Portfolio Management

Portfolio management is one of the new objectives of any organization which is looking to maximize the reach and productivity of the organizational goals. Portfolio management can also be considered a very important aspect to revive the economy of the organization. As Portfolio management is more focused on the big picture of the organization it creates a wide point of view to manage different programs and projects running in an organization. Due to the pandemic, many organizations are looking forward to renewing their Portfolio management plans to get the most out of their investment in the era of post-pandemic. To fully understand how Portfolio management affects the ROI of any organization let us first see the main differences between Portfolio Management and Project Management.

Project Management vs Portfolio Management, The Key Differences.

As the name suggests a Portfolio describes all aspects of any organization at a higher level or in a broad term. It describes the Organization’s Core values, its main Aspects, and the organizational guidelines for different projects at a higher level. Portfolio Management is a term that focuses on managing the organizational objectives according to the required circumstances, setting priorities based on the business leadership’s agreed-on objectives, and then choosing programs and projects to undertake based on what will provide optimal business value. The goal is to balance the implementation of change initiatives and the maintenance of business-­as­-usual while optimizing return on investment.

On the other hand, A project is a single task, that aims to produce a specific product, service, or benefit within a defined timeline. Project management is more focused on the detailed view of different projects, their key aspects throughout the whole project lifecycle i.e. from initialization to Deployment. It makes certain that projects are completed on time, within budget, and meet the specified requirements. It is the Process that defines best practices, reviews processes to improve efficiency, and operates with stakeholders to make sure expected benefits are recognized, among other responsibilities.

The Demand for Portfolio Management

After understanding the difference between Project Management and Portfolio Management let’s check why there is a rise in the portfolio management processes Within different organizations.

Portfolio management gives the “Best investment plan” to the Organizations as per their income, budget, and capacity to undertake risks while contracting different projects. The Pandemic era has made it compulsory to manage expenses in new ways, as everyone is taking different approaches in of working. Portfolio Management is necessary to enable the portfolio managers to supply customized investment solutions to clients and companies as per their conditions and requirements. Portfolio managers comprehend the client’s economic needs and present the most reasonable and unique investment approach for them with minimum risks involved.

Types of Portfolio Management

There are different types of portfolio management strategies that can be used to tweak the organization’s portfolio according to its plan.

1: Active Portfolio Management: In an active portfolio management service, the portfolio managers are actively involved in buying and selling securities to ensure maximum profits. In this approach, the managers are more focused to allocate the assets and improve performance.

2: Passive Portfolio Management: In passive portfolio management, the portfolio manager deals with a restricted portfolio created to fit the current market scenario.

3: Discretionary Portfolio management services: In Discretionary portfolio management services, the client allows a portfolio manager to take care of his financial needs on his behalf. The Client issues money to the portfolio manager who in turn takes care of all his investment needs, paperwork, and documentation.

4: Non-Discretionary Portfolio management services: In non-discretionary portfolio management services, the portfolio manager can merely advise the client what is good and bad for him but the client reserves full right to take his own decisions.

Portfolio Risks

Portfolio risks are there to normally cover those internal and external circumstances that will affect the portfolio overall rather than any single project or program. It includes resource availability, execution capacity, investment limitations, and regulatory matters.