Portfolio Management Involves Managing Several

¶ … portfolio management involves managing several projects each with an aim of maximizing the profits for the organization as you keep the expenditure to the possible minimums. Many organizations have discovered the pros of managing their projects in relation to other departments of the organization instead of treating each project as an isolated unit. There is a growing interdependence of projects in many organizations and the treatment of project-by-project where the Net Profit Value (NPV) was looked into before picking out one project to pursue is dying out.

While the previous method considered the projects to be independent of each other and that the projects had not tight relationship or common factors with the other activities of the organization, the current trend assumes that each department is dependent on the other and that the progress of one department is a concern of the other. This gives the organization the impetus of moving ahead together as a whole unit making the achievement of the strategic goals easier and more coordinated (Tom Adams, 2001).

The other reason why there must be a link between the project portfolio management and the strategic goals of the organization is to enable the ease of allocation of funds to the various departments with a view of balancing all the departments and creating equality (Siemens Product Lifecycle Management Software Inc., 2011). This is based on the fact that all departments interact and are all affected by some factors like the performance targets, market fluctuations and the technical risks.

Even is there is explicit relationships and links between the departments, they still interact in the sense that investing too much on one department may suppress the performance of the other through deprivation of resources hence the appropriate inclusion of the project portfolio into the strategic planning like other departments will help balance the business requirements. Portfolio management can also be viewed as the bridge that connects the company's business strategy or vision and the projects collection that will see the vision into completion or fruition.

The corporate strategy and the measurements standards used to measure these strategies together with the long-term targets will form the base of this endeavor to accomplish the vision. For instance the results of the existing base of the company's business can be juxtaposed against the targeted metrics like net cash flow, earnings, reserves and production (Plan View Inc. 2011). All these are factors are significant in the achievement of the organizational strategic plans and goals.

SECTION II In the past, there had been the common trend of each department specializing in the thing that they do best; this meant that people engaged in repetitive traditional roles without the chance to venture into other departments of the organization. The projects portfolio was handled by a head that had the people who concentrated fully in projects implementation, the Human Resource department on the other concentrated on rewards like benefits, compensation and pensions, resourcing, organizational development and design, employee relations and development and learning.

However, over the years, many organizations have been continually undergoing alignment, which means integration of the decisions about the employees with the decisions about the results that the organization is striving to achieve. Jeff Sacht, (2010) points out the fact that many organizations have moved to the consultative partnering roles rather than the autonomous departmental confines.

This alignment has integrated almost all departments into the firms planning process, stressing on each departments engagements and activities that contribute to the wider mission and goal of the firm as well as make stronger the ties and relationships between the departments and the management, one of them being the projects portfolio management.

SECTION III Many firms have realized that it is not only the financial and technological capital that give them a competitive edge but the ability to seamlessly coordinate them into meeting the goals and the strategic plan of the organization. The inclusion of the project portfolio management into the strategic planning of the organization will benefit the department and the entire organization in that it will be easier to make decision with the consolidated information from the projects department to the top.