Portfolio management Essay Example | Topics and Well Written Essays - 2000 words

Portfolio management - Essay Example Categorisation involves grouping potential components in to categories in order to facilitate further decision making. Usually, categories link their components with a common set of strategic goals. In this first step of implementing, it is important to establish what is going to be managed and as such, it is necessary to have an overview   of the extent and variety of potential and available work   and how it maps in to the organisations overall strategy. It is important at this stage to have to be aware of the extent and size of your mandate. This is the stage where one decides the terms, scope and defines the portfolio as well as gaining agreement on the basic portfolio model (Reilly & Brown, 2012). This is where on defines information such as: departments that are going to be covered, the category of work included for example whether the portfolio includes operations or projects, the categorization scheme which aids in balancing the portfolio in areas of importance to allow o ptimization of the overall allocation of resources.   For example, categories may include work that supports the business or grows the business. Work can also be categorised as high, medium or low risk. It is important that for every categorisation defined, some guidelines are set for how work should be balanced. Make sure that projects that are chosen are aligned to the goals and strategies of the organisation and also have the highest value. As such, understand the models that the organisation or department wants to employ.