[4]

   ^[4] Pipeline management is sometimes treated as a separate topic from portfolio management. But where you see one discussed, you usually see the other as well. It is treated here as part of the larger portfolio management problem.

Because of the breadth of the topic, I'll clarify what we'll be tackling in this chapter, especially because it is just one small, albeit critical, piece.

In this chapter, you will learn how to leverage your company's investment in use case CM to provide the measurements and reports you need to manage these two key problems of portfolio management: mix of project types and pipeline management.^[5]

^[5] See (Hass 2003) for a general discussion of the use of configuration management as a source of metrics to facilitate project management and process improvement.

Both the project portfolio management process and use case CM process are assumed to involve databases (if your company is small enough to do either by "hand" you probably don't need project portfolio management anyway!). You will be shown a minimal set of data that each database needs to track in order to allow you to measure and report the mix of project types and measure and report whether the projects in the portfolio are executable given the finite set of development resources in the company.

If you already have a project portfolio in place, the framework described in this chapter is an excellent sanity check, comparing what you think your allocation of resource by strategic project type is to what your use case CM database reveals. If you don't already have a project portfolio database, you will learn what you need to get started on a bare-bones project portfolio.

In conjunction with textual descriptions of data and reports, the appendices referred to in this chapter include Microsoft Access examples of tables and queries to better illustrate the implementation details of what is being discussed without getting in the way of the discussion here in this chapter. I use Access not because I feel that it is the ideal tool for implementing a project portfolio database, but because it presents database tables and queries in a relatively non-technical format. Having said that, I have used Access as a tool to prototype a functional project portfolio database, including a hookup to a commercial requirements management tool in which use cases and other requirements were stored. The Access prototype was used for well over a year by the company and allowed the portfolio management team to get the ball rolling, do some real portfolio management, and learn from the experience in preparation for selection of a replacement for Access.

What you will not learn in this chapter is various theories of project portfolio management or what mix is right for your company. On the other hand, in the spirit of 20/80 that runs through this book i.e., showing the 20% of a discipline that may well deliver 80% of the valuewhat you are presented in this chapter may be all the portfolio management you need, or at least all you'll realistically ever get around to using. For many companies, simply putting into place a simple framework for measurement is all that is needed for the "lights to go on" ("We're planning how much new product development?! That will require three times the number of staff we have!"). And to progress into more sophisticated project portfolio management, you will have to take this first step anyway. As Cooper et al. (1998) suggest, perhaps the place to start in answering What mix is right? is to simply begin by asking What mix do you already have? a question they state many companies are unable to answer.^[6]

^[6] See Chapter 3, "Portfolio Management Methods: A Balanced Portfolio," section Points for Management to Ponder.