A portfolio

A portfolio was described earlier as a list of projects. An organisation may have one or many portfolios characterised by a common budget or a common department.

The purpose of creating a portfolio of projects is to increase the likelihood that they will succeed and to reduce the risks of failure arising from undertaking them in a complex and volatile environment. So it is better to define a portfolio as a group of projects gathered into a governable unit to facilitate their effective co-ordination and success.

Unlike a project and a programme, it is likely that the portfolio will never end. As projects are completed new ones take their place, so when judging the success of a portfolio that has no fixed outcome it is necessary to look for a steady stream of signals that:

e projects are being delivered on time; e projects are being delivered on budget; e projects are being delivered to specification; e projects are enabling business benefits to be realised; e the plan is regularly updated and approved by the business sponsors;

e the portfolio is aligned to the business plan; e the portfolio frequently contributes to the achievement of business objectives.

These benchmarks apply to projects that fall within a common budget or department. It is possible to conceive a portfolio of projects specifically pulled together to deliver a particular business objective. In other words, a greater degree of intelligence has been applied to the creation of this kind of portfolio because it has an end target in mind. This is a programme.

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