Establish a Portfolio Management Office
A project portfolio manager should be appointed with accountability for the success of the entire project portfolio. The portfolio manager should be given an estimate of the total funding to be made available, but it should then be up to the portfolio manager to determine how to allocate the funds within that cost constraint. At the very least, the portfolio manager should have responsibility for recommending resource allocations for final approval by a committee of senior executives.
In either case, senior executives should be enlisted to serve as a steering committee responsible for providing and updating (e.g., in response to changing strategy) the value judgments and policy decisions needed to guide portfolio management. It should be possible for the portfolio manager to suspend at any time further commitment of investment dollars due to failure to make anticipated progress, changing economic climates, or shifts in business objectives.
A portfolio management team should support the portfolio manager. This team is then responsible for evaluating project proposals, accepting or rejecting proposals, accelerating and decelerating projects, allocating resources, and otherwise continuously managing the project portfolio over time. The team should have responsibility for verifying cost, value, and risk estimates provided in support of project proposals. One member of the team should be designated as the primary contact person for each project manager.