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Participants, Authorities, and Responsibilities in Project Portfolio Management
June 10, 2009 | Author: PM Hut | Filed under: Project Portfolio Management
Participants, Authorities, and Responsibilities in Project Portfolio Management
By Miley W. Merkhofer
The first step for establishing a project portfolio management function is to decide who will participate as active managers of the project portfolio. A project portfolio manager, typically a senior manager, should be appointed with accountability for the success of the entire project portfolio. (Check this list of important skills of the portfolio manager).
The portfolio manager should be given an estimate of the total funding to be made available, but it should then be up to the portfolio manager to determine how to allocate the funds within that cost constraint. It should be possible for the portfolio manager to suspend at any time further commitment of investment dollars due to cost increases, failure to make anticipated progress, changing economic climates, or shifts in business conditions. At the very least, the portfolio manager should have responsibility for recommending resource allocations for final approval by a committee of senior executives. In either case, senior executives should be enlisted to serve as a steering committee responsible for providing and updating (e.g., in response to changing business objectives) the value judgments and policy decisions needed to guide portfolio management.
A portfolio management team should support the portfolio manager. The team, oftentimes, includes department heads from suborganizations that generate requests for projects, provide project resources, and/or use project deliverables. The team should have responsibility for verifying cost, value, and risk estimates provided in support of project proposals and requests for resources. This team is then responsible for evaluating project proposals, accepting or rejecting proposals, accelerating and decelerating projects, allocating resources, and otherwise continuously managing the project portfolio over time. One member of the team should be designated as the primary contact person for each project manager.
Miley W. (Lee) Merkhofer, Ph.D., is an author and practitioner in the field of decision analysis who specializes in assisting organizations in implementing project portfolio management. He has served on advisory panels for several government agencies and has received grants and research awards for work in the area. Lee is an editor of the journal Decision Analysis.
Prior to becoming an independent consultant, Lee was a Partner of PriceWaterhouseCoopers, where he founded that organization’s capital allocation and project prioritization business practice. Lee is a founding partner of Folio Technologies LLC, a provider of web-based, project portfolio management software.
Lee received his Ph.D. in engineering economic systems from Stanford University. He is the author of the book Decision Science and Social Risk Management and co-author of the book Risk Assessment Methods.
Additional papers on project portfolio management can be found on Lee’s website, www.prioritysystem.com. E-mail: lmerkhofer@prioritysystem.com.
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