Fordham University            The Jesuit University of New York

Portfolio Management
There are four categories of projects, or four ‘buckets’ for a budget; portfolio optimization really only deals with Improvement projects.

Improvement Projects: Where there is budgetary discretion, what advances the University’s goals, what implements the strategic objectives?

Compliance Projects: Must be done, according to Legal, Audit, NYState, etc.

Operations Projects: Keep the lights on, the ERP functioning, etc.

Replacement Projects: Risk assessed, end-of-life, hardware maintenance

What Is Portfolio Management?
Portfolio Management is the process by which a collection of projects is kept in alignment with the organization’s strategic drivers, ensuring that resources, (budgets, people, infrastructure) reflect those drivers in in the same proportion as each driver to the others. In this way all projects are selected and prioritized across the organization and aligned along strategic goals and organizational constraints.

This effort requires that the strategic drivers are established, agreed to, and given a specific emphasis. There are activities that establish this, and then the portfolio is analyzed to determine the degree of alignment. A “pairwise comparison” of each driver is performed by senior management, and then rationalized for a common weighting.

Example: Driver 1 is to increase revenue and is far more important, than Driver 2, to increase customer satisfaction, and Driver 3, to decrease costs. If everyone agrees that the weighting is 50%, 35% and 15%, then the portfolio of projects is analyzed to see that the number of projects and their costs reflect this weighting.

Once the strategic drivers and their significance are established, a quarterly review can be conducted to maintain the correct proportions.

1. Portfolio Inventory – Collect all projects in a single repository, identifi ed with standard data attributes
2. Assess all project characteristics which contribute to the strategic objectives
3. Prioritize projects on various criteria, including cost, duration, etc.
4. Assess risk and dependency
5. Apply constraints, e.g., budget, resources, time
6. Optimize – analyze what projects contribute the most in conjunction with the organization’s capabilities

Gain Visibility – What do we have and what are we doing?
Insight into the entire project and program inventory, with standardized data for all new project requests and ongoing projects.

Select Right Projects – Projects are objectively reviewed and scored via
• contribution to strategic objectives;
• assessment of business cases;
• aggregate levels of risk,
• financial and non-fi nancial benefits.

Stop Low-value Investments – By employing an objective methodology when prioritizing and optimizing the portfolio, the organization can address the diffi cult task of stopping low-value or underperforming initiatives and then reallocating resources to high-value new investments.

Improve ROI – Establish the capabilities to align investments with various constraints such as budget and resource capacity.

Realize Strategy and Goals – Your department will gain confi dence in its spending, because investments are now objectively measured and prioritized and will maximize strategic return.

Business Services Can Help
• Guide your department throughout the project using the tools and processes that help achieve success.
• Mediate and guide strategic driver meetings and discussions, using proven tools and methods that support the establishment of common goals.
• Provide a project manager resource to work with your department to coordinate the integration and alignment of departmental projects and objectives with the University as a whole.

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