How do you treat those big projects? Do you treat them as solid investments that will add value to your business or as disposable adventures where you can afford to take some hits. In order to see important projects taken to its successful conclusion, it is important to undertake them with the same level of assurance with which you would treat your “actual” business investments. Portfolio assurance is often concerned with addressing strategic risks when it comes to the execution of those big projects where failure is not an option.
There are company projects that cost significant investments and make a significant impact on the business. The portfolio assurance service will generally focus on the risks, such as timely delivery of the project deliverables, the project costs, performance, benefits and other important variables. The assurance process will also focus on how potential project benefits can be maximized so that the business or organization investing in the project can reap maximum ROI.
Other aspects to be looked at when it comes to portfolio assurance include identifying new opportunities, which can be exploited during project execution. Some opportunities can be missed as a result of changes in circumstances, both internal and external. Through PMO project assurance, you will be able to assess both the project’s strategic fit and also address some of its strategic risks.
Here is how you can differentiate the strategic risk from the strategic fit of your project. For example, the strategic objective of a particular project might be to enter a new market rapidly and you may choose to do this by growing organically based on outsourced or expat talent. In this case, you have the right strategic fit for the project that you are planning to execute. While the strategic fit for the project might make good business sense, the strategic risks of the project approach could be high and the expansion could in the end distract you from your core home market, which accounts for your core business and revenues.
When it comes to portfolio assurance, it is important to evaluate whether the portfolio has been optimized in a way that it will be able to meet or even surpass the strategic objectives of any particular project. It must also balance project risks, resources, and the change capabilities for transition, intervention and other variables.
While risk is a priority criterion, it is just one of the criteria to be considered when it comes to project review and assurance. At the same time, focusing too much on the risks rather than the opportunities could be considered too inward-looking. When it comes to project assurance, it is therefore important to adopt an opportunity-based approach.
When you go for the opportunity based approach to assurance, you will be looking for the bigger bang for your buck, hoping to leverage what you have so you can get as much as possible from the project. Most portfolio management services will recommend that you have a balanced portfolio which contains both low-risk low return projects, as well as high risk high return ones.
Exploiting the opportunities will enable you to better achieve or even surpass your objectives. On the other hand, minimizing risks enables you to avoid “project creep” that occurs due to failure arising from speculative high-risk activities.