Project Management Institute

Adjusting the model

BY TERESA (TERRI) KNUDSON, PMP, PgMP

The more I read about portfolio management, the more I learn about what it means. The definitions seem straightforward enough: PMI's Standard for Portfolio Management—Third Edition defines a portfolio as “a collection of projects, programs, sub-portfolios and operations grouped together to facilitate the effective management of that work to meet strategic business objectives.” This sounds very logical and obvious, but putting it into practice isn't quite so cut-and-dried.

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At the Mayo Clinic, we're still evolving our portfolio structure to find a model that works best for our overall organization. As use of this is expanding, it got me thinking about what was actually in our portfolios today and what we should be putting into them in the future. When we set out to define our portfolios years ago, the easiest place to start was at the beginning with projects. Once the organization understood what projects really were, we began expanding into programs, which allows for us to group projects into a collective set based on a common outcome or set of benefits. And here, just like our initial work with projects, is where we are still working on growing our knowledge of what constitutes a program and how management of this differs from projects.

As we continue to maneuver programs, and as portfolio management expands across our organization, we're finding more and more that it's necessary to define different categories of portfolios. The Mayo Clinic has multiple portfolios in a two-level structure. The top level consists of seven executive portfolios that directly align with our high-level business structure and are owned by the senior executives. The next level aligns with the operational business structure and provides portfolio management functionality to each department as it becomes ready to use portfolios for its specific business area.

All the projects in our portfolio management information system (PMIS) roll up into one of our executive portfolios and may also align to one or more of the operational portfolios. Sounds simple enough, but in our very matrixed environment we are realizing the need for portfolios by other business units, divisions, centers and various specialty groups. Since a portfolio is actually any collection of projects that are grouped together, the various portfolio management teams may have projects that are included in a number of other portfolios as well. Instead of more portfolios, the idea of sub-portfolios may be a better solution for simplifying this structure. This maintains the alignment under the executive level while allowing for separate management. A good example is within our IT department, where we have developed multiple portfolios and do sub-portfolio reporting based on organizational structure and staffing assignments.

It's easy to see how this can get very complex very quickly as more projects are added into the portfolios. Therefore, it's beneficial to have an overall framework as you build out your portfolio model. Doing this provides for more comprehensive portfolios, while supporting transparency, awareness and clarity across the organization.

As you think about your own organization, what does your portfolio structure look like? What's in your portfolio? How do both of these reflect and support your organizational management needs? PM

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Teresa (Terri) Knudson, PMP, PgMP, is the director of the enterprise portfolio management office at the Mayo Clinic, Rochester, Minnesota, USA. She can be reached at knudson.teresa@mayo.edu.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK MAY 2015 WWW.PMI.ORG

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