Is there a difference between portfolio management for internal initiatives and external initiatives? After all, they are all just the same, right?
The main challenge in handling work for most organizations is resource management. There always seem to be more work to do than there are people. For internal initiatives, this means that not everything that has a positive payback time can be started. For customer assignments, the challenge is in finding the suitable talent for each individual customer initiative.
The key to success when handling internal development portfolios lies in being decisive in which work should be started and which should not. Internal initiatives are easily started without a scope and without a clear understanding of what has been excluded. The key in making success of the initiatives is minimizing the number of open work and focusing on ending and deploying end results instead of having many open initiatives at the same time.
For a portfolio with customer work, the dynamic is a little different. For these portfolios, the guiding topic is optimizing the revenue from one month to the next based on open assignments. Now, starting the initiative and the scope of the work are not as much in the hands of the company itself but created based on the requirements from the customer. Handling of customer assignments becomes more of a continuous operation or process.
In these customer portfolios, the key is to make sure that the assignments are divided up into meaningful packages of work with a clear delivery goal. The work can then be resourced correctly, so that all work is delivered with appropriate quality and can be billed, so that the customer is satisfied.
In these customer portfolios, the value of the work is ambiguous and subjective to the evaluation of the person paying the bills. It could be that everything is delivered as in the contract, but for some reason the customer is not happy. Alternatively, it can be that the budget doubles due to changes and the customer is still very happy.
Probably the hardest combination of both is organizing the internal portfolio of a customer work organization in which there is often no resourcing for the internal development. This leads to situations in which the brightest minds in the organization are always fully booked on customer assignments.
It can be clearly seen that there is quite a different dynamic going on in the portfolio management depending on whether the portfolio is for internal or external initiatives.
Author: Kati Lehmuskoski