What is Portfolio Management? (And Why You Need It)

Portfolio management is different from project management in that it encompasses the entire lifecycle – from ideation through the realization of the benefits it set out to provide. Portfolio management includes project management as a phase of the project lifecycle which focuses on, and is best at, the execution phase of a project. But as we all know, projects are more than just tasks and issue solving. Projects truly begin at the ideation stage and although some do not make it through execution to the realization of benefits of the investment, portfolio management accounts for that entire process.

Let’s take a look at the lifecycle of a project that is reflected in portfolio management: Ideation stage, creating a business case, prioritization of the initiatives that warrant investment, selection, planning the process and resources to carry out the initiative, execution of the initiative, and ultimately ROI. For each stage, there is a process, and IT leaders understand that while some projects are inevitable, others are strategic. And the strategic ones are the ones that make the difference.

Portfolio management is important in business because there are factors to consider that affect the success of the project, and thus the organization, as well as unexpected benefits from the investment. For example, sometimes it is what a Project Management Office (PMO) chooses not to do that is the most important. By prioritizing and consciously choosing not to undertake projects that do not benefit the business or take away from time and resource capacity from higher priority projects, PMOs become more efficient and are better able to focus on the projects that matter. This focus results in better and faster execution or project management.  

Many projects also begin by supporting overall business goals and for one reason or another, by the end they no longer serve that value. Either the business goals have changed, more important things have come up, new technology has come out that changes the project (this especially happens in product development projects), or the project has simply lost value because the main stakeholder is no longer a stakeholder. For any of these reasons or others, projects often change directions, and organizations need to adapt along the way. By managing projects as part of a portfolio, the dynamic changes because you enable the portfolio to be successful – even if some of the projects in it fall short – and help drive the desired outcome for your organization.

Here are a few benefits when moving to a portfolio management approach:

Strategic Alignment

Portfolio Management is an inherent way to strategically align your projects with the goals of the business. As you map out your portfolio and your resources that are to be assigned to certain projects, you make sure you they are the projects that support the needs of the business. However, we know this changes as you go along and you need to adapt. By managing a portfolio of projects, it becomes easier to identify the projects that are better suited to meet your needs, and reduce the investment or abandon projects that no longer serve the needs it intended to. In doing this, your business benefits from investing in projects that are the highest likelihood of added value and ROI.

Strategic alignment is especially strong in top-down portfolio management approaches. Top down is an “alignment-first” approach to portfolio management where requests are only accepted if they are aligned with business goals. Projects are prioritized and resources are assigned based on those prioritized projects, and executed from there. Essentially, planning and reporting are the critical elements where goals are identified and benefits are realized. Conversely, bottom up portfolio management puts the emphasis on the execution of projects, making sure tasks are executed, and thus increasing project success through individual contribution. In either case, by managing projects in a portfolio, you have the advantage of executing the right projects for the business.

Resource Management

Resources are an organization’s most valuable asset; and also the biggest challenge more often than not. Managing those resources in an effective, efficient, and optimized manner is extremely challenging. For most organizations, resource management is one of those things that may be done “well” but you always feel like it could be “better.” For better resource management, managing a portfolio is much easier to think about. You can see resources across the portfolio, utilization among various projects and across applications. By having a good understanding of what resources are actually up to and a realistic representation of what their utilization looks like, project resources becomes much more manageable from a portfolio perspective.

Planning and Reporting

We all want to know what we are getting out of our investments before we take the plunge. But there is always some degree of risk involved; if all projects were a sure thing, it would take the fun out of managing them. However, some level of predictability is comforting, and by having a systematic way of continuously improving the forecast of the projects with each new addition helps too. With portfolio management, planning for projects (and resources) is continuous and evolutionary as projects progress and people get shifted around. Reporting also plays a big role in this, as you are able to see the results of the plan after it is executed to adjust planning moving forward, and understand the benefits of the investment. Whether you are reporting on different metrics, gaining visibility, or arguing for more resources, having the ability to report on the portfolio as a whole as well as individual projects or programs is a major contributor to business success. According to recent Project Management Institute Pulse of the Profession report, organizations that are effective in portfolio management had 76% of projects meet or exceed expected ROI, compared with 56% of project success without portfolio management process in place. And success is what we are all about.

By including portfolio management as part of the project management approach, you can manage projects throughout their lifecycle, and against one another, to achieve benefits far beyond what you would get by managing projects in silos or in stages. For more on how portfolio management can give you end to end project management, take a look at our services portfolio management.

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Business Strategy: Definition, Levels, Components & Examples

Different businesses have different goals and take different routes to fulfil those goals. These routes constitute the business strategies of these businesses.

While it is easy to understand the definition of business strategy, sometimes it’s an uphill task to form and execute a successful one.

Here is an article to help you understand business strategy to fullest by answering your questions and clearing your doubts about everything related to it.

What Is Business Strategy?

A business strategy can be defined as the combination of all the decisions taken and actions performed by the business to accomplish business goals and to secure a competitive position in the market.

It is the backbone of the business as it is the roadmap which leads to the desired goals. Any fault in this roadmap can result in the business getting lost in the crowd of overwhelming competitors.

Importance Of Business Strategy

A business objective without a strategy is just a dream. It is no less than a gamble if you enter into the market without a well-planned strategy.

With the increase in the competition, the importance of business strategy is becoming apparent and there’s a huge increase in the types of business strategies used by the businesses. Here are five reasons why a strategy is necessary for your business.


Business strategy is a part of a business plan. While the business plan sets the goals and objectives, the strategy gives you a way to fulfil those goals. It is a plan to reach where you intend to.

Strengths & Weaknesses

Most of the times, you get to know about your real strengths and weaknesses while formulating a strategy. Moreover, it also helps you capitalise on what you’re good at and use that to overshadow your weaknesses (or eliminate them).

Efficiency & Effectiveness

When every step is planned, every resource is allocated, and everyone knows what is to be done, business activities become more efficient and effective automatically.

Competitive Advantage

A business strategy focuses on capitalising on the strengths of the business and using it as a competitive advantage to position the brand in a unique way. This gives an identity to business and makes it unique in the eyes of the customer.


It also decides the path to be followed and interim goals to be achieved. This makes it easy to control the activities and see if they are going as planned.

Business Strategy Vs Business Plan Vs Business Model

The business strategy is a part of the business plan which is a part of the big conceptual structure called the business model.

The Business Model is a conceptual structure that explains how the company operates, makes money, and how it intends to achieve its goals. The business plan defines those goals, and business strategies outline the roadmap of how to achieve them.

Levels Of Business Strategy

The business goal is achieved by the effective execution of different business strategies. While every employee, partner, and stakeholder of the company focus on fulfilling a single business objective, their activities are defined by various business strategies according to their level in the organisation.

Business strategies can be classified into three levels –

Level 1: The Corporate Level

The corporate level is the highest and most broad level of the business strategy. It is the business plan which sets the guidelines of what is to be achieved and how the business is expected to achieve it. It sets the mission, vision, and corporate objectives for everyone.

Level 2: The Business Unit Level

The business unit level is a unit specific strategy which differs for different units of the business. A unit can be different products or channels which have totally different operations. These units form strategies to differentiate themselves from the competitors using competitive strategies and to align their objectives with the overall business objective defined in the corporate level strategy.

Level 3: The Functional Level

The functional level strategies are set by different departments of the units. The departments include but are not limited to marketing, sales, operations, finance, CRM etc. These functional level strategies are limited to day to day actions and decisions needed to deliver unit level and corporate level strategies, maintaining relationships between different departments, and fulfilling functional goals.

Key Components Of A Business Strategy

While an objective is defined clearly in the business plan, the strategy answers all the whats, whys, whos, wheres, whens, & hows of the fulfilling that objective. Here are the key components of a business strategy.

Mission, Vision, & Business Objectives

The main focus of a business strategy is to fulfil the business objective. It gives the vision and direction to the business with clear instructions of what needs to be done, how it needs to be done, and who all are responsible for it.

Core Values

It also states the ‘musts’ and ‘must nots’ of the business which clarify most of the doubts and give a clear direction to the top level, units, as well as the departments.


A SWOT (strengths, weaknesses, opportunities, and threats) analysis is a rundown of the company’s current situation. It is a necessary component of a business strategy as it represents the current strengths and opportunities which the company can make use of and the weaknesses and threats which the company should be wary of.

Operational Tactics

Unit and functional business strategies get deep into the operational details of how the work needs to be done in order to be most effective and efficient. This saves a lot of time and effort as everyone knows what needs to be done.

Resource Procurement & Allocation Plan

The strategy also answers where and how will you procure the required resources, how will it be allocated, and who will be responsible for handling it.


Unless there are no control measures, the viability of a business strategy can’t be assessed properly. A good business strategy always includes ways to track the company’s output and performance against the set targets.

Business Strategy Examples

Creating A New Market

Hubspot developed an executed a perfect strategy where it created a market that didn’t even existed – inbound marketing.

It created an online resource guide explaining the limitations of the interruption marketing and informing about the benefits of the inbound marketing. The company even provided free courses to help the target audience understand its offering better.

Buying The Competition

Facebook’s buy the competition strategy has been successful ever since the company was launched. It focuses on buying the pioneer or the competition instead of creating the technology of its own to compete with it. So far there have been many notable acquisitions by Facebook like Instagram, Whatsapp, Oculus, etc. to increase its reach and user base.

Product Differentiation

Apple differentiated its smartphone operating system iOS by making it really simple as compared to Android. This differentiated it and built its own followership. The company has been following a similar strategy for its other products as well.

Cost Leadership

OnePlus launched its flagship product OnePlus 6T with similar features to iPhone X but at a price which is less than half a price of iPhone X. This strategy worked for OnePlus making it the top premium phone brand in India and other countries.

Credits: feedough

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What digital finance means for emerging economies

Financial services are the lifeblood of an economy, enabling households and businesses alike to save, invest, and protect themselves against risk. Yet in many emerging economies today, the majority of individuals and small businesses lack access to basic savings and credit products, which hinders economic growth and perpetuates poverty. Two billion people in the developing world lack access to a bank, and 200 million small businesses cannot get the credit they need to grow, a gap estimated at $2.2 trillion.

The solution can be summed up in two words: digital finance, the idea that individuals and companies can have access to payments, savings, and credit products without ever stepping into a bank branch. This is possible through digitization, which can essentially turn a smartphone into a wallet, a checkbook, a bank branch, and an accounting ledger, all in one.

Financial inclusion could help boost economies, especially in parts of the world that need it most. Now is the time to make this a priority. The ubiquity of the mobile phone, even in remote areas in emerging markets, makes it possible to bring financial services to people who have never even considered opening a bank account. Already, mobile networks reach nearly 90% of people in emerging economies and 80% of adults have a mobile phone subscription.

Digital dramatically lowers the cost of providing financial services. Digital accounts can be 90% cheaper than conventional ones for banks and other providers to maintain, costing as little as $10 annually per customer. This makes it profitable to provide accounts for lower-income people. The long-held goal of financial inclusion — for individuals and for micro and small businesses — can now become a reality.

Our research shows that digital finance could enable 1.6 billion people in developing countries to access financial accounts, loans, and other financial necessities (and lower the cost and increase the convenience for the 2.4 billion who already have bank accounts). Many new customers would be among the poorest 40% of people in the world; more than half would be women. The balances that these new customers accumulate can then be loaned out, providing up to $2.1 trillion in new loans for individuals and micro, small and mid-sized businesses.

What’s more, we estimate that improving access to financial services could add $3.7 trillion to the GDP of emerging economies by 2025, or 6% — equal to 1.5 times the current GDP of all of Africa. The additional GDP could create up to 95 million new jobs. The lowest-income countries stand to gain the most, adding as much as 10% to 12% to their GDP.

There are several building blocks that need to be in place for digital finance to take off. One is the right infrastructure, which includes widespread phone ownership and network coverage at an affordable price; a robust digital payments system; and widely used ID systems preferably with digital authentication. What’s also needed is the right business environment where a range of providers can compete on a level playing field and innovative new digital finance products and services. This requires regulations that strike a balance between prudence to avoid undue risk, and innovation.

Businesses of all sizes stand to gain in big ways. Businesses could save 25 billion hours of labor by switching from cash to digital payments. Some 90% of transactions in the developing world are in cash, but having to protect piles of currency deters owners from expanding, since they cannot be in two places at once. Firms that accept or pay with mobile payments gain ready access to sales records, allowing for better inventory management. In addition, digital payments create a data trail that enables lenders to assess the creditworthiness of even micro-enterprises.

Financial service providers have a big opportunity as well. They could cut costs by up to $400 billion annually by evolving from bricks and mortar to digital strategies. And because they can expand their customer base at relatively low cost, they could collect more than $4 trillion in new deposits—money that can be converted into loans. Savings that are currently stored under mattresses can be put to work, adding more activity and liquidity to the economy.

Governments benefit, too. Digital payments could improve their finances by reducing opportunities for corruption, targeting spending more precisely, and improving tax collection. We estimate that they stand to gain $110 billion per year by digitizing payments. Many government services, such as education and healthcare, stand to gain. For example, parents in the Côte d’Ivoire used to pay school fees in cash, but robbery and bribery were common. So beginning in 2011, the country began introducing mobile money payments. By 2014, nearly all school fees were paid digitally, mainly by phone. Parents and students no longer had to worry about being robbed—and more money made it into school budgets. Mobile money providers got new transactions, plus fees from the government. The education ministry saved money and gathered more and better student information.

While financial inclusion is far from inevitable, all the trends are moving in the right direction. The wireless infrastructure is mostly in place. The idea suits our times.

This article originally ran in Fortune.

In emerging economies, using a smart phone to provide access to financial services, could help boost the economy, write James Manyika, and Rodger Voorhies in Fortune.

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