Purpose: to ensure that the organization has the right mix of programs, projects, products, and services to execute the organization’s strategy within its funding and resource constraints

Portfolio: a collection of assets into which an organization chooses to invest its resources in order to receive the best return

Allocate, deploy, manage resources

Portfolio types:

• Product and service portfolio: complete set of products and services, shows commitments and investments, represents contractual commitments, new development, improvement
• Program and project portfolio: manage and coordinate projects (objectives met, cost constraints maintained, no duplication, stay within scope, resources available)
• Customer portfolio: reflects commitment to service customer groups and market spaces; ensures relationship between business outcomes , customers, and services is well understood; may influence product and service portfolio or the program and project portfolio

Other portfolios can exist anywhere in the organization, it’s about managing resources. Purpose is to achieve optimal return on investment from assets

Tightly related to service financial management (fiscal oversight)

1. Portfolios enable ROI

2. Practice success factors (PSF)

Two PSFs for SFM:

• Ensuring sound investment decisions for programs, projects, products, and services within the organization's resource constraints
• Ensuring the continual monitoring, review, and optimization of the organization's portfolios

2.1 Sound investment decisions

To avoid conflicting priorities and ensure transparency:

• Portfolios ensure stakeholder perspectives are included and prioritized; important initiatives are resourced before other initiatives are addressed
• Crucial for strategic alignment, strategy management provides the criteria so to achieve organizational objectives
• Criteria should be transparent and consistent: PM provides feedback to SFM, StM, RM where those practice initiatives included/used in decision making

Portfolios are communication tools for stakeholders:

• Should have a portfolio owner ensuring accurate, up-to-date information: owner reviews, prioritizes, updates portfolio regularly)
• Use four dimensions to understand organizational resources

Continuous prioritization and reprioritization

2.2 Continual monitoring, review, optimization

Not enough to just identify the next promising investment: monitor to ensure expected value achieved (fail to deliver or delivers but no longer aligned with organizational strategy)

Regularly review:

• Ensure proper distribution of resources or investments in new opportunities
• Use a defined set of criteria to track, assess, and validate the value realization of a portfolio item (function, fiscal, performance, image, reputation, moral, customer satisfaction…)
• Use a template so a comparison across portfolio items can be made

Investment health reports:

• Results in optimization of portfolios – consider underperforming items, exceptions
• Intervene based on strategic impact: actions include increasing the investment, retire a service

Go back to ITIL 4 Strategic Leader Certification Course: Practices to finish this chapter or to the main page ITIL 4 Strategic Leader Certification Course.