Managing the Change Portfolio
Quite simply a Change Portfolio is a business’s To-Do list. It contains the list of changes, often called programmes or projects, that need to be done, and most often they are listed according to priority. As you can imagine any business has a To-Do list that far exceeds its capacity and capability to deliver change, and this is what makes the Change Portfolio so important. Typically, only the items on the top of the Change Portfolio will receive attention, therefore it’s important to manage the Change Portfolio appropriately.
Understanding the Change PortfolioAsk each manager within a business what he or she thinks the most important project is, and it is very likely that they will each give you a different answer. Depending on the manager, they likely have different responsibilities, different priorities, and different agendas. Each will take their most important project to the boardroom and want it approved. How does senior management choose?
Each project requested needs to be analysed and understood. What are the real benefits and true costs of implementing each project? But more importantly, how does this project support the strategic directions of the organisation. Ultimately the business has goals and targets it is aiming to achieve, a strategic direction, and only those projects that support the achievement of these will get the go ahead.
Prioritising the Change PortfolioWith so many competing priorities it is difficult to compare projects to each other. What may make a huge difference in one area may have little impact in another, and how do you weigh up benefits to one group over another? Again, this is where the overall corporate objectives can help. These provide direction for what is important to the business, and all projects embarked on should support the strategic goals. External factors can also influence the priority, such as compulsory regulations.
Typically all Projects on the Portfolio will be given a ranking to help place them against each other. This ranking should be based on both the importance of the project (the benefits that it will bring the business) and the support that it gives to the strategic business goals. It is not a simple task to rank projects and it is often something that senior management wants to be involved in.
Managing the Change PortfolioOnce all programmes and projects have been ranked, the business has a Change Portfolio. This is the business’s To-Do list of what they would like to do; not necessarily what they will get done. The cost of this total Change Portfolio needs to be considered against the funds available, and this will ultimately determine how many projects from the Portfolio will be embarked upon.
Just as the business strategic goals will change so to will the Change Portfolio. Priorities will change and programmes and projects will move up and down the portfolio according to business need. Some projects may have little relevant to the strategic goals, but jump to the top of the list of other factors, such as government regulations.