4 Step Guide to Simplifying your Portfolio Definition Process

Ian Needs

The portfolio definition process is where you define the terms, scope, catergorization and scoring of your portfolio and gain agreement on your basic portfolio model.

Here a 4 steps that will help you simplify your portfolio selection process.

Step 1:  When defining the portfolio mix, it’s important to gain early agreement on the scope of organisational coverage:

  • Groups, units, divisions, departments
  • Functional area and teams
  • Product/service types

Step 2: You also need to know the scope of work included within the portfolio:

  • Tactical projects
  • Administrative projects
  • Strategic projects
  • Innovation projects
  • Future vision projects

Step 3: You should define the project categorization scheme. Is it:

  • Mandatory
  • Strategic
  • Business support
  • Experimental
  • Infrastructure
  • Maintenance
  • Cross organisational

Step 4: Define the portfolio’s key performance indicators (KPIs)

  • Net present value
  • Productivity Index
  • Earned value analysis value added
  • IRR Internal rate of return
  • Cost/ benefit analysis