At the Coalface 55

Implementing the Portfolio Management process usually requires changes to

the organisation chart.

When implementing new processes and applications, don’t forget to remove the
previous processes and systems.

Good portfolio decisions can only be taken on the basis of high-quality data.

Standard templates should be introduced for frequently used project documents.

Metrics are needed to track portfolio progress and project progress.

4.4 Assessing and Managing Portfolio Risk

The importance of Portfolio Management is shown by the following discussion in
summer 2006 with Ruedi Klein, then Product Portfolio Manager in the Mobility
Access business unit at Lucent Technologies, Inc. On 1 December 2006, Lucent
Technologies and Alcatel completed their merger and began operations as the
world’s leading communication solutions provider.

Lucent Technologies, headquartered in Murray Hill, N.J., designed and

delivered systems, services and software for communications networks. In fiscal
year 2005, which ended 30 September 2005, Lucent reported revenues of $9.44
billion. Lucent’s business segment structure was organized around its products and
services. The Mobility Access and Applications Solutions segment included
CDMA, UMTS, WiMax and applications. Revenues of this segment in fiscal 2005
were $4.66 billion. The Mobility portfolio consisted of a range of radio access,
core, and backhaul products. These included products such as base stations,
controllers, and network software. This was a fast-moving portfolio with a need to
get new products and new technologies to market fast. Some products had lives as
short as 12 months, although others had lives as long as 15 or 20 years. Common
platforms helped keep costs down. Typically, there were about 70 development
programs, many of which contained several projects, under way at any one time.

4.4.1 The Discussion

Q. Ruedi, as a Portfolio Manager for a large Portfolio of high-tech products, do

you feel that Best Practices for Portfolio Management are widely known?

A. The basic practices have been known for many years, but recently people
have been taking more interest in them. In the last few years, the focus in most
companies has been on getting the development process, the supply chain, and
ERP working effectively. Now that has been achieved, companies are looking to
ensure they are using the best Portfolio Management practices. However, there is
an important area of Portfolio Management that I feel is often neglected – risk