Keep it steady



executive summary

  • img Portfolio management means balancing overall corporate profit and revenue goals against the demands of multiple, sometimes competing projects
  • img Portfolio managers see their company's bigger picture and prioritize their company's projects.
  • img Portfolio managers may apply special tactics based on their own experiences, corporate resources, industry conditions or other variables.

The best portfolio project managers often are experienced project managers but their portfolio duties demand additional, broader talents. But it would be a mistake to think that managing a company's portfolio is like managing one big project.

“The question is: How far along do [portfolio managers] go toward managing the business?” says Michael C. Nollet, PMP, a project management instructor at Boston University Corporate Education Center in Boston, Mass., USA. “In the most extreme case, the project management director might be sitting with the customers and managers who make business decisions. At the other extreme, they may just be rolling up the data and supporting the client.”

img Regardless of the strategy, Mr. Nollett believes that the portfolio manager's role optimally remains subordinate to the same good business practices that govern any profitable company.

Project Managers First

Resisting the temptation to substitute the portfolio manager's judgment for that of top executives and board members can be a challenge, says Enrique Monzon, IT director, corporate planning and project implementation at Pan American Life Insurance Co. in New Orleans, La., USA. “We're not the decision-makers,” he says. “The business owners are the decision-makers.”


img Successful portfolio management usually begins with successful project managers. Depending on many variables—the corporation's size, the number of projects it undertakes year in and year out, the size and import of those projects to the company's bottom line—the portfolio manager may be a top-level executive or a project management office director reporting to that executive. Whatever the portfolio manager's place in the hierarchy, that individual is almost always a seasoned project manager, Mr. Nollet says.

Companies approach portfolio management differently, partly due to industry conditions and maturity. “Ours is a very structured and planned approach to managing a portfolio of projects,” says Tejas V. Sura, joint managing director for Conart Engineers Ltd., Mumbai, India. In addition to well-established protocols for determining profit projections and client fiscal health, Mr. Sura's portfolio of construction projects also balances project location costs and geographic deployment of material and labor resources.

By contrast, Mr. Nollet's IT-intensive portfolios exhibit more irregularity, with standardized portfolio management methodologies and rigorous cost accounting subsumed to the demands of new and rapidly developing technologies and technology markets. “A lot of it is ad hoc,” he says.

A company's PMO administers the portfolio when the project workload is sufficient to require full-time attention to project recruiting, status reporting, summarizing, filtering and other functions, Mr. Nollet says. A PMO also can help standardize the way scheduling, resource allocation and other portfolio management duties are handled between multiple business units or across the organization.

One Suit

Portfolio management methodology—determining who reports to whom, why projects make it into a portfolio (or not), what gets tracked and so on—is similar among many companies. Tim Jones, director of program management for the xSeries and IntelliStation product lines at IBM Corp. in Research Triangle Park, N.C., USA, describes his company's process like this: IBM operates on an annual planning cycle linking individual product line roadmaps written by strategy, marketing, development and portfolio management teams to the company's overall financial plan. “What you're trying to do at the most basic level is meet our financial goals, our profit plans,” Mr. Jones says.

Executives and managers use IBM's internally evolved integrated development process to incorporate product development and life cycle management decision checkpoints and prioritize projects. General managers review and approve such projects, judging their relevance in updating or expanding product lines (series in IBM parlance). A final roster is submitted for approval by senior executives, among them IBM president, chairman and CEO Samuel J. Palmisano.


The use of focus groups, where they are the key representatives of the users, is useful to ensure the project can be accepted throughout the company and in the market.

Mabel Lau-Wee Ai Lem,
Senior Manager, Information Management,
NTUC Insurance Cooperative Ltd.,

Mr. Jones' team maintains and oversees the product plan roadmaps and enforces deadlines; other teams are responsible for financial planning and product rollouts. General managers are responsible for overall financial returns of their series' projects. Mr. Jones uses Microsoft Project® to track projects' progress, but otherwise, it's a low-tech process of weekly and monthly meetings where project managers review status and report results, market data, past projects' experience and ongoing obstacles to the general managers.

“We're very much focused on fact-based decision-making,” he says, though he acknowledges that there's something of an art to balancing competing managers' perspectives and resource demands.

IBM's overall portfolio management methodology resembles that of many other companies. It includes cost control (as opposed to documenting ROI, which normally falls to other executives after a project is completed), fixed deadlines and frequent, regularly scheduled meetings to facilitate rapid response to changing project circumstances. Its system requires upper-management buy-in and relies on human judgment informed by internal and competitive intelligence.

Many Tailors

Mabel Lau-Wee Ai Lem is senior manager for information management at NTUC Insurance Cooperative Ltd., Singapore. Like other portfolio managers, Ms. Lau relies on weekly project meetings and tracking software to keep projects on schedule. But she also has risk managers and auditors update her office on project status and conducts stakeholder focus groups to assure projects remain pertinent to their needs. “The use of focus groups, where they are the key representatives of the users, is useful to ensure the project can be accepted throughout the company and in the market,” Ms. Lau says. “Focus groups are useful in selling the new changes to the rest of the related people in the group.”



1. Eliminate communication lapses. “When a project fails, it is rarely due to technical problems,” says Tiong Soon Kit, PMP director of the professional services and outsourcing practice at Opentech Consulting Pte Ltd., Singapore. “So far, on almost all my project engagements, the stress points are always due to communication problems. I've learned the hard way to establish correct expectations and constant updates in closing the loops, and I establish correct expectations again and again. Clients don't like to hear bad news, but surprises are worse.”

2. Create a good framework for making correct decisions. “Deciding what to build is important; building the wrong thing is a huge risk,” says Tim Jones, IBM Corp., Research Triangle Park, N.C., USA.

“You need a good framework for making the right decision, and then you need procedures for keeping your plan current in the face of market changes and competitive challenges.” Computer technology, particularly, needs this implementation because advances come virtually every day, Mr. Jones says.

3. Never shoot the messenger. “I am utterly transparent, and that, oddly, is my best defense: There are no secrets,” says Michael Hugos, chief information officer at Network Services Co., in Mount Prospect, Ill. USA. “I encourage everyone to speak the truth as quickly as they see it. I never shoot the messenger and I protect the people who bring me bad news.”

4. Avoid over-reliance on technology. Mr. Hugos prints out weekly project updates posted to his company's intranet on paper for the top-level executives. “You really can get an amazing amount of stuff done with simple technology,” he says.

5. Establish a common platform at the start. “When customers' and project managers' expectations differ, you start at a disadvantage,” says Jack Kline, president and COO for Christie Digital Systems USA, a digital projector manufacturer in Cypress, Calif., USA. The expectations of Mr. Kline's business customers in China, Japan, South America and Europe differ considerably from the U.S. Army's and the other governmental agencies Christie works with, so it's imperative to establish performance benchmarks at the outset; this avoids costly misunderstandings later on. “Everyone needs to be clear on system limitations, clear on expectations, so then at least you have a common platform for everyone to refer to,” Mr. Kline says.


Transparency is your best defense. No one can say they didn't know, and no one can blame you.

Michael Hugos,
Chief Information Officer, Network Services Co.,
Mount Prospect, ILL, USA

Many portfolio managers say they rely more on personal interaction with senior executives and subordinates than on software to keep projects on track. Michael Hugos, chief information officer at Network Services Co., Mount Prospect, Ill., USA, says his PMO director files weekly project updates on the company's food service, janitorial and printing paper supply businesses on the cooperative's intranet. However, Mr. Hugos also has the updates printed out for distribution to the CFO, COO, vice president of sales, and representatives of the 80 member companies of the Network Services cooperative.

The low-tech approach provides portability and instant access for executives. “Clarity of thought is more important than cleverness of technology,” he says. The dashboard includes updates on each project's status, deadline and cost to complete, and current equipment, supply, maintenance and consulting budgets. The dashboard also creates healthy peer pressure on various departments and member companies to keep their projects on track, Mr. Hugos says. “They all want to be in the ‘done’ column.”

img All portfolio managers adhere to project completion deadlines, but each sets his or her own standard for hitting progress checkpoints. Mr. Hugos splits projects into three stages: define, design and build. He won't let a project linger in the define stage for more than six weeks. “If we can't define something in two to six weeks,” he says. “That's a sign you don't know what you're doing.”

Niel Nickolaisen, director of strategic planning for Headwaters Inc., Salt Lake City, Utah, USA, tries to limit projects to no more than three months' duration. In his previous position as chief information officer at Deseret Book Co. in Salt Lake City, Utah, USA, he saw that extending the publisher's projects any longer can expose them to market changes; when the public's reading tastes shift, it can interfere with the project's original goals.

An exception is Deseret's ongoing customer management initiative to match customers with their transaction histories across the publisher's 41 retail stores in nine states. Mr. Nickolaisen broke this project down into discrete steps—associating transactions to individual customers, tracking customers' gift-buying habits and implementing suggestive selling—based on which steps offered the fastest return and were most important to Deseret.

Corporate vs. Project Demands

Ultimately, whether they attend board meetings or just report to the executives who do, portfolio managers often balance decision-making authority with a need to build and maintain consensus advancing bigger corporate profit goals.

“Transparency is your best defense,” Mr. Hugos says, stressing that uncommunicative IT project managers and the CIOs to whom they report sometimes become scapegoats when projects go wrong. “When everyone knows what's going on continuously and not just when your back has been forced to the wall, no one can say they didn't know, and no one can blame you unless you really are incompetent.”

An illustration of the balance between project demands and corporate priorities comes in portfolio managers' willingness to reprioritize or abandon projects that no longer fit company goals or the marketplace. “Our process assumes we start more things through the pipe than we finish,” Mr. Jones says. “You want to kill these things early if you can.”

Mr. Nickolaisen says that when Deseret executives launched their customer management initiative, the company was migrating from its legacy royalty management system for authors. A few months ago, the firm shelved the new royalty system to complete the customer management initiative. “Be willing to stop work on a project that has become a lower priority,” he says. “We tend to think that once we've started work on a project, we have to complete it. And that's not necessarily true.” PM

William Hoffman is a freelance writer based in northern Virginia, USA.

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