What is a Portfolio?
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Definition:
- A portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic business objectives.
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Strategic Goals:
- Long-term goals typically spanning three to five years.
- Example: A company like Toyota aiming to increase revenue by 50%.
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Components of a Portfolio:
- Programs:
- Large initiatives, like developing new car models.
- Projects:
- Smaller efforts, such as updating existing car models or creating new incentive programs.
- Programs:
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Portfolio Structure:
- The portfolio includes multiple programs and projects aligned with strategic goals.
- It manages the operations necessary to achieve these goals.
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Role of a Portfolio Manager:
- Works at the highest organizational level, often with the CEO or senior management.
- Develops and oversees the implementation of programs and projects to meet strategic objectives.
- In smaller businesses, the portfolio manager might be the CEO.
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Importance of Portfolio Management:
- Aligns all projects and programs with the organization's long-term goals.
- Ensures that all initiatives contribute to achieving the strategic objectives.
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Implementation:
- Portfolio managers are essential in medium to large organizations.
- They present plans and strategies to senior leadership to achieve the defined goals.
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