Differences Between Portfolio and Program Management
With ever-increasing focus on delivering return on investment (ROI) in business, many organizations have implemented Program Management and Portfolio Management functions to improve project success levels. Do you know the similarities and differences between them? Let’s take a closer look at what Program and Portfolio Managers do, and how they can improve your bottom line!First, let’s get some definitions in place, and do some comparisons. Then, we can look at how organizations implement Portfolios and Programs to realize success. The quick definitions from the PMBOK Guide 5th Edition are:- A project is a temporary endeavor undertaken to create a unique product, service, or result. Project Management is the science (and art) of organizing the components of a project. It involves the planning of an organization’s resources in order to move a specific project towards completion.- A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Program Management is the application of knowledge, skills, tools, and techniques to a program in order to meet the program requirements and to obtain benefits and control not available by managing project individually.- A portfolio is a collection of projects and/or programs and other work that are grouped together to facilitate the effective management of that work to meet strategic business objectives. Portfolio Management refers to the centralized management of one or more portfolios to achieve strategic objectives.The focus on objectives in these definitions is the key distinguisher between Program Management and Portfolio Management:Program management is focused on tactically improving a group of mutually beneficial projects, and other initiatives, as a whole.Portfolio management is focused on achieving strategic business goals from a collection of programs and projects which aren’t necessarily related.Let’s look at a simple example to explore how the difference impacts a business:Let’s assume our fictitious company Real Estate Gurus (REG) is in the real estate business to provide housing projects of various types. REG management and board have a strategic goal to improve the net profit of the company.Debbie has been assigned as the Portfolio Manager. The Portfolio is categorized into buckets that allow Debbie to group projects and programs according to their potential profit (high, medium, low) each with their corresponding risk levels. Debbie’s efforts are focused on increasing the overall profits of the Portfolio. She has selected several high ROI (and high risk) projects to maximize profits.In Debbie’s portfolio there are projects for new house construction, projects for remodeling of new apartments, projects for marketing new homes, and projects for improving the efficiency of new home designs using IT tools.The Programs in place at REG consist of:Construction projects, managed by Allan (Program Manager for Construction) Marketing projects, managed by Kathy (Program Manager for Marketing) IT for Construction projects, managed by Steve (Program Manager for IT) Allan, Program Manager for Construction is focused on improving the efficiency of projects selected, consolidating resource orders to get best pricing, using common practices and vendors for the apartment remodels we’re doing, and eliminating wasted time by identifying unused resources across multiple active projects.To lessen the overall portfolio risk, Debbie has worked with Allan to initiate a new project to study “Best Practices” in the remodeling of new apartments. Robert, a Project Manager at REG has been assigned to that specific project.Here’s a sequence of events:Robert (Project Manager) assigned to the new “Best Practices” project reports to Allan, and identifies several improvements, such as new cost-effective insulation materials; use of natural light for reducing energy consumption; and using more efficient and more cost-effective appliances from a newly emerged Korean company.Allan (Program Manager) chooses to implement the proposed improvements across the next few apartment remodeling projects, and sees significant cost reduction, realizing a boost in net profit on those projects.Debbie (Portfolio Manager) sees this great improvement, and therefore chooses more “apartment remodeling” projects than in the past, boosting profits for the whole company.Another success story!By having a Portfolio Manager in place, the company has significantly increased its potential for profits through selection of higher-than-average ROI projects. The Program Manager has also contributed significantly to company’s success by identifying and providing best practices for projects.In a nutshell, Portfolios are different from Projects or Programs. A Portfolio can contain multiple projects and/or programs, and can also contain works that are not project oriented. The primary focus of Portfolio Management is on managing organizational investment to maximize the company’s ROI. Program Management is about the execution of those selected programs and projects to maximize potential.
What’s The “411″ On New And Used Small-Business Phone Systems?
Choosing the right new and used small-business phone system for is one of the most important decisions you’ll make for your business. The telephone is one of the easiest means of communication with your customers, partners, vendors and employees. You reach out to them; they reach out to you via the telephone. A phone system allows your business to connect to a public phone network instead of having each phone connect separately. Dealing with incorrectly routed calls, sudden interruptions, disconnections, or a plethora of bewildering automated options will only cost you time and money, cause frustration and hinder your relationship with your clients.Although small-business phone systems don’t have all the bells and whistles that larger systems have, it is still important to consider the many factors that go into choosing the right system for your business. New and used small-business phone systems are widely available which means you are sure to find something that suits your budget but choosing the best telecommunications provider means choosing a dealer that can recognize the communication needs of your workforce, support your new or used phone system by keeping it up and running the whole time, and ensure your communications needs are compatible with the ever evolving 21st century technology.Most basic phone systems these days come with certain standard features:*Voicemail- Allows callers to leave messages for specific employees at your company.*Call Hold- Enables you to put your caller on hold while transferring lines, preparing for conferencing or gathering information.*Call Forwarding- Gives you the ability to transfer calls to other employees, a voice-mail box or auto attendant.*Conferencing- Lets you hold conference calls with several customers and consultants at one time.*Speed Dial- Allows callers to press a button associated with a particular number in order to reach that contact faster.*Redial- Will redial the last number called.*Auto Attendant- taking place of a human receptionist, it directs callers to the appropriate routing option.*Paging- Employees broadcast a message though the speaker of another phone.How many employees do you have? Business phone systems typically come in three basic configurations: Private Branch Exchange (PBX) systems, key system units (KSU), and KSU-less phones. How many stations (extensions) your business needs along with what features you require will determine what type of system you choose.Should I consider A VOIP system? VOIP stands for Voice Internet Protocol and is a internet phone system. Instead of using a traditional land line, your business’ Internet connection sends and receives telephone calls. VOPI requires a router that will translate the Internet’s signal into a usable signal that can be used for a standard telephone.What factors should I consider when looking at cost? Cost is obviously an issue, especially when it comes to owning a business. Considering these factors, aside from the phone system itself, will prepare you for making a decision based on your budget as well as preventing you from having any last minute surprises when it comes time to pay for your new or used phone system.*Telephones- Prices vary depending on what brand you choose as well as if you opt for a new or used system for your business. Buying in bulk will save you money and if you are flexible, you can find phones that are as little as less than $100 each.*Installation- Most business owners are not “do-it-yourselfers” which means you will need to pay a professional to install your phone system. Complex wiring and installation is not cheap but paying for expert installation can save you money in the long run by preventing any problems in your communication system.*Cabinet- Every phone system must have the appropriate cabinet to house it. Ranging anywhere from $1,000-$10,000, this is typically included in the cost of your phone system but still needs to be considered an expense.*Optional Features- Consider the need and cost for additional features such as: on-hold music and voicemail which are not typically part of a standard phone system.Choosing a phone system for your small-business is a big decision and one that you want to feel confident about. While shopping for systems and dealers, speak to other business owners to get their opinion. Ask to see a demo before you purchase to ensure it will meet your current and long-term needs. Think about future growth. You may want to upgrade at some point and time and may need extra wiring in the future. Lastly, shop around. Don’t settle on the first price you are given. Consider new and used phone small-business systems as part of your business’ budget and communication needs.
Leasing Equipment Most Likely Will Be The Optimal Way To Grow Your Business
If you are an office manager or a business owner why would you consider leasing rather than paying cash?It makes no difference if you are a start up company or upgrading your existing equipment/facilities, the method used could have a lasting impact on your company.Generally, a company will use one of three methods to acquire assets:o Conventional bank loans: While bank loans will generally advertise the lowest APR on a transaction, they can often times be much more expensive when the sizable security deposit is taken into consideration.o Cash transactions: Although paying cash is universally regarded as the least expensive choice, you should carefully consider other options and the overall costs and effect on the business before paying cash. Cash has a “hidden” opportunity cost of not having funds available for other business uses (like advertising, etc).o Leasing: Leasing allows for 100% financing and can typically include all installation, deliver, and applicable tax. The lease is structured as a “rental” payment for a fixed term at fixed monthly payment. Once the term is paid, there is typically a nominal option to purchase, conveying ownership to the customer.Effects on the growth of your companyIt is safe to say that most businesses intend to grow in strength and scope and that those objectives generally guide business decisions and define the term “success”. It is common knowledge that a majority of businesses fail due to insufficient capitalization and improper management of cash flow. If a company does not have a positive cash flow, it cannot meet the requirements to grow or even stay in business.Taking the above information into consideration, partaking in a cash transaction can severely hinder your companies’ prospects of success. Leasing can free up cash flow and can be a powerful vehicle to drive your business to success.According to the Equipment Leasing Association of America, 80% of U.S. business’ lease some or all of their capital assets (furniture, manufacturing equipment, computers, software, fork lifts, delivery trucks, and industrial shelving.) Most business owners and office managers understand that there is a greater benefit from using these assets compared to owning them. This will allow them to free up capital to inject additional cash into revenue generating items that cannot be financed; such as: sales, marketing, recruiting, and training.Tomorrow is only a day awayA company has to consider the lasting effects on their business when they are acquiring new assets. By participating in all cash transactions, small business owners put themselves at risk for diminished borrowing ability in the future. Lenders have set criteria of what they look at before they are willing to extend credit. They generally are: credit habits of the borrower, capacity to repay, and the collateral.It is very easy to determine the value of cash. If a lender sees that you have $50,000 in cash on your financial statement it is hard to say that the asset is worth anything different then $50,000. In the event you were to take this cash and purchase a piece of equipment for $50,000, the lender has to take into account the applicable taxes, installation of the equipment, sales commissions and equipment depreciation. In many cases this will reduce the value of this asset up to 40%. If the asset now is considered to be worth $30,000 and your business can borrow at five times equity, this cash transaction has reduced your borrowing capacity by $100,000.It is often said that cash is king. If your business needs to acquire new equipment, it is imperative that you retain your borrowing capacity. Businesses and individuals alike often need cash to get an institution to lend. Leasing is a vehicle that allows you to leverage capital and keep funds available to partake in opportunities when they arise.If you are about to make a large purchase for your business, make sure you consider all of your options and think about the impact that it will have on your companies borrowing capacity, tax implications and strategic initiatives.Advantages of leasing over buying equipment:o The ability to have the latest equipmento Consistent expenses in budget planningo Help to manage company growtho No down paymento Increase cash flowo Lower costso Extremely flexibleo Tax advantageso 100% financingo Convenient and fasto Manage Growtho Transfer of risk