Project Management Standards (Part 5 of 5) - Portfolio Management Standard

As much as the concept of project management has gained widespread acceptance, the industry is now busy with its natural corollary – Portfolio Management. The central issue in Portfolio Management is doing the right work in the right manner.

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It is a fact that project managers have executed projects without a documented set of processes - or, in other words, a handbook on portfolio management. Now, with Project Management Institute's (PMI) initiative in bringing out ‘The Standards for Portfolio Management’, project managers can look forward to a fresh resource to help them professionally complete projects.

A portfolio may be said to denote a collection of active programs, projects and other work undertaken at a given point in time for organizations to attain strategic objectives.

Portfolio management plays many parts in the sense, it helps to identify, assess, prioritize and control various portfolio components to facilitate organization exploit the limited resources optimally. It is true portfolios sweepingly embrace all organizational functions including finance, marketing and human resources – apart from strategic objectives. Thus portfolio management has assumed importance as an effective method for corporate governance.

The Standard for Portfolio Management designed by the Project Management Institute (PMI) provides a guide to what may be called as professionally acceptable practices in portfolio management. It may not be wrong to state that Portfolio Standard is an extension to its predecessor ‘A Guide to the Project Management Body of Knowledge’ (PMBOK Guide).

It may also be further stated, without fear of contradiction, that the Standard provides portfolio managers with the same quality of knowledge and practices laid down for project managers in the PMBOK Guide.

Lately, PMI has released a second edition of "The Standard for Portfolio Management" which has drawn criticism from various quarters. It is said there is are glaring inadequacies in that the revisions fail to explain how an IT organization can evolve its own portfolio management program. Experts complain the revisions deal in depth in some areas and inexplicably gloss over the rest.

For instance, the standard lays stress on the importance of a portfolio management program, but fails to explain how to set up portfolios in the first place. If something has to be acknowledged as Standard, then it has to be balanced and deal comprehensively with all aspects.

Of course there is also some appreciation that new standards published by the PMI set things straight and spell out healthy practices for both program and portfolio management, as well as project portfolio risk management.

To ascertain the validity of Standards on Project Portfolio management, a study was done comparing research documents of portfolio management used in project management from PMI and Association of Project Management (APM).

The research showed a reference for standards should contain technical specifications, and should be acceptable, universally applicable, well-documented, and not made compulsory. The results showed there is evidence that PMI and APM standards fulfill all these requirements.

Notwithstanding, the different reactions to Standards of PPM, sources close to PMI claim that the views and comments of thousands of people are taken into consideration in the development of the final standard. The resulting standard may not necessarily be the cutting edge, but certainly good practices commonly used by most of the organizations.

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