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Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy

ISBN: 978-0-470-12688-2
224 pages
April 2007
Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy (0470126884) cover image
If where an organization allocates its resources determines its strategy, why is it that so few companies actively manage the resource allocation process? "Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy" goes beyond platitudes about why you should use corporate portfolio management (CPM) by offering a practical methodology to bring this powerful discipline to your organization.

"Optimizing Corporate Portfolio Management" takes an expansive view of where CPM can be utilized by demonstrating that it can be used across any business line, product group or functional area, e.g., IT, R&D, innovation, marketing, salesforce, capital expenditure, etc. CPM is appropriate anywhere discretionary investments are being selected and executed. As a result, other terms used to describe portfolio management such as IT portfolio management, enterprise portfolio management, and project portfolio management are all merely subsets or slices of CPM.

The book is written by Anand Sanwal, an expert on CPM, who has led American Express' CPM discipline (referred to as American Express Investment Optimization). American Express' CPM efforts are widely recognized as the most extensive, substantial and progressive deployment of CPM across any organization. Sanwal avoids academic theories and consultant jargon to ultimately deliver pragmatic and proven recommendations on how to make CPM a reality. The book features a foreword by Gary Crittenden, former CFO and EVP of American Express, and several case studies from leading financial services, technology, and government organizations utilizing CPM. Additionally, the book has received significant praise from thought leaders at Google, HP, American Express, The CFO Executive Board, Gartner, Accenture Marketing Sciences, The Wharton School of Business and many others.

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Foreword.

Preface.

Acknowledgement.

Chapter 1. Overview of Corporate Portfolio Management.

Why Is CPM Important?

Framework for CPM Success.

What Should Be Considered an Investment?

Mismanaging Your Corporate Investment: The Seven (and a Half) Deadly Sins.

Chapter 2. Bringing CPM to Your Organization.

Four-Step Roadmap to CPM Success.

Are We There Yet?

Useful Frameworks and Tools: Optimizing Decision Making Within Your Corporate Portfolio.

Chapter 3. Applying CPM to Specific Areas within the Organization.

Information Technology.

Innovation/Research and Development.

Marketing/Advertising and Promotion.

Capital Budgeting/Capital Expenditure.

Sales Force.

Chapter 4. Case Studies.

American Express.

TransUnion.

Hewlett-Packard.

State of Oregon Department of Human Services.

Appendix: Useful Tools, Frameworks, and Practices to Enable CPM.

Personnel Survey: Understanding Current Company Practices and Attitudes Toward CPM.

HP’s Strategic Financial Analysis Curriculum Outline.

Information (Diagrams, Exhibits, and Text) for Building Your CPM Business Case.

Index.

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Anand Sanwal is Vice President, Investment Optimization and Strategic Business Analysis, at American Express. Within this role, he is responsible for managing billions of dollars of per annum discretionary investment spent as part of American Express's CPM initiative, and also overseeing the CFO's strategy and analysis group. Sanwal holds a degree in finance and accounting from the Wharton School of Business and is a recognized thought leader on corporate portfolio management, speaking frequently to companies and research organizations including the CFO Executive Board, Beyond Budgeting Roundtable, Enterprise Portfolio Management Council, and Gartner, among others. He welcomes your feedback, insights, and comments and can be reached at asanwal@corporateportfoliomanagement.org
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"Optimizing Corporate Portfolio Management is a refreshing treatise of an age-old problem—how to allocate the resources across the firm.  It makes a very coherent argument for aligning the allocation decisions across financial, strategic and risk objectives.  The reader is guaranteed to be given a fresh look and a broader perspective on how to tackle this very challenging organization.  A must read at the top of the organization!!!"
—David J. Reibstein Professor of Marketing, The Wharton School-University of Pennsylvania

"Finally a book that delivers against an ambitious corporate portfolio management premise. A compelling solution backed by an unparalleled framework, pragmatic implementation steps and case studies. A must have for all organizational leaders trying to maximize the value of their corporate investments."
—San Retna Chair, Enterprise Portfolio Management Council Principal, TransformAction

"Pragmatic and full of real-life examples...a must-read for anyone involved with or practicing portfolio management."
—Piyush Sanghani Director, Portfolio Management, Trans Union LLC

"This book will be very helpful to any executive who wants to improve their organization's resource allocation processes and make smarter investment decisions. Sanwal writes with the perspective of someone who has been 'in the trenches' and provides clear guidance on the realities of implementing rigorous processes in the real world."
—Don N. Kleinmuntz, PhD Research Professor of Policy and Management, University of Southern California Executive Vice President and CFO, Strata Decision Technology, LLC

"Progressive thinking on a staid business problem. A well-thought, useful framework for corporate investment managers everywhere—the professed mountain is not insurmountable."
—Ronald D. Balzan Vice President - Business Analysis & Treasurer, AIG Consumer Finance Group, Inc.

"Allocating capital to new projects and opportunities has a greater effect on strategy than perhaps any other process in an organization. And still, it remains one of the least understood processes in management. Anand Sanwal's in-depth examination surfaces insights on how to link capital allocation to strategic planning. His book provides not only a detailed description of the complexities of the problem, but practitioner oriented advice for what to do about it."
—Clark Gilbert Former Harvard Business School Professor and Co-author of From Resource Allocation to Strategy

"Anand Sanwal's new book does a great job of developing and explaining new approaches to portfolio management. I especially value the emphasis on the need for good metrics to close the learning loop on portfolio decisions."
—Paul Farris Landmark Communications Professor of Business Administration, Darden School, University of Virginia

"Portfolio Management was one of the breakthroughs of modern finance and it's application to the Corporations activities shows much promise—however today it is much more art than science. Anand Sanwal's book is a significant contribution to turning CPM into a science."
—Martin Curley Senior Principal Engineer and Global Director IT Innovation and Research, Intel Corporation

"Optimizing Corporate Portfolio Management articulates a discipline and strategy that will significantly benefit large—and middle-market companies alike. Anand Sanwal avoids simplistic one size fits all approaches which have become commonplace in discussions of portfolio management to deliver keen, no-nonsense insights that will strengthen your organization."
—Rajesh Shah Executive Vice President, MS International, Inc.

"This is a must read for executives, managers, and staff; and beginners as well as seasoned practitioners of portfolio management. Portfolio management is not about IT. It is about the 'business-of-the-business;' organizational efficiency, effectiveness, and investment, resource and operational optimization and differentiation. Anand demonstrates a gifted talent to clearly and succinctly articulate why portfolio management is both so difficult and yet so simplistic. Read it, understand it, embrace the journey—the challenges, the opportunities, the value, the benefits."
—Dennis E. Wells,Information Services Policy and Planning Manager, Oregon Department of Human Services

"Regardless of a company's size, it is very critical to have a compass for investment decisions especially in uncertain business environments. With data driven corporate portfolio management, I am able to lead my company in the right direction in a more effective and efficient way."
—Toshi Sakuma CEO Sakuma International S.A.

"Thorough, to the point and extremely pragmatic, Anand Sanwal has provided an excellent case and strategy for moving away from currently anemic methods of corporate and strategic planning. He provides a clear framework to help organizations align investments with strategic, financial and risk objectives ultimately enabling them to realize the power of corporate portfolio management."
—Guhan Swaminathan Co-Founder and Managing Director Virgo Capital

"Corporate portfolio management does not have to be a mystery. And it certainly should become a practical guide to putting limited resources to work on the most strategically beneficial work. Anand's approach to enterprise portfolio management is direct, practical, and focused, and is based on proven practices that I have implemented in organizations of all sizes worldwide."
—Ernie Nielsen Managing Director-Enterprise Project Management and Masters' Professor of Project Management-Marriott School of Business, Brigham Young University

"This new book points the way to new methods for transforming your organization through better processes and optimizing portfolio management. Leading edge companies moving beyond budgeting can use it to learn how continuous planning can lead to higher returns."
—By Steve Player Program Director, Beyond Budgeting Round Table (BBRT), North America

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High-level Practitioner Survey
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Practicioner's Presentation
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Survey to Analyze CPM
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