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MoP Portfolio Definition Cycle


The Portfolio Definition cycle covers 5 sequential practices:

  1. Understand: Portfolio Definition must start with the Understand practice – it is essential to get a clear and transparent view of what is in the current portfolio and the project development pipeline as well as performance to date and, looking forward, the forecast costs, benefits and risks to delivery and benefits realization. MoP sets out the keys to success and explains how to go about each one.
  2. Categorize: once the Understand practice is complete the change initiatives (project and programmes) can be categorized so that senior decision makers can make decisions in areas like priority of resources and strategic alignment.  MoP gives several examples drawn from real life experience from different industries.
  3. Prioritize: this orders the projects and programmes – often along financial lines – and MoP gives examples of metrics that can be used such as NPV, IRR and Payback. “Money isn’t everything” however so MoP also describes multi-criteria analysis using factors such as “return on attractiveness” and the “risk or achievability” of each change initiative.
  4. Balance:  Prioritization results in a ranked list of change but the purpose of the balance practice is to make sure that the resulting portfolio is balanced in terms of time, coverage of strategic objectives, impact across the business, risk : return and available resources.  MoP provides an example of how Aston Martin, the luxury car manufacturer balanced its IT portfolio.
  5. Plan:  The final practice of the Definition cycle collates information to create a portfolio strategy and delivery plan which will be approved by the portfolio direction group/ investment committee.  Planning serves to provide the “clear line of sight” about what initiatives are included, their schedule and timing, resource requirements, risks and benefits to be realized.  MoP has a full appendix devoted to an outline of the contents of the portfolio strategy and delivery plan.