345.0 Portfolio Balancing
Step 6 Balance and Optimize the Portfolio
At this point, you have your prioritized list of work for the portfolio, as well as guidance on your available funding. If the available funding will cover all of the proposed work, you will be in the enviable position of moving forward without further portfolio adjustment. However, this is rarely the case. On the other hand, if you did not need to balance the portfolio, the process would be as simple as cutting back the work based on priorities until the remaining work fits within the available budget.
Portfolio balancing is the process of organizing the prioritized components into a component mix that, when implemented, is best aligned with, and best supports the organization's strategic plan. PortfolioStep makes a major assumption that the required balance points are usually set by the Executive for allocating resources, financial or otherwise, between the competing demands within a portfolio. These are the demands raised by the various business units such as Operations, Projects, Other Work, and so on. The balance points may be set in terms of actual dollar amounts, but more usually are set in terms of percentages. The latter approach provides more flexibility.
Optimizing the portfolio means making some final cuts and/or adjustments such that the combination of projects and other work gives rise to the maximum benefits to the organization given the resources and funds available. So, the combination of cutting the proposed work requests and balancing and optimizing the portfolio will take more time. It may also take a few iterations, as cutting back in one area may free up funding that will allow you to re-authorize work that was previously cut elsewhere.
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345.1 Cut Work to Fit Available Budget
345.2 Use Balance Points to Balance the Remaining Work
345.3 Cutting and Adding Work Out of Order
345.4 Stretching Out Projects
345.5 Optimizing the Portfolio
345.9 Techniquesportfolio management, project management, project office, PMO, project portfolio, project lifecycle management, project consulting, methodology development, quality management, project management training, portfolio training