Investing in benefits: change portfolio management with MoP
- Blog
- Methods & frameworks
- Portfolio management
- Strategy
- MoP
April 29, 2021 |
3 min read
- Blog
- Methods & frameworks
- Portfolio management
- Strategy
- MoP
Before the advent of portfolio management, organizations often didn’t have a true line of sight of where change programmes and projects generated benefits and value.
This led to inefficiency and duplication of initiatives. At the same time companies needed to respond and adapt to changing circumstances.
Therefore, the driving force for portfolio management was to enhance strategic planning, investment appraisal and delivery of programmes and project management. Consequently, the Management of Portfolios guidance (MoP®) was created to give business leaders a “helicopter view” of change activities, including costs, risks, resources, progress, benefits and value. This is essential to deliver the right changes to business as usual (BAU) via programmes and projects.
MoP and the fundamental questions of portfolio management
If you have portfolio-level responsibility in your organization, there are some fundamental questions to answer:
- Are we doing the right things and are we doing these things right?
- Does performance match the promise?
- Are we realizing expected benefits and therefore meeting strategic objectives?
Answering these questions was at the heart of MoP when launched 10 years ago to help portfolio managers prioritize programmes and projects to reflect strategic objectives. In addition, it was about reassuring organizations that they were looking at the totality of change and maximising benefits realization to achieve the greatest return on investment.
Managing portfolios is a big step up for professionals involved in change initiatives as it involves responsibility for multiple programmes and projects.
To be the best portfolio manager, you need to have an awareness of how such change initiatives, e.g. programmes and projects, run to effectively steer the people managing them.
Therefore, the guidance within MoP enables you to work at a strategic level across the entire organization and manage the totality of change going into BAU.
This means understanding finance and resources, selecting the right change programmes/projects, managing risk properly and handling stakeholder engagement at the highest levels.
MoP’s approach to portfolio management
MoP describes portfolio management as:
- Applicable at corporate level, directorate and functional level
- Needing a tailored approach
- More about integration and discipline than processes.
- Ensuring appropriate and reliable evidence is available to inform executive decision making.
- Offering full line of sight of change initiatives through to benefits realized
- Paying its way and contributing actively to the organization.
What arises from this approach is the central importance to an organization of prioritizing the allocation of scarce funds in terms of:
- Return on investment or attractiveness.
- Risk or achievability
This is not a one-off exercise, but a dynamic, iterative process designed to ensure continued prioritization, strategic alignment and balance in the context of a constantly changing environment.
Portfolio management with MoP is concerned with the balance between changing the business and running the business. By changing BAU effectively, organizations can manage the benefits realized and achieve their strategic objectives.
People running portfolios have the ability to define how a business will change, while being comfortable with ambiguity and the pressure of making the right decisions.