Introduction

A portfolio is the higher level grouping of  all demands, projects and programs that typically serve a business or a specific value stream in case of large enterprise.  For example, all demands and projects of a small or medium size enterprise may be managed by a central office without requiring to create Portfolios. However, in case of a large enterprise, say, with multiple product lines or services, demands / projects that fall under a specific product line or a service can be grouped under different portfolios so that they can be reviewed together for funding as well as for execution planning and monitoring.  The concept could be extended to manage all demands & projects that belong to functions such as Marketing, R&D, HR etc.

Portfolio Planning & Review Cycle

The process of reviewing the project demands, approving them for execution and allocation of funds is referred as Portfolio Planning Cycle. An organization can have as many portfolio planning cycles as they need within a year – either at defined periodicity or as and when required. Portfolio Planning cycles are aligned to the financial year, as they can only distribute the funds made available through budget provisioned for the financial year. Succeeding portfolio planning cycles can only utilize the residual budget available post the earlier cycles.

Portfolio Planning & Management Process

Following diagram provides a high-level view on the activities (and the sequences involved) in Portfolio planning & Management.

The above depicted processes can be implemented through a central Portfolio Planning & Management office reviewing demands across the organization (SME segment) or through a decentralized organization (likely scenario in large enterprise).

Portfolio Planning & Review (PPR) is always linked to a financial year, as it has to draw the budget from the organization’s financial budget. We envisage that organizations can have one or more than one PPR cycle in a financial year. A typical illustration of financial year vs PPR cycles could be as below.