Organizations have trouble investing money in projects and programs that give high returns. That is because while some projects may look good on paper, that might not be the case in execution. So, companies must gain clarity through the lifecycle to select appropriate projects. The portfolio management lifecycle can help optimize the entire project process. Here is everything you must know about it.
Portfolio Management Lifecycle Explained
The portfolio management lifecycle is a process that is used to collect, categorize, identify, prioritize, select, authorize, and review components inside the project portfolio. The lifecycle is an integral component that guarantees the portfolio is performing well.
Besides that, it also ensures that all the indicators are performing according to the plan set out by the portfolio project manager. So, any company doing the project or portfolio management must use the lifecycle.
The Stages Of The Portfolio Management Lifecycle
Here are all the stages involved in the portfolio management lifecycle:
The purpose of identification is to create an updated list with enough information on new and current components. All of these components will be managed through the portfolio. It is a crucial step that will kick-start the entire lifecycle and the coming stages.
The primary purpose of categorization is to group all components that were identified into multiple groups. Of course, the categorization component will also involve setting decision criteria and filters that will help evaluate the various categories. The categories will also depend on the strategic plan.
All the components inside one category will have a common goal and will be measured similarly. Categorization allows organizations to balance investments and risks between projects.
Evaluation involves gathering relevant information to evaluate all the components set above. The purpose is to compare the various components and develop a selection process. Each component of the portfolio will have summarized information that will be its evaluation.
After the evaluation process, there must be a shortlisting of all the components based on the organization’s limits. The components with the highest value will be selected during this process. After all, the aim is to maximize the value of the projects and portfolio.
Each component of the portfolio will have a unique priority. The purpose of prioritization is to rank the various components in order of priority. Doing this will help the organization divide the components and work on each aspect of it.
Finally, the lifecycle ends with authorization, and the objective of this is to communicate all the decisions. It also helps to officially allocate the human and financial resources to execute all the components within the portfolio.
That was the complete portfolio management lifecycle that each portfolio must go through for successful implementation and execution. Of course, portfolio management does not end here because many other processes are also associated with it. All of these processes help optimize the project management process in no time.