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Corporate Portfolio Management Overview "...How business really gets done has little connection to the strategy developed at corporate headquarters. Rather, strategy is crafted, step by step, as managers at all levels of a company – be it a small firm or a large multinational – commit resources to policies, programs, people and facilities. Because this is true, senior management might consider focusing less attention on thinking through the company’s formal strategy and more attention on the processes by which the company allocates resources.” Source: Harvard Business Review, Feb 2007 “How Managers’ Everyday Decisions Create – or Destroy – Your Company’s Strategy” These words clearly articulate the power of the strategic and financial discipline known as Corporate Portfolio Management (CPM). Resource allocation inherently is a company’s strategy, and CPM provides a mechanism to actively manage company strategy. Resource Allocation = Strategy Corporate Portfolio Management optimizes resource allocation The Problem – Every day, organizations make decisions about where to deploy finite resources, yet surprisingly, few have disciplined methods to select and manage these investments. Given resource allocation decisions drive strategic and financial outcomes, this is a pressing issue. The Solution – The active selection and management of these initiatives as part of a portfolio which balances risk and financial and strategic returns. This practice known as Corporate Portfolio Management is the strategic and financial practice that leading organizations utilize to optimize their allocation of resources. CPM works because it is: Transformational – Research indicates that between 25-40% of a company’s expenses are actually discretionary. This includes capital and operating expenditures. Actively managing this sizable pool of discretionary investments ultimately advantages organizations utilizing CPM significantly by resulting in greater flexibility, transparency and ultimately measurable results. Effective - Companies that have actively adopted CPM have been able to deliver outsized financial and strategic returns relative to their competition while actively and better managing risk. Informative – Organizations adopting CPM actively use it to form the basis for discussions with the company’s management team, their Board and even discussions they may have with Wall Street. Flexible – It can be deployed at a total organization level as well as within specific business, product and functional groups. It is just as applicable within a strategic business unit as it is in when used to manage information technology (IT), marketing/advertising & promotion, R&D/innovation/new product development, capital planning, salesforce, etc. It is used by large and small companies alike as well as for profit and not for profit institutions. What is the CPMA? The Corporate Portfolio Management Association (CPMA) endeavors to help progressive organizations build or enhance their CPM discipline to ultimately transform themselves – financially and strategically. To enable this, CPMA offers best practices benchmarking, tools, research, educational seminars and knowledge sharing amongst like-minded organizations. To learn more about CPMA's services and participate in the portfolio management best practices benchmarking, please contact us by clicking here. What We Believe Don't Bother Membership To become a member, just fill out the Membership survey by clicking here. Member organizations get member privileges such as preferred or members-only access to tools, presentations and services offered by CPMA. Additionally, organizations who participate in CPMA's Best Practices Benchmarking (these generally are those organizations most serious and progressive about undertaking CPM) do get preferential access to some tools, educational services and research (via a login to the CPMA site). If interested in learning more about membership requirements, it is available by clicking here. If interested in having your organization's resource allocation practices benchmarked, please contact us by clicking here. Of course, you can always email us at info@corporateportfoliomanagement.org. Non-Profit Services The challenge of managing finite resources is extremely important for non-profit organizations (charities, NGOs, etc). To this end, CPMA aims to offer most of its practices and content for free or at cost to qualifying non-profit organizations who may find it useful. To learn more about CPMA’s soon to be offered non profit services, please contact us by clicking here. Press Room Click here to be taken to our press room. Media and other inquiries can also be directed to the CPMA by emailing info@corporateportfoliomanagement.org. Feedback We want to hear from you and get your ideas on how we can improve CPMA to ensure it meets your needs. Please send us an email (info@corporateportfoliomanagement.org) or use the contact us form to let us know how we can serve you better. |
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