Portfolio analysis is a crucial component of companies’ discovery and development management procedures in all industrial sectors. Project management is the management of industrial processes at the micro-level, and portfolio management is the overall management of the company’s portfolio at the macro level.
The portfolio management process involves multiple strategies that determine the projects that a company should focus on and research and devise innovations. This process is carried out to analyze if a project’s portfolio is meeting the corporate competitive target. In all, project management strategy involves strategies that ensure that the projects are being carried out well.
The Need for Portfolio Management Professional for a Company
Portfolio managers are essential to provide an idea about a company’s overall working status. A portfolio manager carries out portfolio management for the following reasons:
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Categories and gives a complete portfolio outlook of all the projects being conducted by the company.
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Evaluate and prepare the progress report for all the projects against a set milestone criteria.
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Verifies and approves projects for a practical addition to the active portfolio of the company.
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Approves prospected projects before they are advanced to the next stage.
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Chooses the degrading projects and carries out its removal from the active company portfolio.
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Identifies and manages the various risks associated with the portfolio.
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Develops and devises the most suitable portfolio risk responses.
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Prioritizes projects to be developed further.
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Modifies or aligns the projects under the portfolio according to the industry experts’ current prioritization strategy.
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Develops and executes portfolio adjustment action plans for the betterment.
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Review the portfolio performance concerning prioritization and current strategy.
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Reviews and reports portfolio resource alignment.
Supporting Information for Portfolio Analysis
Valuable conclusions regarding portfolio analysis are created with the required data. This data is collected by any means, including current project data (invested resources, the pace of progress, risk assessment, value addition methods, etc. It equally considers historical project-related data on the success and failure (attrition) of a project. Strong portfolio analyses are always challenged by those defending the status quo related to a particular company. These portfolio studies take a reality check if the data is relevant and authentic.
How Are the Gathered Results Relevant?
Validating and ensuring the accuracy of portfolio analysis’s collected results is an enormous task that required support from senior management authorities. If the collected portfolio analysis data lacks accuracy, managers rely on their industry experience and prospective development instincts. This accuracy in the portfolio assessment data is achieved after overcoming several challenges that are faced in the process of integrating the data. The various aspects that the portfolio manager has to be careful about surely, are:
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No conventions for the type of data to be collected and the occurrence of deception data types.
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Frequent changes to data types hinder the process of historical comparisons.
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Standardization of open text fields for essential data.
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Low data entry compliance – data entry by project managers in comparison with few data entry experts.
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Use of one single version for a particular operation by all members.
Portfolio managers must set up mindful protocols that regularly validate the administrative assistant’s data integrity to perform this task. A critical component of data integrity is a perfect method to store this data. The primary data set is collected to be stored using a secure server with an appropriate backup mechanism.
Copies of the portfolio analysis results are to be prepared periodically in short intervals (at least monthly) for many reasons. When there is any disparity related to data storage, the company uses a copy to continue working. Portfolio tracking systems are designed to capture the recent data and not the way the data was yesterday or last year. If one wants to compare the current position with past status, it refers to this copy of the past portfolio.
A precaution that is to be taken while choosing a point from the past is that the operational definitions and data types should be the same as the current ones. If the descriptions have changed over time, the need is to mention the differences between the two data sets. Copies of the portfolio analysis data need to be maintained at regular intervals, e.g., monthly, and stored separately from the primary data set.
Storing the Results to Make Mindful Decisions for Future Use
The results obtained from data analyses are stored logically at a secure location accessible to all the portfolio managers. When a decision-maker has carried out a detailed data analysis, a decision-maker will likely refer to it later. This is to see how great things have changed over the years. A portfolio manager might be asked to perform the same portfolio study using a different process; in this situation, both the analyses’ results must provide similar results.
Making assumptions about external benchmarking
Comparing the average performance data of a set of companies is essential to support the status quo and provide further points that are to be changed. This is done if a company is lacking in terms of performance criteria in the market. Our company helps to maintain portfolio consortiums, sharing portfolio performance data for our client companies.
These are the essential functions of portfolio management for all the companies in almost every industry. In principle, all these procedures are very well organized by a portfolio manager or a portfolio management service expert. Most companies allocate at least some of these functions to other companies like ours to get a detailed report on their portfolios.
