PRINCE2 Portfolio Management Framework, Certifications and Trainings

PRINCE2® Portfolio Management (formerly Management of Portfolios - MoP®) supports senior executives and decision-makers in understanding how portfolio management can maximize return on investment, while they start and sustain transformation. PRINCE2 Portfolio Management comprises of principles, techniques, and practices which assist organizations in the successful adoption of portfolio management.

PRINCE2 Portfolio Management is focused on the change delivered by project and programme management as a whole, rather than the work of individual initiatives. It is closely aligned with PRINCE2 Project Management and PRINCE2 Programme Management frameworks.

The Context and History of PRINCE2 Portfolio Management

Back in 2009-10, reports from the UK government’s capability reviews, as well as from the National Audit Office, had highlighted the importance of improved prioritization of investment in change. The challenge of ensuring successful delivery and realizing the full benefits was not only a public sector issue, realizing efficiency savings and contribution to strategic objectives, are of relevance across all sectors of the economy and in all jurisdictions.

This is where portfolio management plays a critical role in facilitating organizational survival and growth – by better coordinating investment in programmes and projects, improving the management of risk, encouraging collaborative working and by providing accurate, timely information that enhances management decision-making. By correctly applying Portfolio Management organizations are able to:

• Invest in the ‘right’ programmes and projects in the context of the current environmental conditions and the organization’s strategic objectives.
• Ensure successful delivery in terms of time, quality, budget and, most significantly, benefits realization.

The Management of Portfolio (MoP) guide had been prepared to provide practitioners with the grounding to apply portfolio management within a wide variety of organizations. As such it encompasses consideration of the principles upon which effective portfolio management is based; the key practices, including examples of how they have been applied in real-life situations; and guidance on how to implement portfolio management and sustain progress.

The first MoP guide was published in 2010 and was primarily aimed at senior executives and decision makers. The current version of MoP Guide published in 2011 has since become a widely accepted guidance for implementing Portfolio Management within public and private sectors successfully and is aimed at:

• Members of Management Boards and Directors of Change
• Senior Responsible Owners (SROs)
• Portfolio, Programme, Project, Business Change and Benefits managers
• Business case writers and project appraisers

Portfolio and Portfolio Management

• PRINCE2 Portfolio Management defines a portfolio as:
  • An organisation’s portfolio is the totality of its investment (or segment thereof) in the changes required to achieve its strategic objectives.
• PRINCE2 Portfolio Management identifies portfolio management as:
  • Portfolio management is a coordinated collection of strategic processes and decisions that together enable the most effective balance of organizational change and BAU.

Portfolio Management and Business As Usual (BAU)

• Portfolio management controls major changes to BAU (day-to-day, tactical improvements can be delivered via the performance management system).
• The cyclical relationship between portfolio management and BAU can help achieve the organization’s strategic objectives.

Portfolio Management and Programme/ Project Management

• Programme and project management (PPM) are mechanisms for delivering change.
• Portfolio management encompasses:
  • The development of delivery capability organisation-wide, via fit for purpose standards, processes, and staff development
  • The management of limited resources and ensuring that where there is any shortage resources are assigned to the highest priority initiatives and/ or effective action is taken to increase the supply of these resources.
  • Overall risk management, including over-reliance on a single supplier and the risk of cost escalation and benefits shortfalls.
  • Dependency management, ensuring that key dependencies are effectively managed across the portfolio.

The Management of Portfolios (MoP) Handbook

• The MoP® Study Guide (2011 Edition)
  • Defines full content of PRINCE2 Portfolio Management
  • Is definitive source for all PRINCE2 Portfolio Management exams
  • Supports training and exams
  • Can be used only in Practitioner exam (open book exam)
• Structure of the handbook:
  • 7 Chapters
  • 6 Appendix
  • 144 Pages

5 PRINCE2 Portfolio Management PRINCIPLES for Effective Portfolio Management

1. Principle-1: Senior Management Commitment
2. Principle-2: Governance Alignment
3. Principle-3: Strategy Alignment
4. Principle-4: Portfolio Office
5. Principle-5: Energized Change Culture

The Portfolio Definition Cycle

The porftfolio definition cycle (as per PRINCE2 Portfolio Management) consists of following five steps:

1. Understand
2. Categorize
3. Prioritize
4. Balance
5. Plan

The Portfolio Delivery Cycle

The porftfolio definition cycle (as per PRINCE2 Portfolio Management) consists of following continuous management areas:

1. Management Control
2. Banafits Management
3. Financial Management
4. Risk Management
5. Stakeholder Management
6. Organizational Governance
7. Resource Management

Why Portfolio Management?

1. Portfolio management objectives are as following:
   1. The change initiatives that are being delivered (and in pipeline) represent the optimum allocation of resources in the context of organization’s strategic objectives, available resources and risk of achievability.
   2. The portfolio is sufficient to achieve the desired contribution to strategic objectives.
   3. All initiatives are necessary to achieve the desired contribution to strategic objectives.
   4. The selected change initiatives are delivered effectively and cost-efficiently. All the potential benefits are realized.

Benefits of Portfolio Management?

1. Benefits of portfolio management are as following:
   More of the right programmes and projects being undertaken in terms of:
   • Greater financial benefits and measurable contribution to the strategic objectives.
   • Removal of redundant and duplicate programmes and projects.
   • More effective implementation of programmes and projects via management of the project development pipeline, dependencies and constraints (including resources, skills, infrastructure, change appetite etc.) and redirecting the resources when programmes and projects do not deliver or are no longer making a sufficient strategic contribution.
   • More efficient resource utilisation.
   • Greater benefits realization via active approaches to exploitation of the capacity and capability created across the organisation and capturing disseminating lessons learned.
   • Enhanced transparency, accountability and corporate governance.
   • Improve engagement and communication between relevant stakeholders, including senior managers, in understanding and meeting organizational needs and expectations and in communicating strategic objectives (and the means by which they will be achieved) to all those involved.

PRINCE2 Portfolio Management Trainings and Certifications

PRINCE2 Portfolio Management certification trainings are provided by PeopleCert's Accredited Training Organizations (ATOs) across the globe. Tecknologia is also a PeopleCert Accredited Training Organization (ATO) offering PRINCE2 Portfolio Management certification trainings across the globe and in various formats.

Click on the links for certification levels to explore the pre-requisites, exams and other details.

Frequently Asked Questions (FAQ) About PRINCE2 Portfolio Management