Portfolio management is the process of managing a collection of projects or investments in order to achieve specific objectives. It involves making decisions about which projects to pursue, allocating resources, and monitoring progress. One approach to portfolio management is managing the portfolio by exception, which involves setting clear criteria for success and only intervening when those criteria are not met.
I remember a time when I was managing a portfolio without exception management. It was a challenging experience, as I found myself constantly overwhelmed with the day-to-day tasks of monitoring each project and making decisions. Without clear criteria for success, I often found myself unsure of when to intervene or how to prioritize my time and resources. This led to inefficiencies and missed opportunities, and ultimately hindered the overall success of the portfolio.
Key Takeaways
- Managing the portfolio by exception involves focusing on the most critical projects and making decisions based on exceptions rather than routine updates.
- Portfolio management involves selecting and prioritizing projects to achieve strategic goals and objectives.
- Managing the portfolio by exception is important because it allows for efficient use of resources and ensures that projects align with strategic objectives.
- The benefits of managing the portfolio by exception include improved decision-making, increased transparency, and better risk management.
- Exception management plays a crucial role in portfolio management by identifying and addressing issues that could impact project success.
The Concept of Portfolio Management
A portfolio is a collection of projects or investments that are managed together in order to achieve specific objectives. Portfolio management involves making decisions about which projects to pursue, allocating resources, and monitoring progress. It is a strategic approach that allows organizations to optimize their investments and achieve their goals.
When I first started implementing portfolio management in my organization, I was amazed at the benefits it brought. By managing projects as a portfolio, we were able to align our investments with our strategic objectives and make more informed decisions about resource allocation. We were also able to identify and prioritize high-value projects, which helped us maximize our return on investment. Overall, portfolio management allowed us to be more strategic and efficient in our project management efforts.
The Importance of Managing the Portfolio by Exception
Managing the portfolio by exception is crucial for effective portfolio management. Exception management involves setting clear criteria for success and only intervening when those criteria are not met. This approach allows portfolio managers to focus their time and resources on projects that require attention, rather than getting bogged down in day-to-day tasks.
I learned the importance of managing the portfolio by exception the hard way. Without clear criteria for success, I found myself constantly overwhelmed with the day-to-day tasks of monitoring each project and making decisions. This not only hindered my ability to effectively manage the portfolio, but it also led to inefficiencies and missed opportunities. By implementing exception management, I was able to set clear expectations for success and prioritize my time and resources accordingly.
The Benefits of Managing the Portfolio by Exception
Managing the portfolio by exception offers several benefits. First and foremost, it allows portfolio managers to focus their time and resources on projects that require attention. By setting clear criteria for success, managers can quickly identify which projects are not meeting expectations and intervene accordingly. This helps to ensure that resources are allocated effectively and that projects stay on track.
In addition, managing the portfolio by exception allows for more efficient decision-making. By setting clear criteria for success, managers can make more informed decisions about resource allocation and project prioritization. This helps to maximize the return on investment and ensure that projects are aligned with strategic objectives.
Personally, I have experienced the positive outcomes of managing the portfolio by exception. By setting clear criteria for success and only intervening when necessary, I was able to focus my time and resources on projects that required attention. This allowed me to be more strategic in my decision-making and ultimately led to better outcomes for the portfolio.
The Role of Exception Management in Portfolio Management
Exception management plays a crucial role in portfolio management. It involves setting clear criteria for success and only intervening when those criteria are not met. This approach allows portfolio managers to focus their time and resources on projects that require attention, rather than getting bogged down in day-to-day tasks.
Exception management helps to ensure that resources are allocated effectively and that projects stay on track. By setting clear expectations for success, managers can quickly identify which projects are not meeting expectations and intervene accordingly. This helps to minimize risks and ensure that projects are aligned with strategic objectives.
Personally, I have seen the impact of exception management on portfolio success. By setting clear criteria for success and only intervening when necessary, I was able to focus my time and resources on projects that required attention. This allowed me to be more strategic in my decision-making and ultimately led to better outcomes for the portfolio.
The Process of Managing the Portfolio by Exception
Managing the portfolio by exception involves a systematic process. First, clear criteria for success must be established. These criteria should be specific, measurable, achievable, relevant, and time-bound (SMART). Once the criteria are established, regular monitoring and reporting should be conducted to track progress against these criteria.
When a project does not meet the established criteria for success, intervention is required. This may involve reallocating resources, adjusting timelines, or making other changes to ensure that the project stays on track. It is important to have a clear process in place for making these interventions and to communicate these changes to stakeholders.
Implementing the process of managing the portfolio by exception can be challenging, but it is well worth the effort. By setting clear criteria for success and only intervening when necessary, portfolio managers can focus their time and resources on projects that require attention. This helps to ensure that resources are allocated effectively and that projects stay on track.
Tools and Techniques for Managing the Portfolio by Exception
There are several tools and techniques that can be used to manage the portfolio by exception. One such tool is a dashboard or scorecard that provides a visual representation of project performance against established criteria for success. This allows portfolio managers to quickly identify which projects are not meeting expectations and intervene accordingly.
Another tool is a risk register, which helps to identify potential risks and develop strategies for mitigating them. By proactively identifying risks and developing contingency plans, portfolio managers can minimize the impact of these risks on project success.
In addition, regular reporting and communication are essential for managing the portfolio by exception. By regularly communicating progress and changes to stakeholders, portfolio managers can ensure that everyone is aligned and informed.
Personally, I have used these tools and techniques to manage the portfolio by exception. By using a dashboard to track project performance and a risk register to identify potential risks, I was able to quickly identify which projects required attention and intervene accordingly. Regular reporting and communication also helped to keep stakeholders informed and aligned.
Challenges in Managing the Portfolio by Exception
Managing the portfolio by exception is not without its challenges. One challenge is establishing clear criteria for success. It can be difficult to define what success looks like for each project and to establish specific, measurable, achievable, relevant, and time-bound (SMART) criteria. However, taking the time to clearly define these criteria is crucial for effective exception management.
Another challenge is ensuring that interventions are made in a timely manner. It can be easy to overlook or delay interventions, especially when resources are limited or other priorities arise. However, delaying interventions can lead to missed opportunities or project failure.
Overcoming these challenges requires a proactive approach. It is important to take the time to clearly define criteria for success and establish a process for making interventions. Regular monitoring and reporting can help to ensure that projects stay on track and that interventions are made in a timely manner.
Best Practices for Managing the Portfolio by Exception
There are several best practices for managing the portfolio by exception. First and foremost, it is important to establish clear criteria for success. These criteria should be specific, measurable, achievable, relevant, and time-bound (SMART). Taking the time to clearly define these criteria will help to ensure that projects stay on track and that interventions are made in a timely manner.
Regular monitoring and reporting are also essential for managing the portfolio by exception. By regularly tracking progress against established criteria for success, portfolio managers can quickly identify which projects require attention and intervene accordingly. Regular reporting and communication also help to keep stakeholders informed and aligned.
In addition, it is important to have a clear process in place for making interventions. This process should outline who is responsible for making interventions, how interventions should be made, and how changes should be communicated to stakeholders. Having a clear process in place helps to ensure that interventions are made in a timely manner and that everyone is aligned and informed.
Personally, I have implemented these best practices for managing the portfolio by exception. By establishing clear criteria for success, regularly monitoring progress, and having a clear process in place for making interventions, I was able to effectively manage the portfolio and achieve positive outcomes.
Conclusion and Future Outlook for Managing the Portfolio by Exception
In conclusion, managing the portfolio by exception is a crucial aspect of portfolio management. It involves setting clear criteria for success and only intervening when those criteria are not met. This approach allows portfolio managers to focus their time and resources on projects that require attention, rather than getting bogged down in day-to-day tasks.
The future outlook for managing the portfolio by exception is promising. As organizations continue to recognize the benefits of portfolio management, there will be an increased focus on managing the portfolio by exception. By implementing clear criteria for success and establishing a process for making interventions, organizations can optimize their investments and achieve their goals.
I encourage organizations to implement exception management in their portfolio management efforts. By setting clear criteria for success and only intervening when necessary, organizations can maximize their return on investment and ensure that projects are aligned with strategic objectives.