4 Step Guide to Simplifing your Portfolio Definition Process

Author: 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 this 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

You can learn more about selecting and prioritising projects in this short video.