Friday, November 1, 2019

Downside of Portfolio Management


As my professor once said that PMI has a 'fetish' with making complex diagrams for Portfolio management issues, introduction to to an organization from the scratch is not straight forward. 
For small companies, this might be an over-kill. If they have a single project, with a few stakeholders, and known risks, why go through the trouble of establishing an elaborate portfolio management framework. Setting up and perfecting portfolio management requires dedicated resources and the process has its own ramp up time. Would new companies and start-ups have this luxury in time and resources? Even for bigger companies, risk and benefit management can be a very time-consuming process. The same time that can be used in the product development phase rather than planning all aspects of portfolio management. For very big companies, it might even be difficult to match and compare complex projects and align them with the strategic objectives.
Image result for ashby's law
There is alternate thinking as in Ashbys law of requisite variety [2] which states that a control system must have as many states as the system it wants to control. If we want portfolio management to optimize the system based on inputs of risks and benefits and reports, does it have all the information? Are all the risks and benefits already known? Or can they all be known? 
Absolutely No !!! 
References:  
  • https://en.wikipedia.org/wiki/Variety_(cybernetics)  
  • https://www.slideshare.net/jurgenappelo/complexity-thinking/118-Law_of_Requisite_VarietyAshbys_law

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