Additional details about the book

The description of the book available on Amazon.com is below. I'm also happy to report that the book will contain five great case studies on organizations who are leveraging a CPM strategy & discipline. The case studies will be of the following organizations:

1. American Express
2. Cisco Systems
3. Hewlett Packard
4. State of Oregon: Department of Human Services
5. TransUnion

As you can see from the list, there is great diversity amongst the types of organizations chronicled. As you will see in the case studies that ultimately will be developed, each organization has undertaken CPM in different ways with all, however, realizing significant benefits.

Let me thank the following practitioners who helped make these case studies happen. Bill Bien of Cisco Systems, Michael Menke and Kevin Yorks of HP, Dennis Wells of the State of Oregon, and Piyush Sanghani of TransUnion. These are the people who are out 'in front' of the still burgeoning space of Corporate Portfolio Management - the pioneers. I'm indebted to each for their time, insights and openness. I learned a great deal and thoroughly enjoyed our interactions.

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The book's description as given on Amazon.com is given below.

Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy goes beyond the typical plain vanilla discussion of corporate portfolio management (CPM) and its many benefits to actually offer a set of pragmatic and proven steps to help executives, managers and current and prospective practitioners understand and ultimately bring this powerful strategic discipline to their organizations. Step by step, this book shows one how to build a CPM discipline within their organization based on their organization’s strengths/competencies and development areas. The book eschews simplistic one-size fits all approaches to detail a dynamic capability that can be deployed across organizations of various sizes, industries and readiness.

The book’s foreword is also written by a major proponent of CPM – Gary Crittenden, CFO and EVP of American Express.

Optimizing Corporate Portfolio Management details how the CPM discipline can be applied to an entire company or specific functional areas including information technology, marketing/A&P, capital expenditure, R&D/innovation, salesforce and virtually any area grappling with where to invest discretionary investment dollars. Finally, Optimizing Corporate Portfolio Management demonstrates actual utilizations of CPM within several prominent and diverse organizations through case studies which help readers see firsthand how CPM is enabled, utilized and the benefits it imparts.

The book draws on portfolio management expert Anand Sanwal’s years of research and work in this area at American Express where he led the deployment of CPM across the entire company. The practice known as Investment Optimization within American Express is patent-pending. He has been a featured speaker on this topic to many individual companies and at many seminars and conferences held by the CFO Executive Board, Beyond Budgeting Roundtable, Gartner, Enterprise Portfolio Management Council and others. The discipline he has helped spearhead has also garnered several external awards for its significant and tangible impacts to American Express. His knowledge is further enhanced through best practices research and discussions with other leading organizations engaging in CPM.

Within this essential corporate portfolio management resource, Sanwal methodically covers CPM offering the following:

1. A description of Corporate Portfolio Management and its importance
2. A framework for CPM success
3. The seven and a half deadly sins of CPM
4. A detailed four step process to bring CPM to any organization
5. Utilizations of CPM within various functional areas including IT, Innovation/R&D, Marketing/A&P, Capital Budgeting/Capital Expenditure, Salesforce
6. Case studies of leading organizations using CPM including American Express, Hewlett Packard, Cisco Systems, TransUnion, State of Oregon: Department of Human Services
7. Several additional resources and tools available with the book and at http://www.corporateportfoliomanagement.org

Taking Corporate Portfolio Management beyond IT

I remain amazed at how the entire portfolio management discipline has become largely focused on enabling corporate portfolio management for IT investments. Granted, most organizations do struggle with their IT expenses. Many (most) do not even fully understand that these IT expenses are in fact investments, but this fixation on IT is a bit stifling - as it minimizes the impact that CPM can have on an organization.

Corporate Portfolio Management should be used for any area where discretionary expenditures and hence investments are occurring including advertising & promotion, innovation/R&D, operations, sales, IT, capital expenditures, etc. This means looking past just your capital expenditures but also looking at operating expenses which, today, maybe considered business as usual, but which in fact, can be highly discretionary.

Conversations with numerous companies shows that 25-40% of a company's operating expenses are in fact discretionary (industry dependent). While the added scrutiny will likely not appeal to people who've become used to a certain size treasure chest to play with, this huge percentage does underscore the massive opportunity organizations have before them if they can optimize their portfolio. For owners of these expense pools, CPM lets you articulate where you are spending your money from the lens of an investment - not as a discretionary expense that should be cut if and when the environment requires.

At American Express, we've defined anything that is not required to keep the machine running as an investment and so are able to introduce tweaks to our portfolio within and across business segments as well as functional areas. Why limit oneself to optimizing within one narrow mini-portfolio of the organization? Starting with a mini-portfolio might be the right way to start and pilot the concept of Corporate Portfolio Management, but ultimately, CPM is about thinking and achieving BIG.

I'd love to hear from those who've successfully introduced Corporate Portfolio Management to other areas of their organization and the successes and challenges you've faced. Also, if someone can articulate why IT seems to be receiving all the attention around CPM, that would be very useful to understand. It seems to me that this has been driven by the ecosystem of consultants and software vendors that have emerged, but I'd love to hear other insights and thoughts in this regard.

Changing Organizational Behavior at American Express - The First CPM Summit

We just concluded our first ever two-day Investment Optimization summit at American Express which my team in Corporate Planning & Analysis put together. And I'm happy to report it was a resounding success. As I've previously discussed, enabling CPM within any organization is as much about process as it is about organizational behavior.

And the summit was an attempt at impacting organizational behavior. Some of the highlights of the summit are as follows:

• Although the CPM effort at American Express is largely managed by the finance organization, we required that our business unit finance partners invite those from the business to the summit as it is the business people who are initiating and managing these investments. And so it is important to ensure that the initiative owners understand why we engage in CPM. As a result, attendees at the summit were 65% finance and 35% business.
• In an effort to not have the 2 days solely comprised of one speaker after another, there was a CPM simulation done over both days where the participants were given a fictitious company and different roles and had to determine how to allocate finite resources amongst competing investments. This drove home why CPM was important to the attendees and was cited as one of the highlights of the summit.
• Of course, there were several speakers including myself, a video address from the company's CFO, Gary Crittenden, and opening remarks by the SVP of Corporate Planning & Analysis. Additionally, individual business unit CPM practitioners shared their best practices on a variety of topics.
• Beyond the internal speakers, there were several external speakers including Professor Clark Gilbert of Harvard and the author of From Resource Allocation to Strategy who discussed the inherent link between a company's portfolio and strategy. We also had Professor Sunil Gupta of Columbia Business School who discussed valuing marketing investments and finally Steve Berez, a partner at Bain, who covered IT Portfolio Management.
• There was also an awards ceremony where we recognized those who have made CPM at American Express so successful.

Beyond the content and simulation, the company's investment in the summit was perhaps the greatest indication of the organization's serious interest in CPM's success. The other intangible benefit from the summit was the networking it enabled amongst the many CPM practitioners within the company.

If anyone is interested in learning more about American Express' CPM summit, please do drop me a line as I'd be happy to tell you more. Additionally, if others have found interesting and effective ways to impact organizational behavior when enabling a CPM discipline, please leave your thoughts and ideas with others reading this.

Corporate Portfolio Management blog begins...

Corporate Portfolio Management (CPM) - An increasingly important discipline. I hope to share some of my experiences, insights, ideas and questions about CPM through this blog, and more importantly, hope to encourage discussion amongst current and prospective practitioners of the CPM discipline. Of course, the many valuable (and sometimes not so valuable) insights of other practitioners and thought leaders will also be highlighted.

For those unfamiliar with the term CPM, let's start with a bit of a definition. CPM encapsulates several other more commonly known terms such as enterprise portfolio management or project portfolio management (PPM). By encapsulate, I mean that enterprise portfolio management and PPM are most-often associated with information technology (IT) while CPM is more expansive. CPM includes IT investments but also is a strategy & discipline that can be utilized to optimize decisions related any area where an organization is making discretionary investment including: marketing/advertising & promotion, salesforce, IT, R&D/innovation, capital expenditures, operations, etc. CPM looks at these discretionary projects but as investments which generate benefits - financial, strategic, risk, etc.

In terms of my background and expertise with CPM, I am currently a Vice President at American Express managing the organization's corporate portfolio management effort (known internally as Investment Optimization). Additionally, I head up American Express CFO's internal strategy and business analysis group. I've lead the development of the company's CPM effort which is patent-pending alongside numerous talented colleagues over the last several years.

Beyond efforts at American Express, I've had the opportunity to speak with numerous thought leaders within other organizations and think tanks about CPM who've really helped to evolve my thinking about CPM and the field overall. I hope some of them will contribute to this blog going forward and/or that I'll get the opportunity to share some of their insights with you over time.

I welcome your feedback, questions and ideas about this blog, and my hope is that will serve as a useful forum to spur dialogue, new ideas and greater interest in and realization of the power of CPM. Happy optimizing. Whether you agree or disagree with my viewpoints, I welcome and look forward to your feedback.