Defining Portfolio Strategy
Portfolio Management is about "doing the right things". Portfolio strategy defines what is the right thing.
- It describes the business value that a portfolio is aimed to achieve.
- It provides the business context for making decisions of what to invest on.
- It is embodied in itemized, differentiated, and measurable business goals.
This section explains how to define a portfolio strategy, add and track business goals of the strategy.
Strategic themes are the pillars that support the portfolio strategy. They are the main, high-level strategic focus areas of your organization. Strategic themes connect the evolving enterprise business strategy to the portfolio vision which is then inherited by the portfolio contents.
Example: Some examples of strategic themes are:
- Improve customers satisfaction.
- Reduce operational costs.
- Innovate in service delivery.
Note: The term "Strategic Themes" may have a different name in your organization, for example "Business Outcomes". That's because PPM System Administrator might rename “Strategic Themes” by updating the validation "PFM - Strategic Themes Labels". Changes will take effect on every PPM menu and label.
To define strategic themes for a portfolio:
- Prerequisite: your administrator has not disabled using strategic themes by setting the parameter
false(it is enabled by default)
- Open the portfolio Strategy tab.
In the Strategic Themes section, select which type of strategic themes you want your portfolio to carry on.
Option Description Global Strategic Themes
This option lists the strategic themes that can be shared by all the portfolios in the system.
You select this option if your portfolio is aimed to achieve the same themes as globally set.
For details about how to manage global strategic themes, see Managing Global Strategic Themes.
Parent Portfolio Strategic Themes
Only available when your portfolio has a parent portfolio.
This option lists the strategic themes that are currently used by the parent portfolio.
Portfolio Strategic Themes
This option allows you to create strategic themes that are specific to your portfolio.
To create strategic themes specific for your portfolio:
- Click Add.
- Provide the name, status, owner, and description for the theme.
- Click Add.
- To adjust the default ranking of a theme, drag and drop it to the desired row.
Click this icon to display pie charts with the forecast cost and resources demand distribution per strategic theme. Show closed Strategic Themes Check this option to show closed strategic themes.
What do portfolio strategic themes do to portfolio contents?
Programs (including its contents), projects, proposals, and assets included in the portfolio have the field Strategic Theme present in the request details page > Strategy section.
The field lists the active strategic themes the portfolio uses, be they global strategic themes, strategic themes currently used by its parent portfolio, or strategic themes created by itself.
- One and only one active strategic them can be selected to link to the portfolio contents.
Business goals are actionable and measurable items to actualize the portfolio strategic themes. They are measured and evaluated against KPIs. You can add up to 50 business goals to a portfolio.
For example, a portfolio's strategy is to improve customers satisfaction. It may have the following business goals:
- Solve all customer inquiries within 24 hours.
- Decrease critical defects by 30%.
- In the portfolio Strategy tab > Business Goals section, click Add.
In the Add Business Goal page, complete the business goal general information.
Field (*Required) Description *Name
What the business goal is intended to achieve.
Rank Not editable when you add a business goal. See Ranking Business Goals. *Status
Newly created business goal are in Not Started status by default. Change the status according to the business goal's performance against its KPI.
- Not Started: business goals that are not ready to be tracked
- On Track: business goals that are continuously approaching the targets
- At Risk: business goals that are possible to miss the targets
- Achieved: the target value is achieved by the target date
- Missed: the target value is not achieved by the target date
- Abandoned: business goals that are not in use
Users that are responsible for the business goal. Owners could be managers of any portfolio.
- It can be composed of target value (aim at xxx) and target date (by xxx). Represent a goal to be reached before the end of the date.
It can be an optimized target. Optimized target does not require a fixed value or a fixed date.
If the business goal is aimed for a higher value (for example, revenue), its target is the higher the better. If the business goal is aimed for a lower value (for example, cost), its target is the lower the better.
Start Date When to start tracking the business goal. Description More detailed information about the business goal.
You must relate the business goal to a KPI to evaluate the business goal.
You relate one business goal with one KPI only. The KPI can be a shared KPI that is available for use for all portfolio business goals, or a private KPI that is available for use for one business goal only.
Relate the business goal to an existing shared KPI
In the KPI section, click in the Shared KPI Name field. All active and draft shared KPIs are displayed.
Select one in the list, and click Relate.
If you know the KPI name, type a string in the KPI Name field to filter the ones that contain the string.
If you want to know KPI details, click View all shared KPIs. In the Select a Shared KPI to Relate window, select one KPI and click Relate.
Relate the business goal to a new shared KPI
If none of the existing shared KPIs fits, try adding a new shared KPI and relating the business goal to it.
- Next to the Relate button or in the Select a Shared KPI to Relate window, click the Create a new shared KPI link.
In the Add Shared KPI window, complete the shared KPI information. For details, see Managing KPIs.
- Click Add & Relate to add and relate the new shared KPI.
Relate the business goal to a private KPI
If you want to relate the business goal with a KPI that is for the business goal use only:
- Next to the Relate button, click the Create a new private KPI link.
Complete the private KPI information. For details, see Adding a Private KPI.
- In the Add Business Goal page, click Add to add the business goal with the private KPI related.
Note: We recommend you relate the business goal to an active KPI, as draft KPIs may not be automatically or manually updated regularly.Want to relate an existing business goal to a different KPI?
What do business goals' related KPIs do to portfolio contents?
- If you relate an existing business goal to its private KPI, you cannot relate it to another KPI.
If you relate an existing business goal to a shared KPI, you can relate it to another shared KPI, but cannot switch to using a private KPI.
- In the KPI section of the business goal, click the edit icon.
- In the Select a Shared KPI to Relate window, select another KPI and click Relate.
- These KPIs are present in the Strategy section of the portfolio contents' details pages.
- Portfolio content managers can enter impact values for these KPIs (by predicting how much their proposals, projects, assets, or programs would contribute to the KPIs).
- Click Add to add the business goal or Add & Another to continue adding another.
After you add a business goal, it is by default given the lowest rank (with the biggest rank value). If you find the Rank column empty, click the column header to apply default rankings.
To change the rank of a business goal:
- In the business goals list, click the business goal.
- Drag and drop it to a desired location in the list.
A business goal's performance is measured based on the actual values of its related KPI.
To view a business goal's performance:
In the business goals section of the Strategy tab, Click to switch to the chart view, or
Click the business goal link to open the business goal details.
By default, the KPI section of the business goal show the last 10 KPI actual values. To show more history values, use the Past xxx days drop-down list.
If the business goal has a fixed target value
The KPI section of the business goal displays both the target value and KPI actual values.
You can see whether the KPI line is approaching or lagging behind the target line.
Putting your mouse over a knot in the KPI line, you know the exact KPI actual value on a specific date.
If the business goal is aimed for an optimized target
The KPI section displays KPI actual values only.
You can see whether the KPI line is going in the same direction as the KPI's optimization direction.