What is It?
Portfolio analysis involves evaluating a company’s projects, investments, products or any like collection of things to determine their alignment with business direction, objectives, profitability, and potential risks.
This method enables organizations to prioritize high-value opportunities and discontinue underperforming ones. It plays a critical role in optimizing resource allocation and improving financial performance.
The 4 key challenges in portfolio analysis include:
- Data accuracy, completeness, reliability
- Not terminating projects
- Resistance to change
- Conflicting priorities and interests
A well-executed portfolio analysis ensures that resources are directed toward the most impactful initiatives, increasing the organization’s overall efficiency and competitiveness
Why You Do it:
Portfolio analysis helps businesses make better decisions regarding their initiatives. By systematically evaluating criteria for performance and potential, companies can focus resources on initiatives that drive maximum value.
Portfolio analysis has many useful applications such as:
- Analysis of projects, processes, strategies etc.
- Requirements analysis
- Business and Enterprise Architecture
- Strategic and Organization Alignment
- Mergers and Acquisitions
- Value Quadrant analysis (e.g. SWOT)