Long term business success requires much more than just ensuring wins on a project-by-project basis. Previously, Anand Jayapalan had spoken about how companies need to build a cohesive project portfolio to ensure long term growth and success. This portfolio should ideally feature complementary, high value projects that align with their business goals. However, such a portfolio does not come together without considerable effort and planning. In fact, to get started with it, one would need a comprehensive and focused portfolio plan.

What is portfolio planning?

When it comes to businesses, portfolio planning largely implies to the process that helps determine which projects the company must take on. It is a vital aspect of project portfolio management (PPM), and often acts as a bridge between high level strategic planning that sets the direction of the entire company and project-level planning. An efficient portfolio plan allows business leaders to assess risk across multiple ongoing projects while making sure that each project contributes to their strategic objectives and does not strain their available resources beyond their breaking point.

A version of portfolio strategy is also widely used in the financial industry when putting together a group of investments. However, it is imperative to know that planning a project portfolio is a unique discipline, which requires specific practices and perspectives.

The benefits of portfolio planning

Companies belonging to varied industries, right from transportation and construction to oil and gas, can benefit from a smartly devised project portfolio plan. Here are a few ways this process can help a company to become more successful:

• A complementary portfolio: Portfolio planning is quite a thoughtful process that leads to projects that complement each other and help reach the organizational goals.
• More valuable projects: Proper portfolio planning helps business leads to identify projects that can deliver maximum value to a company and have high positive impact.
• Alignment with organizational goals: If the project portfolio of a company is not planned and strategized in advance, there is a good chance that the projects ultimately pursued by the company will not make meaningful contributions towards meeting its strategic goals. These goals can range from certain financial objectives, to catering to environmental, social and governance (ESG) issues. By carefully selecting and prioritizing projects that directly contribute to the organization’s goals, businesses can ensure that their resources, time, and efforts are focused on initiatives that bring maximum value.
• Risk management and mitigation: A well-structured project portfolio includes risk assessment and mitigation strategies. Businesses can identify potential risks associated with individual projects and implement measures to mitigate these risks at the portfolio level. This proactive approach minimizes the impact of unforeseen challenges, enhances decision-making, and increases the likelihood of project success.
• Improved operational efficiency: A robust project portfolio process provides business leaders with a bird’s-eye view of where the capital and resources of a company are allocated. It allows for more effective tracking against baselines and identification of opportunities for improving business efficiency.

Earlier, Anand Jayapalan had spoken about how project portfolio planning facilitates informed decision-making at both the project and organizational levels, hence can competently contribute to long term business success.