Building a healthy project portfolio is about more than successfully executing individual projects. Keeping your portfolio in good condition also requires consistent performance that delivers optimal results, gives your business the best return on its investments, and efficiently limits the impacts from any complications or risks.
Many organizations don’t have the controls or data analysis tools in place to accurately gauge the health of their project portfolio, or to maintain that awareness on an ongoing basis. It can be a challenge to carve out time to implement processes that will enable you to gather the right information and to identify the best actions from the data you have available for review.
If you’re interested in assessing your project portfolio’s fitness, begin with some key questions that can offer important insight.
Does your portfolio contain unprioritized projects?
Though your priority list is likely to evolve as business needs and economic conditions change or new market opportunities emerge, every initiative should have an assigned priority to help maintain visibility into the overall portfolio hierarchy. It will be difficult to gain an accurate understanding of how well your portfolio is faring if you don’t have a good picture of what’s important, what’s urgent, and what’s still waiting in the wings.
Are multiple initiatives experiencing resource constraints?
Problems around resource allocations and consumption often bleed into other projects that may be vying for similar craft labor, for example, or for support from niche experts such as technology consultants or regulatory advisors. Without good visibility at the portfolio level, these resources bottlenecks have the potential to quickly impact the viability of downstream projects if fixed deadlines or necessary approvals can’t be met, and these issues are compounded when multiple efforts are involved. The health of your project portfolio could slide if you aren’t in tune with your resource management strategy across all projects.
Have delays in one project negatively impacted others?
Timeline troubles can also quickly snowball, dragging down large chunks of an otherwise high-performing portfolio. This becomes particularly damaging when the project team doesn’t have the controls in place to identify and proactively address schedule risks. Your portfolio’s fitness level could be at serious risk if the delays in one project find their way into other efforts.
Do you conduct regular reviews of your portfolio at different levels?
Periodic reviews are an important component in assessing the health of your portfolio but conducting an analysis at only one level won’t provide the insight you need. Instead, evaluations should be done at multiple levels. Look at projects individually to see where risks or opportunities could have wider impacts. Examine linked initiatives and scrutinize how well earlier projects are shaping up as a foundation for those that will come later. Review your portfolio at the top level, considering how close the returns on your organization’s project investments are to original estimates. A multi-level assessment strategy enables you to fully understand where weak areas may be threatening your portfolio’s overall health.
Is your overall ROI meeting your expectations?
It’s critical that your team monitor the return from your project spend. Poor financial performance in one project can easily diminish the value of other efforts and it’s not uncommon for an organization to have one or two high-performing projects while others lag in terms of financial payoff. This cascade effect may be linked to delays that hinder your ability to capitalize on a favorable market or to be first to launch a new product. It could also be a byproduct of systemic quality issues or missed objectives that don’t enable your organization to deliver the best results possible.