ITIL 4 defines a practice a practice is a A set of organizational resources designed for performing work or accomplishing an objective. These resources come from any or all of the dimensions shown in the center of the image below:
The purpose of the portfolio management practice is to ensure that the organization has the right mix of programs, projects, products, and services to execute the organization’s strategy within its funding and resource constraints.
If you are starting your portfolio management practice, understand not only the dimensions shown above, but zoom out to understand the wider context: the PESTLE factors… the temporal factors. Understand the context (zoom in and out to fully have a holistic view), engage with your stakeholders, and get your hands on key business documents that will help set the stage for success. These documents provide the context, direction, and governance needed to align the portfolio with the organization’s broader goals.
Since a lot of new portfolio managers ask “What documents do I need to make?” let’s walk through the key documents and how they play into portfolio management.
Before you make any docs (as eager as you are too) make sure you go LOOK AT THE DOCS from the biz!
Get Your Hands on These Business Docs
1. Vision and Mission Statements
At the heart of any organization are its vision and mission statements. These documents articulate the long-term goals (vision) and the organization’s purpose (mission). They provide a high-level guide for what the portfolio should aim to achieve. Every project and program within the portfolio should align with these overarching statements to ensure that the organization is moving in the right direction.
- Vision Statement: Where the organization aspires to be in the future.
- Mission Statement: An in-the now statement of purpose.
2. Organizational Strategy and Objectives
The vision is so far off and big…. how do we make it real? The organizational strategy and strategic objectives further refine the direction set by the vision and mission. These documents break down the vision into goals (typically qualitative and broad), chunking those goals down into objectives (clear and measurable), and creating a roadmap for what the organization wants to achieve in the short, medium, and long term.
- Strategic Plan: Outlines the long-term goals and strategies the organization will pursue. The strategy is the broad approach taken (in this case the broad approach the org takes) to achieve its objectives.
- Strategic Objectives: Specific, measurable goals that align with the strategic plan.
These objectives feed directly into portfolio management by guiding which projects and programs are prioritized and how resources are allocated. E.g. Strategy docs are passed to the Portfolio management practice and business docs are created for potential aligned projects, programs, etc.
3. Organizational Governance Framework
The governance framework provides the rules of the road, the guardrails, the toll gates… It outlines the roles and responsibilities for decision-making within the organization. It ensures that there is a structured approach to how decisions are made and who makes them. This framework is essential for portfolio management, as it defines how the portfolio will be governed, who has the authority to approve or reject projects, and how conflicts are resolved.
- Governance Policies: Expectations (rules) for how decisions should be made within the organization.
- Roles and Responsibilities: Definitions of who is responsible for what in the governance process.
In line with organizational governance, portfolio governance will need to be set up. Again, governance is the means by which [something] is directed and controlled. It’s great to have rules of the road, etc., but we also need to see a governing body — actual people. Thus we see:
- Org level – governing body is typically the Board of Directors + Audit Committee + shareholder. The governing body is accountable at the highest level for the performance and compliance of the organization.
- Portfolio Level – governing body can take on many forms, but again, it is a group of people, e.g. a Portfolio Governance Board.
- Program Level – Program Governance Board
- Project Level – Project Governance Board
4. Enterprise Environmental Factors (EEFs) and Organizational Process Assets (OPAs)
These are the internal and external factors that can influence portfolio management. EEFs include the organization’s culture, infrastructure, and market conditions, while OPAs consist of the processes, procedures, and historical data that the organization has developed over time.
- EEFs: Internal and external environmental factors that impact portfolio management.
- OPAs: The organization’s existing processes, procedures, and knowledge bases.
The Documents You Create to Kickstart Portfolio Management
Once you’ve had some awesome convos with the key players and you have gathered and reviewed the foundational business documents, the next step is to create the key documents that will guide the portfolio management process. These documents help establish the scope, direction, and governance of the portfolio.
1. Portfolio Vision
The portfolio vision is a document that articulates what the portfolio aims to achieve. It should align with the organization’s vision and strategic objectives but be more focused on the specific outcomes the portfolio is intended to deliver.
- Portfolio Vision Statement: A clear articulation of the desired future state that the portfolio will help the organization achieve.
2. Portfolio Charter
The portfolio charter formally authorizes the portfolio and provides a high-level description of the portfolio’s purpose, objectives, and governance. It’s essentially the document that gives the portfolio manager the authority to execute the portfolio.
- Purpose and Objectives: The charter outlines why the portfolio exists and what it aims to accomplish.
- Governance Framework: Details everything that will direct and control the portfolio. It really is akin to the rules of the road, guardrails on the road, toll gates on the road, etc. It also means clear definition of roles and responsibilities, including who has authority and how decisions will be made. It address risk, and conflict, and issues. It addresses reporting. ALL. THE. RULES.
People are often mystified (or bored) when they are learning about governance, so here is an example to make this more real. Governance is the means by which [something] is directed and controlled – the whole kit and caboodle. You hear this called the “governance framework.” Well who made this framework? Your friendly neighborhood governing body. This group of people provides oversight and steers us all in the right direction. The portfolio governance body is often called the Portfolio Governance Board or Portfolio Steering Committee. It typically includes:
- Executive Sponsors: Senior leaders ensuring alignment with organizational strategy.
- Portfolio Manager: Oversees portfolio execution and alignment with strategic goals.
- Program and Project Managers: Provide updates on specific initiatives.
- Finance Representatives: Manage budget and resource allocation.
- Risk Management Officers: Address and mitigate portfolio risks.
- Business Unit Leaders: Ensure portfolio outcomes support business operations.
- IT/Operations: Support the technical and operational needs of the portfolio.
- HR Representatives: Manage talent and organizational change impacts.
This group oversees strategic decisions, ensures alignment with organizational goals, and manages risks, resources, and performance across the portfolio.
3. Portfolio Roadmap
The portfolio roadmap provides a high-level overview of the major initiatives, milestones, and timelines within the portfolio. It’s a visual tool that helps stakeholders understand the journey the portfolio will take from inception to realization.
- Major Milestones: Key points in time when significant achievements or decisions are expected.
- Timeline: The roadmap includes a timeline that shows when different initiatives will start and finish.
4. Portfolio Management Plan
The portfolio management plan is the comprehensive document that outlines how the portfolio will be managed, monitored, and controlled. It covers everything from scope management to risk management to stakeholder engagement.
- Scope Management: Defines the boundaries of the portfolio and how changes will be managed.
- Risk Management: Outlines how risks will be identified, assessed, and mitigated.
- Resource Management: Details how resources (financial, human, etc.) will be allocated and optimized.
- Communication Plan: Describes how information will be communicated to stakeholders.
- Performance Monitoring: Sets out how the portfolio’s performance will be measured and reported.
5. Stakeholder Register and Engagement Plan
These documents identify the stakeholders involved in or impacted by the portfolio and outline how they will be engaged throughout the portfolio lifecycle.
- Stakeholder Register: A list of all stakeholders, their roles, interests, and influence.
- Engagement Plan: Strategies for how to effectively engage and communicate with stakeholders.
Starting a portfolio management initiative requires a blend of existing organizational documents and newly created portfolio-specific documents. By leveraging foundational elements like the vision, mission, and strategic objectives, and then building on them with documents like the portfolio charter, roadmap, and management plan, you set the stage for a well-aligned and effectively managed portfolio. Each document plays a vital role in ensuring that the portfolio not only aligns with organizational goals but also delivers measurable value over time.