Key Requirements for a Portfolio Management System

Following on from my previous post, here are the best practice capabilities to look at for a portfolio management system:

1. Managing demand. Requests for projects are generated by multiple sources in an
organization. All projects, regardless of their size, represent work efforts in the organization
that have to be evaluated and, if appropriate, planned and executed. The
portfolio management system acts as the repository of all project requests and
allows for the standardization of requests for more objective evaluation of projects
based on uniform criteria.

2. Project topologies. Within an organization, requests will be generated for different
types of projects that vary in size, cost, and deliverables. The portfolio management
system permits grouping of projects into multiple portfolios for comparison on an
equivalent basis for similar project types.

3. Stakeholder involvement. The importance of portfolio management systems has
increased with the focus on corporate governance. Organization wide decisions with
significant impact now require greater oversight. Portfolio management systems
now have workflow capabilities out-of-the-box. All stakeholders from the project
requestor to the financial managers, project managers, and finally senior leadership
can be involved in the creation of a project request, its completion, and signoff by
different participants.

4. Strategic alignment. The ability to bridge strategic objectives to projects that will
support their achievement continues to be an important capability of portfolio
management systems. With the development of more sophisticated strategic planning
models, portfolio systems have maintained the ability to define the impact of
projects on the organizational strategy.

5. Prioritization and optimization. Together with strategic alignment, prioritization
continues to be one of the main objectives of using a portfolio management system.
Although Excel is a viable alternative for ranking projects, portfolio management
systems now have more sophisticated modeling capabilities for multiple prioritization
perspectives and optimization based on different types of constraints.

6. Budgeting and cost tracking. The planning of budgets at a summary level has
always been a project attribute taken into consideration in portfolio selection and
prioritization. A portfolio management system provides the capability to disaggregate
costs by cost types and cost centers. In addition, the tracking of project cost

7. Executive dashboards. Reporting of status at the portfolio and individual project
level is a requirement for the portfolio manager and the senior leadership involved
in the governance process. Because the portfolio management system acts as the
central repository of all portfolio information, executive dashboards with summary
performance metrics can be produced directly from the portfolio management
system.

8.Integration To enable both inputs and outputs from the portfolio system to other
line-of-business systems, integration becomes a key component for leveraging
project- and portfolio-level data. Status updates of selected projects in their respective
portfolios might come from disparate systems making the need for system interfaces
even greater. Therefore, an application programming interface becomes a
critical component of any portfolio system.

Any others you can think of?