Building A Balanced Project Portfolio

Portfolio Assurance Resources

Building a balanced portfolio of business initiatives

The information in this guide is intended for general purposes only. For more specific guidance around your organisation’s projects, please get in touch with our team.

In this section, you will find:

Establish the total project/programme budget
Assess all parts of the organisation and their need for improvement
Combine short and long term initiatives to maintain momentum
Don’t drain too much resource from any one area
Drive both internal and external-facing project outcomes
Innovation or improvement?
Give enough budget to each initiative – don’t spread too thin
Consider the strategic direction and its feasibility through a portfolio – advice for leadership teams
Chat about balancing your business initiatives with portfolio assurance
Where to next?
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When businesses grow to a certain size and scale, it’s not effective to only do one project at a time. Businesses that are evolving quickly will have multiple projects on the go, which means they’ll need to take a project ‘portfolio’ management approach. With limited budgets and resources, the challenge for businesses will be to identify the activities that are the most important, pressing, and aligned with business strategy. Leadership teams will often have spirited debates in order to prioritise business initiatives – a portfolio approach can help facilitate the conversation.

In this guide, we’re going to explore how businesses can create a balanced portfolio of business activities.

Building a balanced project portfolio IQANZ

Establish the total project/programme budget

Before establishing an accurate portfolio, there needs to be a clear budget for all projects and programmes. The budget may be capital and/or operating expenditure. We understand that not all organisations operate like this, but viewing the total of all project budgets as one is important, as this will help businesses understand and prioritise their initiatives.

Doing up-front analysis of the total budget to allocate across business activities gives leadership teams a great starting point to divide up the activity.

Businesses with projects already in progress will want to consider the total budget for those projects plus whatever is available for new projects or expansion of existing activity.

Assess all parts of the organisation and their need for improvement

A portfolio of projects will serve a business best, if there has been upfront planning and analysis to identify the actual needs of the business. A business strategy is the guiding statement under which projects are created. But it’s useful to also do some research to assess how things are currently operating – what are the biggest pain points, where are the greatest risks?

Going through this process will require careful analysis, and may even warrant its own dedicated project.

This clear picture of what’s happening now, along with the strategy and understanding of the total budget will provide the business with valuable information to proceed with building a well-balanced, considered portfolio.

Combine short and long term initiatives to maintain momentum

It’s true that your portfolio should speak directly to the business strategy. But, it is also important not to attempt too many large programmes or projects concurrently. Businesses often make the mistake of trying to solve too many problems with too few projects. Together with typically optimistic expectations on delivery, a portfolio can quickly become ineffective.

Instead, our advice is to break down the various business improvements and changes into smaller chunks and determine which ones represent the ‘quick wins’ and can be tackled as shorter term projects. If your portfolio includes these along with some longer term activities such as a transformation programme, the business will enjoy the momentum of making improvements more frequently, whilst still working on the bigger picture in the long term.

Don’t drain too much resource from any one area

As you build a portfolio of projects, pay special attention to where your stakeholders and business units will be involved. Even if you plan to bring in a contracted project team, many initiatives will require input by BAU teams. Project teams need to think carefully about whether the planned projects are going to demand too much attention from your permanent staff.

These staff in your business have their own KPIs and job to fulfil. In order to get the best input from them, avoid having too many overlapping projects for them. There will be times where this is unavoidable. But, as much as possible, project teams should try to stagger certain phases so as to not overload any one person.

Drive both internal and external-facing project outcomes

How is your portfolio serving the operational needs of the business? Are you making your teams’ jobs easier and therefore helping the business become more efficient? What systems are in place that need to be updated?

Now think about your end users – customers? The New Zealand public? Other businesses? How is your portfolio helping make their experience with your organisation better?

A business strategy should have outcomes that speak to both internal and external parties. Neither should be ignored- and often improvements made in fone area, will require action on the other. For example, building a new client relationship management system for internal users, will likely require a redesigned website or portal for customers to use. Projects don’t always need to be complimentary, but there are plenty of instances where they are.

Innovation or improvement?

Does your portfolio improve the business’ existing functions, or introduce entirely new capabilities? For a mature, large organisation, a portfolio will often contain both. The split between innovation and improvement, will be driven by the current state of the business. In the past few decades we’ve seen many large businesses go through ‘digital transformation’, whereby the operations of their business are brought online and supercharged by updated technologies. As more businesses embed a baseline level of digital capability in their business, their projects may start to focus more on improvement. However, as things progress, innovation may take the form of an entirely new product or service offering. In this case, a project or programme will need to be put in place to help this materialise.

Give enough budget to each initiative – don’t spread too thin

Another common issue we see in large organisations is the desire to fix everything at once, or simply do too much at once. This is a big mistake – even if the projects seemingly have little overlap. A business needs to actively manage its portfolio. This includes tasks such as helping projects teams alleviate threats and risks, conduct reviews on budget and progress and resolve stakeholder issues. If a business ends up introducing too many projects at once, it will be harder to keep a close eye across all the initiatives.

But spreading yourself too thin is also a problem – eg. not having enough budget for each project can bring progress down to a snail’s pace. Project teams squeezed for budget and unable to deliver in a timely manner can lose engagement with the task at hand, and may create tension with the rest of the business. Leadership teams can help their project staff by giving them a sufficient budget over a realistic timeframe.

Consider the strategic direction and its feasibility through a portfolio – advice for leadership teams

While we talk often about the portfolio’s need to be led by the business strategy, it shouldn’t render the strategy completely free of critical analysis and practicality. The strategy needs to translate to real business activity, otherwise it is simply words on a document. Leadership teams need to challenge themselves and each other to be as pragmatic in their planning as possible. When it comes time to establishing projects and a wider portfolio of activities, the strategy should guide this process fairly easily.

If you’re in the process of developing a business strategy, make sure to think a few steps ahead to the ‘doing’. If it’s hard to see how the mission might be achieved, perhaps it needs a bit more work to define.

Chat about balancing your business initiatives with portfolio assurance

If you’re looking for ways to manage your organisational portfolio in a way that drives better performance, IQANZ are experts in this space. We have specific methodologies and approaches for supporting you with a portfolio at the high level, whilst also offering programme and project-specific assurance at the finer detail. You can start this journey by contacting our team today to discuss your challenges.