350.0 Authorization

Step 7 Authorize the Work

The Authorization process is where you determine the actual work that is approved for the portfolio. This is the last step of the Business Planning Process. The prior process of Prioritization ended with you having a ranked list of all of the proposed work for the portfolio. However, remember that one of the basic assumptions of portfolio management is that you never have enough funding to cover all of the proposed work. Therefore, the assumption is that not all of the prioritized work from the previous step will, in fact, be authorized.

The general flow of the Authorization process is to submit your total funding request for the portfolio. Unless you are defining your portfolio to include the entire company, your request is just one of many requests that are coming in from other organizations and perhaps other portfolios. Once all of the requests for funding have been received, the company executives make some fundamental decisions on how much they can afford to spend, and they provide that guidance back down to your portfolio. Your Steering Committee then needs to get together again. The purpose is twofold. First, the work requests are cut back based on priority so that the remaining work fits into the available funding. Second, the portfolio of work is balanced to match as closely as possible to your previously defined Balance Points.

Example: The balancing process cannot be done effectively until you know the total pool of money available. For example, let's say you are trying to keep funding for operations and support to no more than 50% of your total portfolio. When you prioritized your work, the total funding request was $500,000. Of that total, operations and support was $225,000. So, operations and support made up 45% of the total, which was in line with your Balance Point. However, later you receive feedback from the company that you will have only $400,000 available to you. You will probably need to cut some projects. However, if you are going to achieve your Balance Point, you are also going to need to cut back on operations and support by at least $25,000, if not more. This is why you cannot balance your portfolio effectively until you know the funding available to the portfolio. Once the final balancing (and cutting) is completed, the remaining work will be provisionally authorized for the coming year.

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350.1 Submit Request for Funding

350.2 Receive Budget Parameters

350.3 Authorize the Work

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