Introduction
An organisation’s vision which includes the various environmental factors that influence the functioning of the organisation, provides definite paths for growth and development, which are critical for achieving the mission of a globalised organisation. Portfolio management is used to determine the ideal sequence of projects to be carried out to achieve the organisation’s mission. Project Management Institute (2013) states that the portfolio performance management is the systematic planning, measurement, and monitoring of the portfolio’s organisational value through achievement of the organisational objectives. It is widely accepted among various organisations, that the portfolio performance …show more content…
At the same time, a portfolio performance management plan also defines how various resources of the enterprise are optimally allocated to gain maximum values from various tasks to be carried out as part of the portfolio. Since the portfolio performance management plan is an ancillary component of the portfolio management plan, the outputs of this process would be updates to the portfolio management plan and to the portfolio process assets. With the portfolio management plan, portfolio process assets, organisational process assets, and the enterprise environmental factors as inputs, the portfolio manager uses elicitation techniques, portfolio management information systems, and capability and capacity analysis to formulate the portfolio performance management plan (Project Management Institute, …show more content…
Without a credible measure of the portfolio measure, the portfolio manager will lack sufficient data to take necessary measures in allocating resources, managing the project, and effectively meeting the objectives of the organisation. The performance of a project portfolio management can be examined by estimating the degree to which the portfolio has successfully fulfilled the objectives of strategic alignment and has maximised the value of the portfolio (Müller, Martinsuo, and Blomquist, 2008). A critical aspect of measuring portfolio performance is the definition of the kind of measures to be used for different cases, since all types of measures may not be suitable to all scenarios. In general, four types of measures are employed to estimate the performance of the portfolio – qualitative, quantitative, tangible, and intangible. Whilst examples of quantitative analysis include change in net present value (NPV), return on investment (ROI), and internal rate of return (IRR); examples of qualitative and intangible measure include degree of strategic alignment, recognition of regulatory compliance, and corporate responsibility (Bacon,