A programme is a big project and a portfolio is a big programme? NOT! There is a fundamental discontinuity between the three, mainly in skills. This is the same for portfolio assurance.
From the Assurance SIG we heard that project and programme assurance fundamentally takes a risk based approach. Should the same be true for portfolios?
Let’s explore programme assurance first. I would expect this to focus not only on the risks around delivery to time, cost, performance, benefits, etc. but also on how the potential benefits can be maximised and are there opportunities to be exploited that are being missed due to changed internal and external circumstances?
Is programme assurance about assessing strategic fit and addressing strategic risk? The strategic objective might be to enter a new overseas market rapidly - and the chosen approach is to grow organically using ex-pat resource from the HQ. So in this case the strategic fit is good. However the "strategic risk" to the business of this approach might be high, distracting the management team from their focus on the home market.
Back to portfolios. I think portfolio assurance should be more about asking the question "is the portfolio optimised in terms of best achieving or exceeding the enterprise strategic objectives, balancing risk, resources, change capability, etc." Risk is only one criteria to be considered – and could be considered too inward looking.
What about an "opportunity based approach" - looking for a bigger bang for one’s buck. A balanced portfolio should contain a number of projects - some low risk / low return, but some more speculative high risk /high potential return in the portfolio (but no high risk / low return ones!). The balance of low / high would depend upon market conditions and business performance over time. But the question of portfolio balance will come down to the risk and opportunity appetite of the Board - both need to be considered.
Thus portfolio assurance should comment on this balance and the opportunities to better achieve or exceed the objectives in light of the market. It should also review adoption of portfolio governance and processes.
The assurance analysis of a portfolio should surface risks beyond the natural appetite of the Board, and opportunities that are not being capitalised upon. The outcome of the assurance exercise might be to launch new projects whose primary objective is to mitigate a particular risk or seize an opportunity.