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The complete guide to portfolio management in 2023

According to the Project Management Institute , p ortfolio management is   “a way to bridge the gap between strategy and implementation .” 

In this article, we’ll define portfolio management, suggest some best practices, and show you how you can use monday PMO work management to support your organization’s success.

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What is a project portfolio?

A portfolio describes a grouping of projects, programs, or in some cases, both. Project portfolios are created to house and manage important information across these activities to provide collective oversight.

Think of a project portfolio as a single source of truth to make decisions about resource allocation, forecast performance, and risks, and as a north star for progress and alignment — especially as they relate to goals and strategy.

What is the process of portfolio management?

The process of portfolio management is the selection, prioritization, and control of an organization’s projects and programs. Such centralized management and oversight help establish a standard of governance across the organization.

Put plainly, project portfolio management assigns responsibility, so the organization always has a individual or a group of people closely monitoring the performance of the company’s project investments.

If a project is aligned with the company’s strategies, values, and long-term goals and it’s performing well, then it’s more likely to get funded and prioritized. If it’s risky, underperforming, or misaligned to the company’s greater strategy, then it’s probably going under the microscope to either pivot or get scrapped altogether. 

Building portfolio management into your organization puts you back in the driver’s seat, where you can make more educated decisions about how to effectively deliver against your strategy and take charge of your asset allocation.

Some everyday use cases for PPM are:

• Identifying potential project returns
• Forecasting risks
• Facilitating communication
• Obtaining stakeholder buy-in

What’s the difference between portfolio management, project management, and program management?

The relationship and hierarchy between portfolio, program, and project management can be described as the following:

• Project management typically involves managing temporary or unique endeavors focused on a specific product or service
• Program management entails a coordinated approach to managing related projects in a manner that aligns their connected objectives
• Portfolio management takes a group of projects and/or programs and manages these collectively as a group, ensuring they’re consistently aligned with the overall strategy

Simply put, projects are the building blocks that make up a program, while programs and individual projects combined form a portfolio.

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Why is project portfolio management important?

Like most project management processes, thoughtful portfolio management has more than one positive ripple effect on business value. Here are a few of the most important:

Strategic alignment

Portfolio management helps organizational and operations leaders see if other large projects are contributing and in line with high-level organizational goals and KPIs.

Reduced inefficiency

When all projects are mapped out in one place, it’s easier to see what is of the highest priority, what can be tabled, and so on. It also creates a track record for seeing how similar projects went in the past, so they can be better implemented in the future.

Risk management

Clarity into a project portfolio aids risk management by consolidating the most important components of projects in one place for evaluation.

Diversification

Having an easily accessible portfolio can also help someone like a PMO assess if the projects being prioritized for the organization have health diversity. Conversely, it can help them see if a project isn’t relevant.

Portfolio management best practices

Much like the day-to-day, portfolio management best practices will naturally vary. Nonetheless, there are tried and true methods that are applicable to most industries.

Perform a hands-on, detailed project inventory

Taking stock of all your projects provides a level of understanding that’s critical to effective portfolio management. Include the project’s title, timeline, estimated costs, business objectives, potential ROI, and how it benefits the business.

This way you can create an instant high-level overview with all the information required to provide investors with updates or make better on-the-spot decisions.

Evaluate projects through a strategic lens

It’s important to prioritize the projects that are most aligned with the company’s strategic objectives. Other factors to consider are how risky a project is and whether the project will involve massive reengineering.

Ultimately, a good portfolio manager will identify overlapping project proposals early and cut off any projects with poor business cases upfront, to ensure better alignment between management and stakeholders.

Prioritize, categorize, and fund projects

Once you’ve completed evaluating each project based on strategy alignment, you also will have to prioritize based on available funding and resources. 

A thorough scoring and categorization process can come in handy for this because it also helps you see how much work could be done down the line.

Thoroughly review and manage your portfolio

A first-rate evaluation and prioritization process won’t help if your portfolio isn’t actively managed after creating the approved project list.

A platform like monday PMO work management streamlines this process by allowing you to oversee the status of each project on a data-driven, yet beautifully designed dashboard.

At a minimum, portfolio managers should be monitoring asset performance at a quarterly level but to truly excel, this should occur more frequently.

During the review process, portfolio managers and stakeholders will often meet to discuss which initiatives require and are worthy of additional funding, which ones to pause, and which to stop altogether.

Portfolio management challenges

Portfolio management is highly effective, but it requires serious commitment. Here are 5 major challenges.

1. Having a cohesive relationship between managers & stakeholders

Both the portfolio management team and stakeholders have unique motivations and priorities that need to work in tangent. Managing the engagement between the two isn’t always smooth sailing, as investment decisions are scrutinized.

It takes dedication from the bottom to the top and as much transparency as possible to keep projects on course and relationships intact.

2. Time & resource management

Understanding how much time, capacity, and resources like budget are available across many initiative is tough. On monday PMO work management, you can use a Workload View and Timeline View to provide clear insights.

3. Data visibility

For efficient porfolio management, you need to be able to import and customize the way you or stakeholders see relevant project data.

monday PMO work management lets you use widgets to create custom dashboards — you can set up automations to routinely send reports out. You can also add more than one dashboard view on a board, built exactly how you need it.

4. Inability to operationalize & scale

As your project portfolio grows, it’s safe to say that you need a work management platform that can keep up and cut down on manual work. Excel sheets and email can’t offer automation, calculations, communication, and more all in the same place — which can slow down or prevent organizations from expanding their portfolios.

5. Macroeconomic risks

Even the most perfect portfolio management can be negatively impacted by factors out of an organization’s control, like an economic downturn. However, having an effective platform and system in place can help you make better financial decisions before, during, and after a crisis or slow time.

Read: What is work management

Why you need a portfolio management platform

Keeping track of project status, funding, investment rounds, ownership, and communication is hard enough when people and resources are stretched or limited. Without a portfolio management platform, you might as well be making educated guesses that occasionally meet their mark.

The best tool is one that also considers your project managers’ needs since their data needs to trickle up to higher-level portfolio managers and their corresponding boards and dashboards.

A solution that eliminates manual data transfers or excessive status update meetings should be what you aim for, with the aim of improving your overall processes, impact, and keeping your sanity.

monday PMO work management lets you do that.

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How can monday Work Management help with portfolio management?

monday PMO work management is perfectly suited for top-notch portfolio management. Its features and customization options help you and your managers see the big picture so they can easily detect bottlenecks and problems by pulling data from all projects across different programs into one high-level view.

Investing in monday.com checks off all the best practices, as it allows you to:

• Perform a hands-on, detailed project inventory with a portfolio management board. This board provides a high-level overview that’s easily connected to a more granular project view that your project managers keep up to date.
• Evaluate projects through a strategic lens with custom columns that make it easier to track funding rounds, funding status, resources invested, estimated current value, and last evaluation.
• Prioritize, categorize, and fund projects based on custom columns that show priority and custom project scoring.
• Thoroughly review and manage your portfolio with custom dashboards that provide a snapshot of the overall profitability and health of the portfolio.

The ability to assign ownership to individual tasks, so that you always have a go-to person, provides greater insight into performance and makes it easy to manage any potential risk as they arise.

Check out monday work management pricing here.

Does monday work management have a portfolio view?

monday work management offers many different options to help you get a high-level overview of projects across teams and departments. Our dashboard view is a customizable location where you can choose custom widgets to stay on top of things like budget, project phases, and more across project boards.

What is the goal of project portfolio management vs project management?

The goal of project portfolio management is to stay on top of project data across departments, teams, and more in order to optimize things like efficiency, resources, and budgets. Project management’s goal is to plan, track, execute, and monitor activities in stages in order to achieve a goal and produce a certain outcome.

What features does a good project portfolio management tool offer?

• Budgeting and reporting
• Seamless, in-platform communication
• Automations
• Import & export
• Enterprise-level security

• Project management |

Project portfolio management 101

Project portfolio management helps you organize data and highlight crucial information during project life cycles inside each portfolio, which saves time and increases efficiency. In this article, learn how you and top-level executives can get a bird’s-eye view of all your business project life cycles and remove barriers to high-level performance.

If you manage various initiatives over different teams and departments, you know how hard capturing and sharing results can be. 

Project management tools offer a way to organize and execute work for one initiative, but you need project portfolio management to gain clarity across teams and departments.

Your team needs structure and your stakeholders need to see results. Project portfolio management is the brain of the operation. This organizational model helps you organize data and highlight important details during project life cycles within each portfolio.

What is project portfolio management (PPM)?

The value of PPM is in uncovering and selecting projects that offer the best return on investment. Then, follow up by implementing the resources necessary to take them on.

Project portfolio management vs. project management

Both project management and portfolio management are subsets of work management , which is a systematic approach to coordinating work throughout your organization—from projects and ongoing processes to routine tasks—to drive clarity.

Project management is ideal for:

Planning, managing, and executing one specific initiative

Team collaboration for one project

Assigning roles and responsibilities for the project team

Task management

Project portfolio management is great for:

Managing multiple projects and large-scale initiatives

Coordinating across cross-functional teams

Assessing the right projects for your organization and resources

Organizing and tracking your team’s priorities

Easily visualizing progress across initiatives for executive stakeholders

Clearly defining and connecting daily work to strategic objectives

Staying on top of business goals

Risk management and mitigation

Why is project portfolio management important?

Project portfolio management acts as a gatekeeper between your team’s time and the influx of potential projects. The goal is to assess which projects will generate the highest return on investment and which are aligned with the business’s objectives. 

Without the oversight of project portfolio management, your team may take on too many projects simultaneously. This can result from improper resource allocation or a disorganized project manager—no matter the cause, it quickly becomes a bad example of portfolio management. 

Instead, think of PPM as your personal mission control dashboard. It keeps everything accessible so the quality of work stays high and each team can hit their goals.

In short, project portfolio management keeps your business agile.

What industries benefit from project portfolio management?

Project portfolio management frees up time and improves efficiency across teams. When your company manages different projects simultaneously, staying organized is non-negotiable. Project portfolio management is not geared toward any specific industry—if your company handles multiple projects, your team will benefit from it.

Popular industries that use this resource include:

Information technology

IT teams often have large budgets with smaller teams. Keeping an eye on your team’s workflow prevents error and over-utilization. Keep tasks on time and use data to drive profitability.

Marketing teams often need their attention on many moving pieces. From e-commerce to websites—there is a lot to keep track of. Keeping the pulse on the company’s objectives as a whole rather than one piece of the puzzle makes project portfolio management ideal.

Construction

Construction industry benefits tremendously from project portfolio management. Throughout each step in a construction worker's job, it takes meticulous planning. Over the project life cycle, a lot can change as well. Project portfolio management supports the team while keeping an eye on the whole picture.

Financial services

Precision is the cornerstone of the financial services industry. There is no room for error between banks, credit unions, and credit card companies. Adapting and utilizing project portfolio management ensures that quotas are met, documents are accounted for, and teams are equipped with the tools necessary to get the job done right.

Portfolio manager responsibilities—and other PPM roles

Just like project management, there are some key PPM roles and responsibilities. With these roles, you can ensure everyone understands their responsibilities within the project team and every other team member. 

The project portfolio manager

As you might expect, the project portfolio manager is the person creating and managing the project portfolio. 

As the project portfolio manager, you may not be the project manager for every project within your portfolio—but it’s your job to ensure the projects within your portfolio are up to date and have relevant recent status updates. You are responsible for keeping tabs on each project life cycle and providing support where needed.  Plan to check in frequently with individual project managers to develop a cadence for project status reporting .

The executive stakeholders

Executive stakeholders are any team members or company executives who need a high-level view of what’s happening across the portfolio’s initiatives. For example, if you’re managing a team within the marketing department, the CMO or head of marketing might be an executive stakeholder in your portfolio.

The program manager

A program manager has a similar role to a project portfolio manager. The main difference between the two roles and management techniques is that a program manager is in charge of related projects, while a project portfolio manager might not be. 

For example, a program manager might manage multiple projects related to a specific product marketing launch. In contrast, a project portfolio manager would manage multiple projects within the marketing department, which might not be directly connected.

The project manager

Yes, there are still project managers in project portfolio management! Project managers can own individual projects within the larger portfolio. Depending on the size and scope of the portfolio, some projects may also be owned and managed by the project portfolio manager.

The project team members

Everyone working on the projects in the portfolio is part of the project team. Your project team may be a cross-functional group of members from various departments within your company, or they could be traditional team members. The main difference between a “project team” and a “team” is that a project team is a group that works together for the duration of a project before disbanding.

The benefits of project portfolio management

Project portfolio management is part of a larger system of work: work management . When used correctly, PPM helps you and relevant project stakeholders get a bird’s-eye view to make better strategic decisions. Teams that use project portfolio management software benefit from:

Increased visibility

More alignment

High-level, holistic planning

At-a-glance insight

More time for creative and strategic work

Real-time project progress

Quicker decision-making

Project data automation

Gain clear reasoning for project methodology

To get the best results from project portfolio management software , you need a tool that keeps your strategy and daily to-dos connected, provides a quick overview, and updates in real-time. 

There are three must-have project portfolio management software features:

Real-time project status updates

One principal value of project portfolio management is the ability to get an overview of the progress of every project within the portfolio. To do so, ensure your project portfolio management tool offers reporting features at both the project and portfolio levels. That way, executive stakeholders can get at-a-glance insight at the portfolio level, then drill down into any project-specific status updates where necessary.

Timeline and dependency tracking

Because a portfolio consists of many complex projects, make sure your project portfolio management software offers a way to view the timeline of each. You should be able to view any dependencies and adjust if something is off. With a Gantt chart-like view , you can identify key milestones and dates for every project and ensure things are moving smoothly.

Workload management

Workload management can help you develop and track your resource management plan . With workload management tools , you clearly understand your project team's responsibilities and deliverables across all of the projects within the portfolio. 

If you need to change or optimize your resource management plan, you can visualize who has the bandwidth and who is close to burnout on the team.

Project portfolio management best practices

Project portfolio management works best when you maintain an updated, real-time portfolio. As the project portfolio manager, it’s your job to check in with the individual project managers regularly and confirm their projects’ data is accurate. That way, you and any executive stakeholders can home in on any at-risk or off-track projects and course-correct while ensuring on-track projects are accurately aligned with your company’s strategic objectives.

Project portfolio management processes

Many moving pieces go into the project portfolio management process. It is a continuous effort that requires careful planning to identify, track, and manage projects. The focus is to always deliver high-quality projects that are aligned with business objectives. 

To get started with PPM, follow these five steps:

Step 1: Align your portfolio to business objectives

PPM can help you connect daily work to strategic objectives—but for you to do that most effectively, you need to know what strategic objectives you’re connecting to. 

If your company sets yearly or quarterly goals, you may have various objectives ranging from revenue goals to churn reduction targets. Clarify which strategic goals or OKRs your portfolio is contributing to and how.

Key takeaway: Determine how your project portfolio will support specific company goals.

Step 2: Add projects

Your portfolio should include all relevant projects. Make sure you add the right projects and prioritize them in order of importance, if applicable. As the project portfolio manager, take some time to connect with the individual project managers to align on how each project in the portfolio connects to your strategic goals. Finally, confirm there are no related projects that you haven’t included in your portfolio.

Key takeaway: Organize your portfolio by adding projects important to your overall business strategy. Communicate with project managers and explain how their projects contribute to the greater plan.

Step 3: Share your portfolio with executive stakeholders

A portfolio is a tool to help you align with your project managers and better prioritize project work. It also provides executive stakeholders with a dashboard of all initiatives across your department. Make sure they have easy access to your PPM software. When executives get real-time insight into project progress, they’re empowered to make better decisions.

Key takeaway: Keep stakeholders informed by sharing an overview of initiatives.

Step 4: Get real-time project updates

Make sure your project managers regularly update their individual projects. That way, your portfolio becomes your team’s mission control for all initiatives. You can see these in one place to better visualize dependencies, identify new project opportunities, and help projects at risk.

Key takeaway: Keep your team accountable for updating projects regularly, so your overview accurately represents project workflows.

Step 5: Use your portfolio for resource management

In addition to helping you and key stakeholders stay up to date on project progress, a portfolio is a powerful tool for resource management.

During the project planning stage of each project, you’ll likely have created a resource management plan . But, if you see a project falling off track from your portfolio overview, you can redistribute available resources across projects to address that issue.

Ensure your PPM software offers workload management tools to increase resource allocation and redistribution visibility.

Key takeaway: Use project portfolio management software that monitors project timelines and dependencies . This allows you to prioritize and allocate resources effectively. 

The best tools for project portfolio management

Project portfolio management is a vital component of business planning that enables project managers to estimate a project's potential revenue before it even begins. Before making any pivotal decisions, businesses may put the pieces of a project together with the help of a PPM tool. 

Here are a few of the best:

Decision tree analysis

A decision tree is a flowchart that begins with a single central concept and branches out according to the outcomes of potential choices. The model often resembles a tree with branches, hence the term "decision tree."

These trees are employed in decision tree analysis, illustrating a difficult decision's probable results, expenses, and effects.

Cost-benefit analysis

A cost-benefit analysis enables you to assess the financial benefits of a choice so you can evaluate whether it is worthwhile to proceed with it. It's a helpful tool when you want to prevent bias in your decision-making process, particularly when you have to make a significant choice that will affect the success of your team or project.

Priority matrix

A priority matrix classifies tasks or projects according to criteria, such as effort and urgency, and allows team members to rapidly decide what to tackle first. It takes the guesswork out of where energy should be allocated and prevents important tasks from slipping through the cracks.

See the big picture with project portfolio management

PPM is the best way to collaborate with and across your team. Get a bird’s-eye view of all your initiatives in one place to track the right metrics in the right place.

Ready to try project portfolio management? Learn more about Asana Portfolios to help you effortlessly connect all of your initiatives in one place.

Related resources

Marketing project management: How to structure your strategy

Project management software and tools: Your best picks for 2023

SWOT analysis: What it is and how to use it (with examples)

SMART Goals: How To Write Them and Why They Matter

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Insights / Information Technology / Article

6 step action plan for effective portfolio management.

May 07, 2021

Contributor: Ashutosh Gupta

To remain relevant and deliver value in the evolving digital landscape, PPM leaders need to evolve portfolio management. Here are six best practices.

When a portfolio is managed effectively, it delivers the right initiatives at the right time to achieve the expected outcomes. Project and portfolio (PPM) leaders can keep up with digital business demands by choosing the right portfolio management style and having a crisp action plan in place.   

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“The push to digital business means that the traditional style of portfolio management may now be inadequate,” says Anthony Henderson , Senior Director Analyst, Gartner. “Siloed portfolios can’t work in isolation to provide the organization with a true picture of performance. It helps to optimize the value of all major initiatives in the organization — and that requires integrated portfolio management.” 

Here are the six practices for effective portfolio management:

No 1: Ensure visibility into work and constraints

For improving a portfolio’s performance , it’s essential to proactively identify and remove constraints. It can happen if there are no silos and the product teams operate in an environment that provides clear visibility into who is doing what, and what is getting delivered when.

With that insight, PPM leaders can easily determine the interdependencies and risks. They can transparently prioritize and allocate the work so that there are no negative impacts to the portfolio. 

No 2: Prioritize around customers’ expectations 

Digitalization has led to ever-growing customer expectations. The increased dynamics encourage organizations to implement new ideas and initiatives. Given the budgetary constraints, prioritization becomes all the more important . Without a well-thought-out portfolio prioritization approach focused on customer objectives, organizations may end up investing in less-promising initiatives.

Defining internal and external customers is paramount. They may have mutually exclusive or overlapping goals or demands across various lines of business. From this mix, it is important to identify the initiatives that matter most to them. 

Stakeholders from different functions can form an investment committee to zero in on the most valuable ideas. Having a cross-functional understanding can help them make unbiased investment decisions that align with strategic goals and optimize limited resources.

No. 3: Apply adaptive resource management

The increasing use of agile methodologies in conjunction with other waterfall and hybrid approaches presents a significant challenge for resource management.

Digital business runs on flexibility, not rigid planning practices. An adaptive approach focuses on allocating resources as per market shifts and changing customer needs. It’s about creating an environment where resources can seamlessly switch between initiatives to deliver optimum value. For this to happen, it is essential to:

• Recognize and manage the interdependent risks
• Negotiate the competing priorities
• Identify impediments to strategic coordination across groups

No. 4: Deliver value continuously 

Every portfolio promises value, and therefore, engaging sponsors consistently and effectively becomes critical to assess whether that promise is being delivered or the portfolio is becoming irrelevant. 

For a dynamic digital business, it’s a good practice to have weekly meetings at which product managers and sponsors can discuss the previous week’s deliverables, ongoing tasks, resource availability, and existing risks or roadblocks. 

This way, the involved parties can keep track of the portfolio’s health and realign it with value, if required.

Read More: Extending the Project and Product Ecosystem to Lean Portfolio Management

No. 5: Create a change-enabled culture

Digital transformation leads to increased changes in business and technology processes, which can have unintended consequences and affect the experience of customers and employees. 

It’s essential, then, to know how to handle change productively and how much change is too much change.

The key components of a change-enabled culture are:

• Feedback and communication channels involving business leaders, managers and end users
• Engagement with change champions at multiple levels
• Executive confirmed roadmap for change

No. 6: Realize benefits continuously 

As digital business evolves, effective portfolio management and measuring results are more crucial than ever. Organizations expect faster results and benefits must be viewed as incremental units of value delivered in a continuous stream. A dedicated owner should be in place to track the actual benefits realized.

Organizations will get better at portfolio management by making informed future decisions based on prior mistakes. If they fail to realize the expected benefits, then they can revisit business assumptions and ask these questions:

• Did they understand customer needs?
• Did the market conditions change?
• Did they overestimate value?
• Did they know the risks and complexities involved?

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Recommended resources for Gartner clients*:

6 Practices for Effective Portfolio Management

3 Steps to Managing Distributed Portfolios in an Increasingly Digital World

How PPM Leaders Can Help Resource Management in Product Teams

Use Adaptive Governance Styles for Portfolio Management

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Project Portfolio Management (PPM): Key Elements, Benefits and Best Practices

As project-driven companies succeed and grow, they often struggle to select the projects that best align with their overarching business objectives. Executive leadership grapples with prioritizing projects, maximizing capital and human resources, and supporting optimal efficiency. However, all this can be achieved by turning to project portfolio management (PPM).

What Is Project Portfolio Management (PPM)?

Project portfolio management (PPM) is a strategy that evaluates potential projects by their prospective successes and risks, then designates staff, resources, and timelines in a way that maximizes organizational performance.

Consider this analogy: PPM is like managing a financial portfolio that’s meant to produce enough funds to pay for a child’s college tuition in 10 years. One portfolio may consist of several accounts. And each account might have a different investment profile — some leaning toward equity and others toward short- and long-term gains. The portfolio manager’s job is to select the perfect combination of investments and manage them so that they meet the 10-year goal.

Similarly, your organization’s project portfolio might consist of sub-portfolios, programs, and/or projects.

Learn more about EcoSys for Project Portfolio Management

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Why is Project Portfolio Management Important?

Regardless of what your portfolio looks like, PPM is critical, because it helps you and your team keep an eye on big-picture objectives .

Focusing on individual projects increases the risk of raising overhead and leads to reduced ROI. However, by centralizing the management of projects as a portfolio, you can focus efforts on the right projects at the right time.

Further, a centralized approach provides managers with a strong foundation to deliver successful projects — and it all starts with a solid PPM process.

The Project Portfolio Management Process

The PPM process is continuous and cyclical. The ongoing practice allows teams to react to sudden changes while mitigating any challenges that might affect overall project success. The process fosters better decision-making to drive achievement of company goals. Though the PPM process is fluid in nature, it is structured within three distinct phases..

Though the process is malleable, it does consist of distinct phases.

Portfolio Management Lifecycle

The Project Management Institute (PMI) defines three phases to the portfolio lifecycle or process: plan, authorize, and monitor and control. PMI further classifies these three phases into two groups: the aligning process group and the monitoring and controlling process group.

Here is a high-level look at each group.

Aligning Process Group

The aligning process group covers how projects are selected, introduced, and classified. It also should include up-to-date information on how projects align with strategic goals and current operational rules. This approach allows individual projects to be evaluated, while the portfolio is managed as a whole.

This group is most active when an organization refreshes its strategic goals and sets organizational budgets and plans. It could happen annually, quarterly, or more frequently, depending on the organization.

Monitoring and Controlling Process Group

The monitoring and controlling process group reviews performance indicators and monitors alignment with strategic objectives. It ensures the whole portfolio performs to predefined metrics set by the organization. Such metrics might include ROI or net present value, for example. The metrics could also monitor performance by category or as an aggregate. Sometimes even individual portfolio components are tracked.

Project Portfolio Management Steps

The PPM process consists of five steps that ensure high-level alignment remains both across the portfolio and throughout the PPM lifecycle.

• Determine business objectives. In order to settle on the projects that work for your organization, teams need to be on the same page. One of the most popular ways to create that alignment is to develop a strategy map that outlines exactly what the business objectives are and how team members should prioritize them.
• Collect and research information on potential projects. Compile a list of ideas for potential projects and research those ideas. Some sources of inspiration might include ideas from team members, customer feedback, or particular regulatory requirements. Then put together some high-level details on those ideas, like potential resource requirements.
• Narrow your list and select the best projects. The high-level data from the previous step will give you the tools to choose the projects that best align with your business objectives . Use that data to define a projects’ differentiators and craft a tentative portfolio that will likely maximize your return while balancing risk.
• Validate portfolio feasibility and initiate projects. Next, you’ll need to validate the portfolio of projects against their feasibility and available resources. Expand on the high-level data that’s already been collected and create a more realistic picture of the resources necessary to complete a project and what potential setbacks might be. If the project still seems feasible, you can commit resources and move forward.
• Manage and monitor the portfolio. Once projects begin, you and your team will need to manage them, keeping an eye on performance and recalibrating as necessary. That might mean handling issues like re-scoping, reallocating resources, and regularly reviewing the portfolio as a whole.

Key How-to Elements of Project Portfolio Management

While the steps listed above seem simple, it can be challenging for an organization to both implement and manage the PPM lifecycle. To begin your PPM journey, you’ll need to ask the right questions and arm yourself with the right tools.

Ask the Right Questions

Though the association between organizational strategy and projects is most often considered at the start of the portfolio planning process, it can’t be just a one-time consideration. It must undergo a continuous process of evaluation and scrutiny.

Regardless of when that relationship is front-of-mind, asking the right questions will help you to steer each decision in the right direction:

• Does the project align with your business objectives?
• Is this the most strategic time to begin this project?
• How will the project bring value to the organization?
• Is the push for the project internal (org-driven) or external (customer-driven)?
• How does the project rank in the priority list? Is it urgent or just a nice-to-have?
• Does the project have any redundancies? Are there other internal projects trying to achieve similar things? If yes, how can they combine or complement each other?
• Can one project serve as a template for another?
• Are resources, such as time, budget, and skilled labor, available for execution?
• Will resources need to be taken from other projects currently in progress? How will this affect them?
• Can the stakeholders’ expectations be managed and achieved?
• How can you foster clear and consistent communication to ensure stakeholders are aligned throughout planning and execution?
• What are the key performance indicators (KPIs) that you will measure the project’s success against? What are the KPIs that will indicate the project’s impact on the portfolio? Are different measures needed at the portfolio level?

These questions paired with a project portfolio management approach will help your organization adopt a more well-rounded view toward projects.

Other Project Portfolio Management Tools and Techniques

Aside from asking critical questions, there are other PPM techniques that provide a structured way to evaluate, select, and prioritize aspects of the aligning process group in the portfolio management lifecycle.

Here is a quick introduction to five such PPM tools and techniques:

• Cost/benefit analysis: A ratio used to evaluate the risk versus reward in any project. The lower the cost and higher the benefit, the more likely a project is to succeed.
• Decision tree analysis: A visual tool for qualitative analysis that is ideally suited to evaluate scenarios affected by many subjective factors. PPM tools set up hypothetical scenarios and provide a basis for evaluating possible outcomes.
• Scoring model: An analytical technique that bridges quantitative and qualitative factors of a decision with weights and scores. The technique creates a rational basis to prioritize projects with the highest scores.
• Estimated commercial value (ECV): ECV incorporates risk into a formula similar to Net Present Value (NPV) to evaluate the probabilities of success for commercial and technical projects.
• Objectives matrix: This method splits the high-level organizational strategy into multiple business objectives and assigns scores for projects as they align to each objective. The matrix allows for sub-goals to be factored in to create a nuanced way to evaluate projects against objectives.

Choose the Right PPM Tool

Just as important to the PPM process as asking the right questions and using the right techniques is selecting an excellent PPM tool.

The PPM tool you select should not only provide you with greater visibility into your portfolio, but also enable the people and processes involved. In this way, the software solution allows you to select projects that align with your company’s objectives, supports the long- and short-term budgeting processes, and helps your employees to better manage complexity. The right PPM tool will also ensure that projects match priorities and provide a feedback loop once projects are started.

Some of the must-have attributes and functions for PPM software include:

• Strategic planning
• Capital planning
• Opportunity management
• Project development
• Resource management
• Portfolio analysis and reporting
• Stage gates and automated workflows

The data that comes from these functions gives you real-time, objective insights into what’s happening across projects. It allows you to make informed decisions by evaluating “what-if” scenarios like:

• What would happen if a particular project is cancelled?
• How would a three-week delay in this project affect resources for another project?
• What would be the impact of sharing a resource across projects?
• How would next year’s roadmap be impacted if the budget was increased by 10% this year?

A robust PPM tool with an intuitive user interface offers a quick way to evaluate these questions and more.

For asset-intensive industries that operate huge, complex facilities (e.g., Power & Utilities, Oil & Gas, Transportation), much of their project portfolios and the funding for them revolve around ensuring optimal asset performance over time. AIP is the practice of using data generated by your assets to inform long-term decision making and investment planning. The benefits of effective AIP are improved asset performance, reduced operating costs, and enhanced maintenance planning. Tied to your PPM approach, the AIP process is supplemented with a complete view of portfolio data. You can optimize the possible scenarios and combinations of projects to determine the best investment plan for years to come. Because of this, your portfolio manager is empowered with a full picture of asset requirements and can take action to ensure peak asset planning and care, resulting in enhanced performance.

Project Portfolio Management vs. Project Management

Though it may seem like PPM and project management are interchangeable, there are some important differences. Project management, and thus project managers, focus on “doing projects right.” PPM and portfolio managers, on the other hand, focus on “doing the right projects.”

To expand on this, PPM concerns itself with the big picture and how all of an organization’s projects collectively work toward meeting strategic and ROI goals. For example, project management might focus on ensuring the right people are on the right tasks for a particular project. PPM, though, looks at how any particular project fits into a portfolio and ensures the portfolio is performing well.

The Role of the Project Portfolio Manager

The primary role of a project portfolio manager is to merge the company’s business strategy with project implementation. Unlike a project manager, a portfolio manager is focused on project selection rather than task breakdown. In other words, a project portfolio manager is concerned about the “what” and “which,” while a project manager takes care of the “how.”

At its core, the role of the portfolio manager is to understand the organization’s constraints that impact the project. Examples include budget, time, infrastructure, and people. These constraints, along with the organization’s strategic objectives, will guide the portfolio manager in their selection of projects. Every project they select will require an investment of time, money, and other limited resources. A portfolio manager’s effectiveness will be determined by their ability to collaborate with the organization and individual project teams.

The responsibilities of a project portfolio manager include:

• Project request management
• Resource allocation and management
• Risk management
• Identify and reduce inefficiencies
• Collaborate with senior stakeholders
• Change management
• Tracking business ROI of projects

Benefits of PPM

Good PPM practices add depth and maturity to organizations by introducing a harmonized approach to managing projects at scale. They have both quantitative and qualitative benefits, positioning them at the fulcrum of successful project executions.

According to a PMI report, organizations with mature PPM practices successfully complete 35% more of their programs , fail less often, and waste less money. All of these benefits also indirectly result in improved customer satisfaction.

PPM brings with it an array of other benefits . Decision-making can more easily focus on facts over subjective factors, particularly when an organization is working toward something big, like adjusting to impending regulatory changes. PPM allows you to step back and think about how the necessary adjustments will impact the risk and reward of projects, and whether it changes the overall calculus for inclusion in the portfolio:

• Do the changes impact how the project aligns with the organizational goals?
• Do the regulations have a long- or short-term impact? When do they begin? Will the regulations be in effect for the foreseeable future, or do they seem to be temporary?
• How will the new regulations impact the project’s workflow and timeline?
• What follow-up needs will this create, such as training or change management?
• What costs are associated with implementing the necessary adjustments and does that impact the business case?
• PPM can help analyze the decision, as well as mitigate risks.

Furthermore, PPM facilitates a collaborative rather than a competitive environment within the organization, which actually improves resource efficiency. If internal departments don’t have to compete for IT engineers, for example, in order to accomplish the same goal, it frees up resources to focus on other objectives, such as improving customer service or ROI.

Project Portfolio Management Best Practices

PPM has many sub-disciplines and its implementation can differ from one organization to another. While some might emphasize resource management, others might prefer continuous visibility into projects.

Here is our list of best practices to guide you through your PPM journey:

• Understand the business strategy: As PPM is all about aligning projects with a business strategy, it’s important to first understand that strategy and how it changes. For example, if the primary objective changes from increasing productivity in specific global markets to focusing on product innovation, PPM priorities must shift as well.
• Identify the right set of projects: Often, companies mistake activity with forward progress. A wrong project executed flawlessly is still a failure, as it does not move the company forward in the strategic direction.
• Establish a Project Management Office (PMO): Creating a PMO to handle PPM activities formalizes the processes and empowers staff. It reflects the support of senior executives in the PPM approach.
• Create standards for project evaluation: As projects get tossed around for evaluation, it’s essential to create common criteria and a checklist of metrics to score them against. This is the only way to make an apples-to-apples comparison.
• Formulate a risk management strategy: Portfolio managers can reduce risk by performing a risk-versus-reward analysis using PPM models, such as cost-benefit analysis and ECV, and investing in projects that yield maximum returns.
• Formulate a change management strategy: Change is the only constant. Markets change, technologies evolve, and customers revise requirements. A change management strategy anticipates all of these. When carefully selected, metrics can trigger the notifications that drive appropriate and timely responses to unforeseen changes.
• Use a PPM tool: The complexities of PPM can be simplified through software that can help integrate tactical project controls with strategic project selection. Tools like EcoSys Enterprise Project Performance software helps portfolio managers make the most of PPM and easily monitor portfolio KPIs.

Project Portfolio Management Software

When executed well, project portfolio management can be vital to the successful growth of any company or organization. It establishes a structure for evaluating and selecting a portfolio of projects, fluidly monitoring them through dynamic change, and guiding them with right-sized controls to completion. Software tools vastly simplify the complexity of the process, particularly when that process is a collaborative effort.

When choosing the right PPM software for your business, it’s imperative that you seek out a vendor that has experience within the project industry. With this knowledge, they’ll be able to understand your business goals and help you reach them. Your vendor ideally functions as a true partner, helping prepare you and your team as you enter a new way of operating. Although change is to be expected when taking on a new tool, implementation of PPM software usually comes when organizations reach a crossroads as their success almost becomes too much to handle. So, the changes that come along with using PPM software will alleviate project stress and support and accelerate future growth.

Evolving Maturity

In a 2018 PMI report, only 30% of respondents say they had reached a high level of portfolio management maturity. While most organizations are familiar with and even practice PPM, not everyone uses it to its full potential.

For example, are resources managed well? Are the PPM processes continuous and adaptable? Is there a portfolio-centric culture in the organization? Are there effective tools that bolster the process? Performing a gap analysis will help reveal the steps needed to take this maturity model further .

To be effective, your PPM should have consistent, reliable collaboration from the entire organization — from the C-suite down. To have a positive impact on profitability, it should provide transparency into key metrics and financial aspects of projects. The objective should be to avoid competition and organizational siloing. PPM will put everyone on a path toward collaboration to attain the strategic goals of the organization.

Visit these additional resources for more information on PPM:

• Solutions: Project Portfolio Management
• Products: EcoSys Enterprise Project Performance Software
• Blog: How to Optimize Project Portfolio Management , Benefits of Construction Project Portfolio Management , What is the Portfolio Management Lifecycle?

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What Is Project Portfolio Management (PPM)?

• 1.  Project Management Basics
• 2.  Project Management Methodologies
• 3.  Project Management Life Cycle
• 4.  Project Management Software
• 5.  Team Collaboration Tips
• 6.  Agile Methodology Basics
• 7.  Agile Project Management Tools & Techniques
• 8.  Project Management Frameworks
• 9.  Resources
• 10.  Glossary
• Advanced Terminology
• Methodologies
• PM Software Features
• Basic Terminology
• Professional Development
• Agile Project Management

Project portfolio management (PPM) is the centralized management of an organization's projects. While these projects may or may not be related, they are managed under one umbrella (called a portfolio) to oversee and manage any competing resources. Portfolio management in project management also involves the intake process of projects. This includes identifying potential projects, authorizing them, assigning project managers, and including them in the overall portfolio. It also includes high-level controls and monitoring to ensure ongoing projects are directly related to the business's overall goals and strategies.

Why project portfolio management is important

According to the Project Management Institute , "portfolio management is a way to bridge the gap between strategy and implementation." The portfolio manager's job is to ensure the right projects are being done at the right time to maximize the company's investment. This is particularly important in an organization with a lot of internal projects.

Ideas for projects can come from anywhere, at any time, and it's common for a business to have a long list of potential projects to complete. However, there usually is not enough time, money, or resources to do them all right away. Project portfolio management is necessary to understand which projects will have the largest beneficial impact on the company and prioritize them accordingly.

What types of industries and companies benefit from project portfolio management?

According to research by PM Solutions , 71% of companies have a project portfolio management system. PPM’s growth is evident in the rising number of companies adopting project portfolio management solutions.

However, what kind of companies can benefit from PPM? Project portfolio management is a must-have for any company that has several projects going on simultaneously, such as:

Information technology teams are typically smaller with highly specialized talent and bigger budgets. Resource profiling can be done to update skills inventory and appropriately meet peak demand periods. Use data-driven forecasting to assign the team to value-creating projects. Meet project demands successfully without under or over-burdening the team.

Construction

Often, companies lose focus on their overall goals in the chaos of managing more minor details. For example, large construction projects can take months and even years to complete. Many things may change during that time.

Decreasing project finances, ever-changing stakeholder needs, or the exit of key project personnel can quickly change project dynamics. However, project portfolio management helps keep the focus on the big picture and supports the construction team to keep moving toward its goals.

Financial services

Accuracy is the bedrock of financial services companies such as credit unions, banks, and credit card firms that process payments and manage money. Employing portfolio project management solutions helps companies set up performance thresholds, adapt to changing trends, and gather real-time metrics to meet project objectives.

Project management teams

According to Wellingtone’s State of Project Management report , only 29% of companies complete projects on time. Using project portfolio solutions can be an effective method for minimizing unforeseen delays, mitigating risks , and sequencing projects for maximum success. As a result, stakeholders get more visibility into project prioritization and can understand project value better.

Professional services teams

Professional services teams have different needs based on their size. Smaller companies tend to have fewer projects with smaller budgets, while the larger companies have multiple projects running simultaneously. With a standardized system of workflows and realistic budget estimates, teams can complete their projects faster while minimizing project risks.

Marketing teams

Marketing teams have multiple projects with greatly varying needs. For example, one project may focus on tapping into a new region, while another may be involved in gaining market share in an online marketplace. Marketing teams need to prioritize initiatives that move the overall business goals forward instead of an individual project.

Benefits of project portfolio management

By leveraging the benefits of project portfolio management, companies can plan out all the pieces of their project to get the best results. The main advantages of project portfolio management are:

Provides alignment between company objectives and projects

A PMI survey found that a lack of clearly defined goals is the first reason for project failure. Project portfolio management promotes transparent and open discussions amongst the team with a company-first attitude.

Takes the personal bias out of project planning

With PPM, there are no “pet projects.” Subjectivity in project planning is eliminated as PPM focuses on prioritizing projects based on their inherent risk, business goals, resource, and skill availability. Multiple qualitative and quantitative techniques such as ranking models and scoring methods are used to make project decisions.

Makes decision-making easier

Stakeholders may struggle to manage disputes that can arise with different project teams focusing on their priorities and vying for limited resources . By employing a standardized approach to decision-making, PPM subjectively evaluates the demand from competing project teams .

Helps prioritize projects

Good project portfolio managers focus their limited resources on their most valuable projects . When customer requests, regulatory requirements, or strategy demands arise, teams use project portfolio management to work on viable projects that help achieve organizational goals.

Focuses on the big picture

Sometimes project teams concentrate so much on execution that they miss the big picture. While chasing trends, they fail to achieve strategic goals and overwork their teams. When teams adopt project portfolio management, they prioritize and execute only value-delivering projects.

Builds governance and oversight into project management

Project portfolio management builds a natural governance model for all the projects of an organization. While project management looks at a single project, PPM provides a holistic overview of all projects. Project managers can create a contingency plan, employ data-driven techniques, and lead the company on the right path.

The five steps of project portfolio management

There are five main steps to the project portfolio management process in project management.

1. Identify the guiding objectives of the business

If you work for a grocery store, is their goal to provide the freshest food, the largest selection, or the lowest prices? If the lowest prices are the priority, then projects to promote cost savings are much more important than projects to improve the food's quality.

2. Capture and research requests and ideas

Project ideas could come from anywhere at any time. It's important to have a formalized intake process to capture these ideas so they can be tracked and evaluated. This may be as simple as a spreadsheet maintained by the portfolio manager, or it could be an online database where anyone in the company can enter ideas as they think of them.

3. Select the best projects

Once ideas are captured, portfolio managers must go through a standard process to evaluate and select the projects that will move forward. This requires more than just ensuring they are aligned with the company objectives, such as:

• How much will it cost?
• How long will it take?
• What is the return on this project? (What benefit will it provide?)
• Are the resources available?
• What are the risks associated with this project?

Since decisions are being made on multiple projects at once, this can become even more complex. A common way to simplify the project portfolio management process, and remove any bias, is to create a simple list of criteria that each project is measured and scored against, such as return on investment (ROI), which is a common ranking factor.

4. Validate portfolio feasibility and initiate projects

Once a determination has been made on which projects to move forward, it's important to validate the portfolio as a whole. This can include making sure the mix of projects chosen isn't too large, too risky, too expensive, or too interdependent. The portfolio should be properly balanced and aligned with business goals. For example, if three of your projects forecast testing in January, and you only have one test lab, this is an issue. Also, if two projects are interrelated and a delay in one will push out the other, you may want to reconsider starting them both simultaneously. Once the portfolio is validated, project managers can be assigned and the projects initiated.

5. Manage and monitor the portfolio

Projects change and evolve over time, and new ideas may be added to the list of potential projects. This is why it's important to continually manage both the ongoing portfolio execution and the intake process. Managing and monitoring the portfolio may include the following:

• Working with project managers to monitor the performance of projects
• Identifying and resolving conflicts between projects
• Making changes to the portfolio as needed, including putting projects on hold, canceling projects, and adding in new projects
• Ensuring projects are still aligned with the business objectives

Best tools for project portfolio management

While project portfolio management (PPM) may sound simple, putting the PPM life cycle into action can be challenging. Along with a continuous project planning and evaluation process, you will need the right tools to keep all projects moving forward. Here are some widely used tools for project portfolio management:

Decision tree analysis

Decision tree analysis is a great tool for evaluating situations with multiple subjective factors. It illustrates the multiple ways to solve a problem along with their costs, outcomes, and consequences. Use this method to evaluate project outcomes, identify opportunities, manage costs, and solve problems. 

Cost-benefit analysis

A cost-benefit analysis is a quantitative method for assessing the risk and reward of a project. Project success occurs when probable benefits are more and the overall cost is lesser.

Objectives matrix  

In this method, the overall business strategy is divided into multiple objectives. These smaller objectives are assigned to different projects and scored for evaluation.

Scoring model  

Appraising a project using the scoring model is a good way to balance the quantitative and qualitative factors. Some qualitative factors can be market competitiveness, business value, and customer confidence, while qualitative factors include operational cost, revenue value, and return on investment.

Weights and scores are assigned to these factors, and every project gets a total score. It provides a rational way of comparing projects based on their overall scores.

Why choose Wrike as your project portfolio management solution?

With multiple projects on the go, it’s important to know your team is focusing on the right projects at the right time. You need to combine project management with project portfolio management.

Create business value by focusing on strategic projects to deliver high-impact work. With Wrike, your teams can automate incoming requests, review team workloads, and address bottlenecks before they occur.

Start a free Wrike trial to reduce over-allocation of resources, minimize disruptions, and achieve project portfolio success.

Further reading

10 steps to a kickass kickoff meeting, what is a program manager vs. a project manager, from surviving to thriving: 3 challenges pmos need to conquer now, 3 ways to create your project manager calendar, basic project management.

• Project Charter
• Project Management Stakeholders
• What is a Project?
• Work Breakdown Structure
• Project Objectives
• Project Baseline
• Project Management Scheduling
• Project Management Work Packages
• Project Management Scope
• Scope Creep

Advanced Project Management

• What is PERT?
• Network Diagram
• Risk Management
• Cost Estimation
• Feasibility Study
• Monte Carlo Analysis
• Project Integration
• Cost Management
• PMI Project Management
• What To Do With Certification
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Software Features

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• Version Control
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• Project Management Software
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• Project Management System
• Gantt Charts

Project portfolio management

Optimize to get the results you want.

Harness the power of project portfolio management (PPM) capabilities to effectively plan, prioritize, and manage project and portfolio investments.

Drive portfolio optimization.

Easily model different portfolio scenarios to determine the best strategic path. Weigh project proposals against strategic business drivers and consider the cost and resource constraints.

Get the big picture across programs and projects

Aggregate portfolios, programs, and projects across your organization in a visual, interactive Roadmap for broader visibility. 1

Transform project data into actionable insights

Share built-in reports, such as burndown or Power BI dashboards, to keep everyone on the same page. Native OData lets you quickly aggregate portfolio data for advanced reporting. 2

Systematically evaluate proposals

Capture and evaluate project ideas from anywhere within the organization. Use a standardized process that feeds detailed business cases and project charters to management for review.

Run your business your way

Customize your portfolio management needs to best suit your organizations needs and help shorten your time to market.

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PPM 101: What Is Project Portfolio Management?

What is project portfolio management (ppm).

Project portfolio management (hereafter referred to as “PPM”) is a critical component for executives and senior managers to execute strategy. According to Mark Morgan , “there is simply no path to executing strategy other than the one that runs through project portfolio management”. In fact, projects are “the true traction point for strategic execution”. Furthermore, David Cleland states in the book Project Portfolio Management: Selecting and Prioritizing Projects for Competitive Advantage by Lowell D. Dye  and James S. Pennypacker that “projects are essential to the survival and growth of organizations. Failure in project management in an enterprise can prevent the organization from accomplishing its mission. The greater the use of projects in accomplishing organizational purposes, the more dependent the organization is on the effective and efficient management of those projects. Projects are a direct means of creating value for the customer in terms of future products and services. The pathway to change will be through development and process projects. …With projects playing such a pivotal role in future strategies, senior managers must approve and maintain surveillance over these projects to determine which ones can make a contribution to the strategic survival of the company”. Every Project Management Office (PMO) should be heavily involved with project portfolio management.

The Distinction Between Project, Program, and Portfolio Management

Before diving into the details of project portfolio management, let’s provide a brief overview of the difference between projects, programs, and portfolios.

• PORTFOLIO : a portfolio is a collection of projects and programs
• PROGRAM : a program is a collection of related projects and other work that share common objectives and are better managed collectively
• PROJECT : a temporary endeavor undertaken to create a unique product, service or result with defined scope resources, and schedule.

Project portfolio management is a senior leadership discipline that drives strategic execution and maximizes business value delivery through the selection, optimization, and oversight of project investments which align to business goals and strategies

Portfolio Management Definitions

First, project portfolio management must be defined. Several definitions of PPM from authoritative resources are given below and provide a balanced view to the subject of portfolio management. Without a complete understanding of PPM, the benefits mentioned above will be reduced.

According to the Project Management Institute (PMI ® ), project portfolio management is the “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs and operations.”

The Stanford Advanced Project Management series offers a concise definition of PPM: “Portfolio management is the strategy-based, prioritized set of all projects and programs in an organization reconciled to the resources available to accomplish them”.

The Association for Project Management defines portfolio management as “the selection, prioritization and control of an organisation’s projects and programs in line with its strategic objectives and capacity to deliver. The goal is to balance change initiatives and business-as-usual while optimizing return on investment”.

Gaylord Wahl of Point B provides another angle of portfolio management: “Project portfolio management applies the tools and discipline of financial management to product/project management, taking into account: investment strategy, risk, ROI, growth/profitability, balance, diversification, and alignment to goals.”

Acuity PPM defines portfolio management as “a senior leadership discipline that drives strategic execution and maximizes business value delivery through the selection, optimization, and oversight of project investments which align to business goals and strategies”. PPM is about maximizing and delivering value .

What Is the Project Portfolio Management Lifecycle?

Based on the information above, project portfolio management can be broken down into four basic components: selecting the right projects, optimizing the portfolio, protecting the portfolio’s value, and improving portfolio processes. In order to implement portfolio management, we must understand PPM at this highest level. These four components are represented in the diagram below, but it is important to understand that these four lifecycle steps occur in parallel with each other, but for the purpose of understanding  portfolio management, we can define four distinct lifecycle steps.

1) Define the Portfolio — Defining the portfolio includes process such as ideation, work intake , and Phase-Gate to select projects that align with strategic objectives. Part of portfolio definition requires the governance team to define portfolio parameters such what types of projects to include (e.g. operational projects, strategic projects, or both), the dollar threshold at which point projects should be included in the portfolio. At the beginning of implementing portfolio management, it is important for the governance team to decide what a project is and then define which types of projects belong in the portfolio. This results in the portfolio containing a higher percentage of winning projects.

2) Optimize Portfolio Value —this involves all the steps necessary to construct an optimal portfolio given current limitations and constraints (e.g. prioritization , resource capacity planning , portfolio planning, etc.). Portfolio optimization involves intermediate to advanced processes to maximize the value of the portfolio. Governance teams first need to establish Work Intake processes and be able to say no to new requests. Once basic governance is established, it is possible to truly optimize the portfolio. By definition, portfolio optimization means working within current limitations and constraints, and in practice it requires governance teams to reject lower value work in order to increase the overall value of the portfolio.

3) Protect Portfolio Value —during the execution of an optimized portfolio, the aggregate project benefits (portfolio value) must be protected. This occurs by monitoring projects, assessing portfolio health, and managing portfolio risk . It is not enough merely to initiate good projects, senior leadership plays an important role in ensuring that projects meet their intended objectives and deliver the expected value. Some of this responsibility falls on the project sponsor and project steering committee, but the portfolio governance team plays an even greater role to ensure that resources are available for in-flight work, there are no competing priorities that frustrate project completion, and portfolio level risks are addressed.

4) Deliver Portfolio Value —Part of this lifecycle phase involves benefits realization processes to ensure that portfolio value is delivered by comparing expected benefits with actual benefits. This requires teams to proactively measure project performance post-completion. Many companies do not devote resources to benefit realization and therefore miss an opportunity to compare expected benefits against actual benefits. In addition, delivering portfolio value involves improving PPM maturity as higher maturity translates into a greater realization of the benefits of portfolio management. Lastly, ongoing process improvement can improve portfolio delivery.

What Are The Important PPM Capabilities?

Project portfolio management is a multi-faceted strategic discipline that includes a number of capabilities. Each of these capabilities is covered in more detail in the presentation at the bottom of the page. Portfolio Managers are needed to both develop and oversee these processes.

• Ideation – the process to generate and affinitize a list of new project ideas. The goal is to collect the best ideas from the organization to generate higher quality projects.
• Work Intake – refers to the steps of developing a project proposal and bringing it to the governance board for a go/no-go decision.
• Phase-Gate – a governance structure to evaluate, authorize, and monitor projects as they pass through the project lifecycle.
• Prioritization – the process of evaluating project value in order to assign resources to the most important projects and start work at the appropriate time
• Portfolio Optimization – refers to optimization techniques used to identify the optimal grouping of projects that maximize the risk-adjusted portfolio value at a given budgetary level
• Portfolio Planning – the process to optimize the sequencing and timing of approved projects based on resource constraints and dependencies
• Resource Capacity Planning – the process of comparing future resource utilization of project resources against available capacity to do work
• Portfolio Risk Management – assesses the risk nature of projects and manages portfolio level risks
• Portfolio Communication – processes to communicate about all aspects of project and portfolio progress
• Portfolio Reporting and Analytics – processes to analyze and report against the value and progress of the portfolio
• Portfolio Value Management – processes to evaluate, measure, and track project benefits at the portfolio level
• Project Monitoring – processes to measure and track project health and performance
• Portfolio Governance – the decision making process to select and prioritize project work

When Is It Time To Implement PPM?

There are several signals for when companies should implement project portfolio management.

• The first indicator for when companies should implement PPM is when they start managing multiple projects. Senior leadership should get visibility of the project portfolio right away; this is important for managing strategy execution and guarding against low value projects.
• If it is hard to get work done, there are competing priorities (or the priorities change often), and resources are overworked, this is another good indicator to implement basic portfolio management practices.
• If the organization is overloaded with work, and priorities are unclear, this is another indicator to adopt portfolio management practices.
• Senior leaders who want to improve their strategy execution should institute basic portfolio management rigor.

Get Answers to Fundamental Questions

Project portfolio management provides answers to eight fundamental questions:

• What are we working on?   You cannot manage what you cannot see. Organizations with little or no portfolio management discipline may be running far more projects than they realize, or even worse, may be managing duplicate project efforts and not even realize it. Getting visibility of all project work is the first major benefit of tracking your project portfolio. This helps senior leadership eliminate redundant projects and save money.
• Do we have the right projects?   After getting visibility of all project work, the leadership team can begin to evaluate whether they have the right projects in the portfolio. This requires establishing good criteria for what constitutes a “good” project. Leadership should also develop an intake process to evaluate and approve the right project work.
• Where are we investing money and people?   Without good portfolio level metrics and analytics, senior leadership may be blind to where they are investing resources across the portfolio. There are many ways to evaluate where money and people are being invested. This is why it is important to categorize projects. One common approach is “Run”, “Grow”, and “Transform”. Categories such as these can greatly inform leadership of how many money is being spent to run the business versus growing or transforming the business.
• Is our portfolio optimized? Optimizing a portfolio requires understanding the various budgetary or resource constraints of the organization. This is an advanced process to ensure the greatest “bang for the buck”. Portfolio optimization happens on multiple levels such as cost-value optimization, resource optimization, schedule optimization, and work-type optimization.
• Can we realistically deliver the portfolio? This is an important question that senior leadership needs answers for. When companies do not operate within known resource constraints and/or do not have realistic project plans in place, it is impossible to successfully deliver the portfolio of work according to plan.
• How are we performing? Understanding actual portfolio performance is critical for senior leadership to successfully and consistently “deliver the goods”. This includes project status, but goes beyond the individual project status report and requires an aggregate portfolio view of project performance in order to get an accurate picture of how the portfolio is performing.
• Can we absorb all the change? Even if resources are managed well and good project plans are in place, if a lot of projects try to implement multiple changes to the same stakeholder group at the same time, that organization or company may not be able to absorb and handle all the changes coming at them. Good portfolio management will monitor whether the organization can absorb all the changes.
• Did we get the benefits we intended? This refers to benefit realization and is an important topic. In order to know whether the benefits were realized after the project, the leadership team needs to understand what the benefits are before the project starts and track them throughout the project lifecycle.

By implementing project portfolio management, your company can get answers to these questions faster and with greater confidence.

What Are The Benefits of Portfolio Management?

Companies that do successfully implement project portfolio management (PPM) reap several benefits, listed below:

• Greater strategic execution resulting in the accomplishment of more business goals and objectives of the organization
• Maximized portfolio value for the organization
• Enhanced decision making processes resulting in better decisions
• Successful management of organizational change
• Greater visibility of projects in the organization
• Higher success rate of projects within a complex environment
• Reduced organizational risk
• Balanced project portfolio workload

These benefits are real, but require leadership to endorse portfolio management practices and follow defined procedures in order to get organizational buy-in and support.

Acuity PPM Project Portfolio Management Software

Acuity PPM is an excellent lightweight project portfolio management solution that replaces spreadsheets. Acuity PPM helps you track project performance, report project and portfolio status to senior leaders, manage and prioritize incoming project requests, visualize strategic roadmaps, allocate resources and manage resource capacity. All of this helps enable strategic agility in a changing environment.

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If you have questions about portfolio management or need expert help, contact us today.

Tim is a project and portfolio management consultant with 15 years of experience working with the Fortune 500. He is an expert in maturity-based PPM and helps PMO Leaders build and improve their PMO to unlock more value for their company. He is one of the original PfMP’s (Portfolio Management Professionals) and a public speaker at business conferences and PMI events.

An Overview of PPM

This presentation will teach you the foundational principles of PPM.

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What is a project portfolio?

A project portfolio is a defined set of projects and programs within an organization that is better managed as a collective set of work to accomplish strategic goals.

What is project portfolio management?

Project portfolio management is a senior leadership discipline that drives strategic execution and maximizes business value delivery through the selection, optimization, and oversight of project investments which align to business goals and strategies.

What is the portfolio management lifecycle?

The portfolio management lifecycle includes four essential elements. 1) Define the Portfolio— Processes to define portfolio parameters and select projects that align with strategic objectives. This results in the portfolio containing a higher percentage of winning projects. 2) Optimize Portfolio Value—all the steps necessary to construct an optimal portfolio given current limitations and constraints (e.g. prioritization, resource capacity planning, portfolio planning, etc.) 3) Protect Portfolio Value—during the execution of an optimized portfolio, the aggregate project benefits (portfolio value) must be protected. This occurs by monitoring projects, assessing portfolio health, and managing portfolio risk. 4) Deliver Portfolio Value—Ensure that portfolio value is delivered by comparing expected benefits with actual benefits. Improving PPM maturity translates into a greater realization of the benefits of portfolio management.

What are important project portfolio management capabilities?

The full breadth of project portfolio management includes several important capabilities including: ideation, work intake, Stage-Gate, prioritization, portfolio optimization, portfolio planning, resource capacity planning, portfolio risk management, portfolio communication, portfolio reporting and analytics, portfolio value management, project monitoring, and portfolio governance.

What are the benefits of project portfolio management?

Companies that do successfully implement project portfolio management (PPM) reap several benefits: 1) Greater strategic execution resulting in the accomplishment of more business goals and objectives of the organization 2) Maximized portfolio value for the organization 3) Enhanced decision making processes resulting in better decisions 4) Successful management of organizational change 5) Greater visibility of projects in the organization 6) Higher success rate of projects within a complex environment 7) Reduced organizational risk 8) Balanced project portfolio workload

What are important project portfolio management questions to answer?

1. What are we working on? 2. Do we have the right projects? 3. Where are we investing money and people? 4. Is our portfolio optimized? 5. Can we realistically deliver the portfolio? 6. How are we performing? 7. Can we absorb all the change? 8. Did we get the benefits we intended?

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What is Project Portfolio Management (PPM)?

Project portfolio management (PPM) is a strategy for aligning and managing connected, interrelated, and dependent projects and programs and programs.

What does Project Portfolio Management include?

Project portfolios are made up of programs, processes, operations, and projects grouped together based upon their strategic importance to an organization and its goals. But while these projects may be aligned strategically, making sense of them as a group can be a difficult and complex task. PPM helps streamline this undertaking, creating a big-picture view of the projects as a single entity, and helping organizations prioritize and sequence them for optimal business returns.

What is project portfolio management vs. project management?

Given the similarity in the naming convention, the terms “project portfolio management” and “project management” are sometimes used synonymously. However, they describe two different strategies, each with their own associated use-cases and objectives.

Project management is a broad term, describing the strategies, tools, and techniques used in managing a project. Projects are temporary; they exist for a specific amount of time and ideally result in a finished product or service. Project management offices (PMOs) and project managers use project management to assist in the completion of projects by setting costs and budgets, allocating resources, assigning responsibilities, and reporting to stakeholders.

Project Portfolio Management coordinates and analyzes the possible value of collections (portfolios) of related projects, programs and demands. PPM is a higher-level approach that links project management to enterprise management, helping businesses select projects based upon how well they align with or support company objectives.

What are the benefits of project portfolio management?

PPM offers a holistic, real-time view of the status and health of project groups, as well as their associated resources and interdependencies. When used effectively, this provides a few key benefits.

Improved project selection

Business success depends on organizations choosing the right projects based on goals, risks, resources, etc. Unfortunately, the selection process isn’t always clear, often leading to businesses taking on projects that fail to align with strategic goals. At other times, individual decision makers or even entire departments may become too focused on pet projects , using valuable time and resources pursuing projects at the cost of other, more-valuable options.

PPM facilitates an improved project selection process by incorporating reliable data, scoring models, and other quantitative and qualitative approaches to ensure that projects are selected based on relevant criteria. At the same time, current projects that are not contributing to the organization's objectives can be easily and objectively identified and removed from the portfolio.

Minimized organization risk

Project risks don’t exist in a vacuum; they’re closely tied to the potential for return, making certain risks justifiable while others are not. PPM gives businesses a clear view into the risks vs. returns of entire project portfolios, revealing which risks are worth taking, and which are not.

PPM estimation tools provide analysis of project costs and compare them to potential benefits, and built-in alerts help PMOs, and project managers quickly identify and resolve delays, budget overruns, and technical issues before they can create larger problems. Correctly implemented, project portfolio management minimizes project risk, allowing organizations to refine their portfolios to include only the projects that offer enough value to offset potential risk.

Enhanced communication

When projects are evaluated and managed individually, it can create silos between individuals, departments, and decision makers. PPM brings these stakeholders together, allowing them to coordinate holistically on the entire portfolio of projects, and creating a more-cohesive team.

PPM breaks down barriers between projects, giving business leaders a wide view of the overall impact of related projects, rather than forcing them to only evaluate and choose from a limited number of specific projects. This means improved communications flow that includes everyone involved, as well as more-informed decision making.

Reduced project delivery times

Taking a project from conception through to delivery involves a complex set of actions. Unforeseen factors can and will create complications, often resulting in project delays and forcing project managers to adjust deadlines while increasing spend. Unfortunately, as projects go over budget and over schedule, their potential returns begin to dry up. Bogged-down projects also divert resources from other essential tasks, impacting the business beyond the scope of the project itself.

PPM incorporates intuitive, real-time reporting, so that managers can identify deviations, bottlenecks, and other issues that may slow or derail projects. They can then take corrective actions immediately, putting the project back on track before it can fall too far behind to be salvaged.

Increased ROI

The end goal of nearly any project is to bring in more revenue than is spent in creating and delivering the project. Return on Investment (ROI) has always been a trusted metric by which to gauge project success, and PPM is designed to ensure that the projects businesses pursue and include in their portfolios are those that will generate a significant positive return on the money and resources invested.

Through improved selection processes, more-effective communication across levels, reduced project risk, and increased likelihood of projects being completed on-time and within budget, PPM helps ensure that project investments pay for themselves, and help grow the businesses that deliver them.

What are the five steps of project portfolio management?

Although the term project portfolio management can be used to describe essentially any strategy for managing groups of projects, successful PPM tends to follow a series of five established steps. These steps allow organizations to take the complete range of potential projects they may wish to pursue, and then refine them until they are left only with those options that meet predefined selection criteria based on ROI, efficiency, risk, strategic alignment, and more.

In other words, the five steps of PPM help companies establish priorities, clear out unprofitable projects, and focus their time and resources on only the most high-impact projects. They also ensure that all approved projects are working within the company strategy, and that the portfolio is correctly balanced in terms of risk and results.

With this in mind, the five steps are as follows:

1. Identify the scope of your business and portfolio

Project portfolio management is an essential tool for helping projects contribute positively to business success. But before they can do so, success itself must be defined. Before getting started with PPM, an organization’s strategic objectives must be clearly described, and metrics for evaluating projects must be likewise decided upon. Valuation criteria can take many forms but is generally based either on financial goals or other scoring metrics such as strategy alignment, technical feasibility, or market attractiveness.

Without clear definitions of success and value, businesses are forced to make project selections based on less-concrete criteria, leading to an unbalanced portfolio in terms of risk, reward, or strategic relevance.

2. Manage project ideas

Once strategic objectives have been identified and success and value have been defined, organizations can start to build off this foundation to create project portfolios.

Start by gathering all potential projects, using insights from customer feedback, employees, managers, strategic planning, and compliance and regulation requirements. Next, add current, on-going projects to the project inventory, so that they too can be evaluated, and either justified or discontinued. Gather all data on these projects that will allow them to be rated against the criteria established in step 1. Include estimates on dependencies and resources needed to see each candidate project through to completion—these numbers do not need to be completely accurate at this time; high-level approximations are enough to identify potential projects at this stage, with the understanding that more projects will require more precise validation before execution.

3. Prioritize projects

The next step in the process is to determine which combination of projects will create the greatest possible total value for the portfolio. Using the valuation criteria established earlier, create a chart comparing and ranking candidate projects. Ranks can be established based on estimated financial value or other value scores. Arrange the projects on the chart in order from highest to lowest value.

With all candidate projects ranked, begin allocating available resources, prioritizing highest-value projects. When the resources are all exhausted, eliminate the projects that were not high enough value to receive any resources, creating a cut line and tentatively establishing which projects will and will not be included in the portfolio. This portfolio is not set in stone; it will next need to be discussed, reviewed, and monitored. The project prioritization step simply helps establish baselines and provides data to inform later decision making.

4. Validate proposed projects

The early steps in project portfolio management rely on resource and cost estimates to create a high-level, abstract estimate of project value and returns. But as the portfolio nears completion, these estimates must be validated. Work with those who run the projects, and who can provide more-concrete numbers. Consider possible bottlenecks, skill availability, dependencies, and any other factors that might have an impact on project feasibility.

While there will always be unaccounted-for variations, taking a closer, more-informed look at feasibility will help ensure that only the projects with the best chance of success are included in the portfolio.

5. Measure, monitor, and manage

Once the proposed portfolio has been refined and agreed upon, and the individual projects have been adequately validated, the final step is to put the portfolio into execution. Initiate the projects, and begin to measure performance, monitor each project's progress, and manage them ongoing to ensure that they are meeting the established objectives.

PMO and project managers need to work closely together in this step and align with the portfolio manager to gather relevant performance data, allocate and reallocate resources, and schedule and initiate reviews. These stakeholders must also be ready and capable of making changes to the portfolio and its constituent projects where necessary. This final step is ongoing and will last through the entire life of the portfolio.

Project Portfolio Management with ServiceNow

A properly managed portfolio can provide significant benefits for any organization, but the complexities of shifting needs and scaling projects can make project portfolio management a very difficult prospect. ServiceNow, a world leader in IT management, provides the solution.

ServiceNow Project Portfolio Management manages outcomes to help organizations create value, embrace uncertainty with flexible planning, and deliver faster portfolio solutions by scaling work. Built on the ground-breaking Now Platform, ServiceNow PPM includes powerful features designed to simplify and optimize the PPM process.

Roadmap planning helps align teams and investments with established business goals. Scenario planning uses what-if analysis to evaluate projects based upon shifting possibilities. Innovation management facilitates collaboration between teams, accelerating efficient idea gathering and evaluation. Investment funding helps allocate vital resources using strategic objectives, portfolios, and business services. Demand management centralizes business and IT requests, improving the investment process for new products and services best aligned to key business initiatives. The end result? Optimal visibility into projects and portfolios, along with improved adaptability, flexibility, speed, and strategic alignment.

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Table of Contents

What Is Portfolio management?

An organization has several projects and programs that are all geared towards achieving business success, or, at least, to bringing in revenue, profit and other resources that can help a company thrive. But what if an organization fails to execute and deliver on these projects and programs? The consequences can be dire. This is where portfolio management comes in. In a nutshell, portfolio management is a process that ensures an organization is able to leverage project selection and execution, achieving strategic objectives, in the process. It also brings together one or more project portfolios, and allow for centralized management to reach strategic objectives. Portfolio management is considered as a link between strategy and implementation of a project. But what is a portfolio, and how is it different from programs and projects? Where does portfolio management come into the picture? Read on and find out.

Content Overview

The purpose of this article is to discuss in-depth what portfolio management is really all about, including its various methods, technologies, resources and other aspects that lead to project success or failure. Discussed herein are:

• Definition of Portfolio
• Difference of Portfolios from Programs, and Projects
• Definition of Portfolio Management
• The Link between Portfolio Management and Organizational Strategy
• Impact of Linking Portfolio Management with Organizational Strategy
• Implementation of Portfolio Management
• Role of a Portfolio Manager
• Role of a Project Management Office in Portfolio Management

What is portfolio?

It is a collection of projects grouped together to facilitate centralized and effective management to achieve business strategic objectives. It can also include programs and other operations that may share similar objectives or are necessarily interdependent. Components of a portfolio, however, must be quantifiable so portfolio managers are able to measure, rank and prioritize each component as specified in the portfolio management processes. It also serves as a representation of its selected components, in the same way that a portfolio best describes what an artist is capable of, for example. The components within their portfolio will give an insight as to the medium they know how to use, and the type of artwork they can deliver. In portfolio management, a portfolio also reflects organizational strategy and objectives.

Common characteristics of a portfolio

• Consists of a set of past, current, and future/planned components
• Exists for a longer term, what with new projects rotating into it
• Lacks a defined beginning and end
• May contain sub-portfolios
• Must be linked to organizational strategy

There could be more than one portfolio within an organization, with each one designed to address unique objectives and strategies. Even proposed initiatives are structured within portfolios, with each component going through the same level of evaluation and selection, and must be authorized. In order to leverage these components and/or sub-portfolios, portfolio management is essential, and must include various activities to achieve strategic business objectives. These include:

• To identify and align organizational priorities
• Determine portfolio performance management and portfolio governance framework
• Measure value/benefit
• Make investment decisions
• Managing portfolio resources, portfolio communication and portfolio risk

Most importantly, a portfolio must be aligned with organizational strategy. As it is intended to represent an organization’s intent, progress and the direction it wants to take, it should provide a valuable and beneficial answer to the question of why a work/project is undertaken.

What makes portfolios difference from programs, and projects?

Based on its definition, a portfolio is like the tree of a family tree, which holds together different components, including programs and projects. Programs, along with their sub-programs, operations and projects, are grouped together in one portfolio, and are managed to support the portfolio in a coordinated manner. For a project, program or other works to be a component of a portfolio, however, they must meet certain criteria.

• Aligns with the goals and objectives of an organization
• Represents an investment planned or made by an organization
• Must have common features with other programs or projects, so they can be grouped together in one portfolio and managed effectively
• Must share and compete for resources
• Must be measured, ranked and prioritized

What is portfolio management?

Portfolio management is the process of managing one or more portfolios in a coordinated, effective and centralized manner to achieve organizational objectives and strategies. It includes interrelated processes that an organization selects, evaluates, allocates internal resources with, and prioritizes to ensure strategies align with an organization’s values, vision and mission. While programs focus on achieving a specific set of benefits, and projects focus on creating specific deliverables, portfolio management ensures that a relationship between the two are identified and allocated with resources accordingly. Organizational functions and operations may also be affected by portfolio management. Suffice to say that there is a give-and-take relationship between an organization’s functional group and portfolio management.

The former may be stakeholders and sponsors of the portfolio components, while the latter can impact functional groups’ daily operations. This is especially true if objectives of a portfolio are achieved. Decisions made in portfolio management may also impact operational budget and the day-to-day organizational activities. Remember that resource allocation of portfolio components is often a direct result of portfolio management decisions, while deliverables and processes used by operations management are usually outputs of components in a portfolio. This underscores the need for portfolio managers to take into account operations and organizational functions to realize the full value of portfolio components.

Portfolio management also brings to the table:

• Valuable information to alter or support investment decisions and organizational strategies
• An opportunity for governing bodies to achieve specific outcomes by making the right portfolio management decisions
• Balance the conflicting demands of projects and programs

What is the link between portfolio management and organizational strategy?

An organizational strategy is a plan that outlines the goals, actions and policies that will help an organization focus and move in the right direction. It also defines the methods and means to achieve goals through ongoing organizational activities or projects and programs. How else is a goal attained, if there are no strategies developed to ensure work is executed properly and errors are prevented? Part of the strategic plan is to define how core competencies and strengths can be used to effectively manage resources, capitalize on opportunities, reinforce focus on activities critical to the overall operations, manage stakeholder value, minimize threats and risks, and respond to changes in the market, and regulatory and legal environments.

Along with organizational objectives, strategy is translated into a set of initiatives influenced by market dynamics, competitor plans and actions, government regulations, shareholders, customer and partner requests, and other factors. In some organizations, program and project management and operations are under a specific portfolio. This makes portfolio management a way to bridge the gap between organizational strategy and operations, which include program and project management. It also helps an organization leverage project selection and success, while ensuring it remains competitive in a rapidly changing environment.  This is why, by linking strategy to portfolio management, balance in the use of resources is achieved, ensuring maximum value in the execution of operational activities, programs and projects.

What are the impacts of linking portfolio management with organizational strategy?

Considering that portfolio management bridges the gap between organizational strategy and strategy implementation, failure to establish a link can have serious consequences. After all, both factors are essential in establishing a plan that is balanced and executable, resulting in accomplishing goals. There are also benefits when portfolio management is linked to organizational strategy.

• Different portfolio components are kept aligned

Although components in a portfolio don’t have to be directly related or interdependent, there should be common features among each component to ensure effective management. But the best way to manage a portfolio is to align its components to one or more strategic objectives. When project managers understand why they are doing the work, and what goals must be achieved, they will stay on track and maintain portfolio strategic alignment . Portfolio management is about achieving a strategic business objective, which can be accomplished when there is a clear understanding of the goals, and when proposals for a portfolio describe how they support the means to attain those objectives.

• Proper allocation of financial resources

Portfolio management decisions can have an impact to the operational budget. This is because different portfolio components require different resource allocations, and portfolio managers must evaluate and prioritize components.

• Proper allocation of human resources

Depending on priority level, a portfolio component may require more or less hiring efforts, capability allocations, scheduling and resource planning. This goes to show that portfolio management can also guide human resource allocation, including development of long-range talent.

• Proper resource allocation

Whether raw materials or equipment, the priority of each component in a portfolio will guide how resources are allocated. Effective portfolio management will ensure that each component’s needs, including constraints, are accounted for.

• Measurable performance of portfolio component

Portfolio management ensures that each component in the portfolio leads to strategic success, which can be achieved when every component’s contribution is measured based on the context of the goal to be satisfied.

• Better risk management

A vital aspect of organizational strategy is to determine how strengths and core competencies can be leveraged to minimize risk. Since portfolio management requires that components are evaluated for risks of any kind, whether internal or external, establishing a link with organizational strategy will help in developing plans to manage portfolio risks .

• Implementation of Portfolio management

Portfolio management is often used at business unit or department level to resolve conflicts, issues, team concerns, and constrained resources. When implemented in a structured manner, it can provide long-term value to an organization. Implementation of portfolio management involves 4 steps – to assess, define, implement and improve the portfolio management process. If an assessment shows that some areas of the process need to be improved, changes must be made.

What is the role of a portfolio manager?

Who better to implement the portfolio management process than portfolio managers themselves? They are equipped with the skills, knowledge and expertise to do the right work. Their primary function is to receive information about a portfolio component’s progress and performance, and then determine how the overall components align with an organization’s strategic goals, before relaying the information to the portfolio management governing body.

Some of their specific tasks include:

• Ensure that portfolio management processes are done on time
• Provide appropriate recommendations or options for when there are discrepancies in portfolio management
• Provide the required information as outlined in the portfolio management process
• Serve as a conduit between portfolio stakeholders and component managers
• Establish and maintain an organization’s portfolio management’s framework, and body of policies and procedures
• Ensure that portfolio components are aligned with strategic business objectives by providing a guide on how to select, balance, prioritize and terminate components
• Support portfolio management processes by establishing and maintaining system and infrastructure for implementation and execution
• Continuously monitor the progress of portfolio components and portfolio management processes, using various metrics and targets, such as net present value, return on investment, and internal rate of return.

In addition, project managers are also responsible for ensuring compliance of legal and regulatory requirements, while supporting senior-level decision making, on top of portfolio management decision making.

What is the role of a PMO in portfolio management?

In an organizational level, a PMO defines and maintains the standards of portfolio management, project or program processes. Status reporting is their most basic function, but they may also execute projects. In portfolio management, a PMO helps in managing portfolio components; develop and maintain the framework and methodologies of a portfolio, program and project; handle communication across components in a portfolio; monitor policy compliance; develop and improve checklist and templates; assist in risk assessment, identification and strategy development; and conduct training in portfolio management skills, techniques and tools. Most of the time, what a PMO can and can’t do in portfolio management will depend upon the needs of an organization and its stakeholders. A PMO can also have a special purpose, depending on what an organization needs.

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Project Prioritization: Stop Working on the Wrong Projects!

by Karoline Holicky

Updated on October 25, 2023

The Ranking Method, the Scoring Method and the Decentralized Approach at a Glance

Ask five different colleagues what they think the most important project in your organization should be and you will get five different answers. If your organization had an infinite number of resources, you could work on all five projects at once, but the reality is that resources are limited. Deciding which projects to prioritize over others is difficult to say the least and if not done correctly, could have serious consequences for your business. To tackle the challenge of what projects should be done first, companies use different prioritization methods. However, not all methods are right for each company. Just like Goldilocks, you need the method that’s just right. We’re going to break down three of the most common project prioritization methods so you can determine which one is right for your organization.

The Priority Ranking Method

What is it.

The Ranking Method is the simplest prioritization method and the one that most people are probably familiar with. When you use the Ranking Method, you determine one (or possibly two) criteria to evaluate a project. For example, things such as return on investment (ROI) and customer benefit could be criteria for evaluation. Projects are then ranked based solely on that one criteria. If ROI is your evaluation criteria, your #1 ranked project will deliver the biggest ROI and is staffed with resources before all other projects. This doesn’t mean that projects ranked #2 and #3 (and so on) don’t have an impressive ROI; they just don’t have the highest ROI. The remaining projects are staffed in order of rank (from the highest rank to the lowest rank) until there are no more resources available. When resources run out, the remaining projects are put on hold.

One of the biggest advantages of this method is that it forces organizations to make decisions. The process for making decisions is clear and easy to understand. However, the Ranking Method works best when organizations have a small number of projects (ideally less than 20 projects) and when projects are similar in nature making them easy to compare with only one criteria. When organizations grow and begin to take on more projects, they will need evolve their prioritization process.

The Priority Scoring Method

If you want to evaluate projects for prioritization with more than one criteria or if you want to compare very different types of projects, you should consider the Scoring Method. The Scoring Method works by taking numerous evaluation criteria to calculate a priority score. Criteria can also have a weighting to emphasize which criteria is most important. Common criteria used can include:

• Payback Period
• Project Cost
• Alignment to Corporate Strategy
• Impact on Customer Satisfaction
• Other Project Dependencies
• Adherence to Regulatory Requirements

Many organizations choose the Scoring Method for the high degree of customization it offers. Organizations can determine exactly which criteria and weighting are most relevant to their specific business. When evaluating a project, the project is evaluated and scored for each criteria. The score for each criteria is then adjusted if there is a weighting and the total of all criteria scores are added to provide a final project priority score. Projects are then staffed according to the project priority score with the highest scoring projects staffed first.

While customization is the Scoring Method’s advantage, it can also be a disadvantage. Many organizations make the mistake of overcomplicating the process by developing too many project evaluation criteria. Project evaluation needs to be thorough, but organizations with a lengthy list of evaluation criteria will find themselves buried under complex weighting formulas. Because at least one individual will need to provide a score for each project criteria, adding criteria also adds more work so each criteria should be deliberate. It’s also important to note that the Scoring Method would not be the best choice for organizations with hundreds or thousands of projects, even if there were only a few evaluation criteria. Filling out criteria for each project would take too long. For organizations of this size, prioritization will need to be broken down further.

The Decentralized Approach

At a certain size, centralization only slows down an organization. While organizations may start with only a few decisions makers, the more it grows, the more the decision-making will need to be decentralized. This is the only way to avoid bottlenecks and maintain the adaptability needed to compete in the marketplace. The Decentralized Approach works by breaking down projects by department, business unit or sometimes even teams. This effectively creates mini-organizations that make up an entire company.

These mini-organizations will assume the responsibility for projects and the prioritization of projects within their own mini-organization. By doing this, the number of projects for prioritization by one person or body decreases to a more reasonable number. Each mini-organization can use whatever prioritization method they see fit and they will show their projects to a portfolio board or other decision-making body to obtain approval, budgets and resources.

When the portfolio board doesn’t have to evaluate every project, the approvals process happens much more quickly and frees up more of their time. It may take some time for portfolio board members to adjust to the decentralization, but they still have control over the budgets and resources assigned to each mini-organization so they can assure alignment to the corporate strategy.

What to Do after Project Prioritization

Prioritization is not the only hurdle to getting projects completed and reaching corporate goals. Prioritization is part of a process of initiating new project ideas , evaluating them, executing on them and measuring their success. To help companies with prioritization and beyond, we developed the Lean Project Portfolio Management™ framework . Our Lean PPM™ framework outlines all the roles, responsibilities and meetings companies need to organize their project portfolio and finish more projects. Most organizations are already using some type of PPM process, so mapping the Lean PPM™ framework on top of current processes is easy. When organizations successfully implement Lean PPM™, they can answer the question, “Who should implement which projects, when?”

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10 Best Online Courses for Project Management in 2023

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Looking to enhance your project management skills? Check out our list of the best online project management courses that offer comprehensive training.

Udemy: Beginner to PROject Manager

Udacity: digital project management, colorado state university: online project management, simplilearn: pmp certification training course, master of project academy: project management training bundle - 6 courses, coursera: engineering project management specialization, pluralsight: project management for software engineers, cybrary: enterprise project management, prince2 6th edition foundation, cornell university: project management certificate program.

Are you looking for the best project management certification course to help you advance your career or just looking to learn project management to improve your skills? In this article, we selected and reviewed the best online project management courses, certifications and training — self-paced and instructor-led, free and paid — for professionals of all skill levels.

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Top online courses for project management: Comparison chart

• Top online courses for project management

Tips for choosing the right project management course

Frequently asked questions about online project management courses.

Here is a feature summary of the best online courses for project management.

Created by 365 Careers, this Beginner to PROject Manager course is a bestseller on Udemy. This course teaches you how to use Gantt charts, critical path methods, project plans and budgets. It also includes 15+ project management templates that you can use to create your own projects. The course is structured in a step-by-step manner, starting with the basics of project management and gradually moving towards more advanced topics such as MS Excel for project management, agile project management and scrum, as well as agile and waterfall.

Course details

​​Digital Project Management is a nanodegree program taught by Walyce Almeida, a program manager at AWS and hosted on Udacity. This course is designed for those looking to learn about project management processes, tools, principles and practices. The digital project management course teaches you foundational project management concepts. In this course, you will learn how to translate business requirements into a project scope statement, build project plans in waterfall or agile and develop a high-performing team.

Some of the skills you’ll learn include:

• Cost-benefit analysis.
• Project risk mitigation.
• Scrum and scrum boards.
• S.M.A.R.T. goals.
• Requirements gathering.
• Professional portfolios.
• Project execution, status reporting, scoping, closure and scheduling.
• Waterfall project management.
• Project management artifacts.

This course is powered by Colorado State University. It’s created for project managers, project coordinators and business analysts who want to advance their project management skills or those preparing for the Project Management Professional exam in order to earn the Certified Project Management Professional or the Certified Associate Project Manager certificate.

The program is structured to engage participants in a collaborative learning process, allowing them to earn project management education credits (contact hours) that count towards their eligibility for the PMP exam. Throughout the learning process, participants can earn points by participating in weekly discussions, engaging in team exercises and completing quizzes, which help track their progress.

In this course, you will learn:

• Project life cycle phases, process groups, and knowledge areas — according to the PMI Project Management Body of Knowledge (PMBOK)® Guide (7th edition).
• How to manage project scope, risk, communications and integration management.
• Project management language and processes.

Simplilearn’s PMP Certification Training Course is designed to help professionals prepare for and pass the PMP certification exam. The course covers various aspects of project management and the instructors train you based on the Project Management Body of Knowledge (PMBOK) 7th edition and the latest certification exam content outline.

The PMP Certification Training Course gives you access to digital materials from PMI, such as audio-video content, ebooks, assessments and participant guides. It also includes nine full-length simulation test papers with 180 questions each, as well as 35 contact hours with live virtual sessions.

This six-in-one course bundle provides comprehensive training on project management. The bundle includes the following courses:

• PMP certification training : It will prepare you for the PMP certification exam.
• Microsoft project training : You will learn how to use Microsoft Project to plan, track and manage projects.
• Agile scrum certification training : This course will teach you the principles and practices of agile scrum methodology.
• PMP exams and math lectures : It covers the essential math concepts and formulas needed to pass the PMP certification exam.
• Free PMP training : Offers a comprehensive overview of project management concepts and techniques, key principles and best practices.
• Free agile scrum training : This course introduces agile methodology and the scrum framework.

Whether you’re new to project management or looking to enhance your skills and knowledge, this bundle is a carefully curated resource designed to help you excel in your project management career.

Authored by experts from Rice Center for Engineering Leadership, this course is designed for professionals looking to specialize in engineering project management. This course will teach you how to initiate and plan engineering projects and provide tools to develop a project scope, schedule and budget. You’ll also learn how to manage risks, control the quality of the deliverables, engage and manage people and procure goods and services.

If you’re a software engineer with a knack for organization and leadership, you might find this project management course authored by Michael Krasowski interesting. The course teaches you the practical elements of working with customers, people, technology and processes. You’ll learn project management fundamentals, planning, control and execution.

Cybrary’s enterprise project management is designed for those who have achieved the PMP credential through PMI or those pursuing PMP certification. This course covers several project management aspects, including:

• Projects, operations and organizational progress.
• Building a project charter.
• Project planning, execution and closure.
• Organizational structures and agile planning.
• Business analysis and complex modeling.
• Enterprise project planning, execution and governance.
• Enterprise change management.
• Case studies.

Another great course for beginners is the Prince2 6th Edition Foundation online course. Prince2 has over 500K graduates worldwide and is a recognized leading project management course provider. This course will teach you how to create a business case, plan and manage change, as well as quality assurance, project scoping and deliverables.

Unlike the other project management courses we have reviewed so far, Cornell’s Project Management Certificate Program is an instructor-led online PM certification course. The program is designed for professionals who want to enhance their knowledge of project management. You will acquire 50 project management education hours towards your PMP certification when you complete this course.

When shopping for the best project management course for you, it’s essential to identify your learning goals. For instance, if you want to advance your career or look for higher-paying jobs, certification courses such as PMP or PRINCE2 can enhance your credibility and job prospects in the field. Your current professional stage and knowledge level will help you determine the kind of course to select:

• Zero or limited project management knowledge? Go for a beginner course.
• Need to widen your knowledge? Intermediate PM courses may help you align with the current industry trends.
• Need advanced certification to advance your career? Look for PMP courses from recognized providers similar to the ones we listed above.

Before settling for a particular course and provider, make sure you do your due diligence.

• Review the course syllabus.
• Consider the course delivery method, duration and flexibility.
• Consider the instructor’s qualifications and expertise.
• Consider the cost of the course and weigh it against the value you’ll gain.

Ensure that the course provider is accredited by a recognized body in the field of project management, such as the Project Management Institute, Certified International Project Manager or Certified Associate in Project Management.

We answered some commonly asked questions about online PM courses to help you determine the best course for you.

Which is the best certification for project management?

The best project management certification for you depends on your current career goals, experience level and industry. Whether you’re a beginner, intermediate or expert, the courses we analyzed in this guide are top-tiers and are suitable for different experience levels.

Is a PMP course worth it?

Yes, it is worth it 100%. For example, obtaining a project management professional certification can provide several benefits, such as career advancement, increased earning potential and industry recognition.

Are there free online project management courses?

Yes, there are several free project management courses. Cybrary’s enterprise project management is a free project management course.

Are online project management courses accredited, and does accreditation matter?

Not all online project management courses are accredited, and accreditation can be an important factor to consider when choosing a course.

Accreditation matters because it assures that a reputable organization has evaluated the course or certification program and meets recognized industry standards. Accredited courses are more likely to be recognized and accepted by employers and professional organizations.

What is the difference between project management certifications and online courses?

Project management certifications are designed to validate your knowledge and expertise in project management — they usually require passing an exam. They may have prerequisites, such as a certain number of hours of project management experience. Conversely, online courses are educational programs that provide you with knowledge and skills in project management. They may or may not lead to a certification.

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Project Financial Management: Managing Project Financials

Whether you call it project financial management or project accounting, managing a project’s finances is essential to delivering a successful project. It’s more than just keeping up with costs. There’s a lot of planning, managing and tracking involved.

But what exactly is financial project management? We’ll get to that and define the various project financials before getting into the process of managing a project’s finances. Then, to help you get started, we’ll have a few free financial management templates you can download.

What Is Project Financial Management?

Project financial management is the process of controlling the financial aspect of a project, such as its cost, revenue and profit. To do this requires planning, estimating, budgeting, funding, managing project expenses and billing.

The budgeting part of project financial management is by far the most important aspect of this process. Being able to effectively manage the budget over the life cycle of the project and making sure that all the planned tasks are completed without having to overspend is critical to the successful delivery of the project.

The importance of project financial management cannot be underestimated. It will help manage the overall project better and positively impact business growth. That’s because it balances the investment in the project with the expected return on that investment.

Other benefits include helping track progress with financial metrics, identifying and prioritizing projects that have a higher return on investment and managing project scope and cost overruns. It can also be helpful with improving resource management capabilities by better allocating resources based on your business’s strategic goals.

Naturally, project management software facilitates these benefits. ProjectManager is award-winning project management software that can track costs in real time to help you with project financial management. Our real-time dashboards give project managers a high-level overview of project costs whenever they want them. Dashboards have easy-to-read graphs and charts that track five other project metrics, too. Plus, there’s no time-consuming setup required as with lightweight alternatives. Get started with ProjectManager today for free.

What Are Project Financials?

Project financials are the money related to the project you’re managing. By planning, managing and tracking project finances, project managers can help deliver a profitable project. Project financials center around controlling the following.

Project Costs

Project costs refer to the total funds that a project requires. This includes direct costs, such as fixed labor, materials and equipment, as well as indirect costs that include utilities and quality control , among other things.

Project Revenue

Project revenue is what a project is expected to earn. It’s estimated by looking at historical data, such as past performance and using that information to predict future performance. It can be represented by target revenue, which is what the project is expected to earn and actual billing, what you bill your customer. It can also include the estimate at the completion of project billing, which is actual billing and the remaining labor billing which is planned billable expenses plus flat fees for all unfinished activities.

Project Profit

Project profit is the total amount of money that the project earns after expenses. Net profit for a project is the gross profit minus operating expenses and taxes.

Project Funding Sources

Project funding sources can come from many different sources. For example, debt is when those funds are raised from lenders. Companies can also issue bonds and sell them for funding. Equity financing is when a developer raises private equity funds. They can also get loans to finance the project.

Project Cash Flows

Project cash flows refer to cash moving in and out of an organization and determine the project’s rate of return or value. This money can be used to fund the project.

How to Manage Project Financials

Whether you’re working on a large, expensive project or a smaller one, managing project finances is essential to delivering that project on time and within budget. Following these 11 steps will help you better manage your project financials.

1. Clearly Define the Scope of Your Project

Before you can zero in on the costs, you need to understand the scope of the project. That includes the project goals, deliverables, tasks, and, of course, costs. Create a scope statement to ensure that you cover all the bases, such as the project schedule, and align the project with stakeholder’s expectations.

2. Identify Project Risks

All projects are risky endeavors. Unexpected events can have a positive or negative impact on the project. Therefore, one must plan for risks by identifying what might happen and then create a plan of action if it does. It also helps to prioritize their risks, note the likelihood of them happening, and, if they do, their severity.

3. Do a Feasibility Study

A feasibility study is used to evaluate the project and determine if it’ll be successful and, therefore, worth initiating. Before you can manage finances you need to see if the project itself is worth the investment. The feasibility study will help you identify potential issues and allow for a better evaluation of the project’s viability.

4. Create a Resource Plan

If the project is feasible, then you’ll want to create a resource plan. Resources are anything you need to execute the project, from people to equipment and materials. In other words, everything that costs money in a project. Therefore, it’s critical that you determine what those resources are and when they’re needed to allocate them accordingly based on your team’s capacity.

5. Estimate the Cost of Project Resources

Not only must you make a resource plan, but estimate the cost of those resources. They will be the bulk of the expenses for the project. Use historical data, expert advice and anything else you can to create the most accurate estimate for the project resources as they will be a large part of the overall project budget.

6. Conduct a Cost-Benefit Analysis

Another tool to figure out if the project is worth the time and money is running a cost-benefit analysis. This tool helps to evaluate the costs of the project against the benefits, which can be financial or otherwise. This practical, data-driven approach will help make investment decisions that are more likely to get a return.

7. Estimate the Return on Investment of Your Project

Speaking of a return on investment, that’s another metric by which to measure the potential project before starting it. In other words, you’re going to evaluate the project from a solely financial perspective to see what its profitability will be.

8. Know The Break-Even Point of Your Project

The break-even point in a project is when the total cost and the total revenue are equal. This is helpful when making a financial decision about a project especially if you’re launching a new product as it predicts how many units must be sold, which helps determine if the project meets market demand.

9. Make a Project Budget

Now you’re ready to make a budget. This should be the most accurate estimate for your project’s costs. You’ve already defined the project’s scope, now you want to use a work breakdown structure to identify all deliverables and the tasks necessary to complete them. You’ll also use the research in making the resource plan, set aside a contingency fund to cover unexpected expenses and then create the budget.

10. Secure Funding

This budget will be used to help secure funding for the project. This means coming up with a proposal that outlines your objectives, methodology and the expected outcomes for the project. It should sway potential stakeholders to fund the project because it’ll give them a return on their investment.

11. Track Cost Variance as the Project Is Executed

To ensure that the stakeholders who fund the project get that return on their investment, you’ll need to track cost variance. This means, comparing the actual costs of executing the project against what you planned for in the budget. This allows project managers to see if they’re spending as planned and, if not, adjust the schedule or scope to get back on track.

Project Financial Management Templates

Project management templates can help you manage project finances. ProjectManager’s website is an online hub for all things project management, including free project management templates for Excel and Word. We have free templates to help you with every phase of a project. Here are a few that can assist your project’s financial management.

Resource Plan Template

Our free resource plan template for Excel helps you list all your resources, the team they belong to and their rate, including the total cost of that resource. You’ll also have a calendar in which to schedule your resources across the timeframe of the project.

Project Estimate Template

Having accurate estimates is part of project financial management. Use our free project estimate template for Excel to help you create and keep to your budget. Our free template allows you to attach labor and materials costs to every task in your project.

Project Budget Template

Once you have accurate estimates, you’re on your way to making a project budget. Use our free project budget template for Excel to build that budget. Our free template lets you list all the tasks, who they’re assigned to and then the planned costs for labor, materials and more. Plus, you can track your spending to keep to that budget.

How ProjectManager Helps Manage Project Finances

While our free templates can help you get started with your project financial management process, you’re going to need project management software to be able to track those costs as you execute the project. ProjectManager is award-winning project management software that is online so the data you get is in real time, which gives you the advantage of catching discrepancies in your actual costs compared to your planned costs quickly so you can respond quickly and get back on track. But that’s only one small part of how our tool helps you manage finances.

Monitor Labor Costs With Timesheets

Labor costs are often your most expensive. If your labor resources aren’t executing their tasks according to the project schedule, you’ll be racking up extra costs in no time. Being able to keep track of your labor costs is essential to staying on budget. Our secure timesheets streamline the payroll process but also give project managers a window into the team’s work. You can see what percentage of their tasks have been completed and if that aligns with where they should be in terms of the larger project plan.

Use Reports to Get More Detailed Information

While project managers can get a high-level overview of their project’s finances with the real-time dashboard, when they want more details they can toggle over to the reporting features. There they can easily general status reports or portfolio reports if they’re managing multiple projects. They can also general reports on timesheets to track labor costs, project variance and much more. All reports are customizable, which means they can be filtered to show only the data you want to see. Then they can be shared in various formats with stakeholders to keep them updated.

Delivering your project to a successful completion takes more than financial management. That’s why our software has risk management, task management and resource management features to ensure you have the control over your project that you need to bring it in on time and within budget.

ProjectManager is online project management software that connects teams no matter where they are, in the office, out in the field or anywhere in between. Share files, comment at the task level and more to foster better collaboration. Join teams from Avis, Nestle and Siemens who use our software to deliver successful projects. Get started with ProjectManager today for free.

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Microsoft combines Microsoft To Do, Planner and Project into a new Microsoft Planner in Microsoft Teams

At Microsoft Ignite 2023 today, the company announced that it plans to bring together its various planning tools like Microsoft To Do, Microsoft Planner and Microsoft Project for the web into what it calls a “unified experience” that will first be available in Microsoft Teams in the spring of 2024, with the web version launching later in 2024. This new experience will go by the name of “Microsoft Planner.”

Tasks by Planner and the To Do app in Microsoft Teams will immediately be renamed to Planner, Microsoft explains in its announcement. Meanwhile, Microsoft Project for the web will only be renamed in the coming months — some rebrandings take longer than others, I guess.

Since every Microsoft service now comes with an AI copilot , there will be a copilot in Planner, too, which will be able to help users plan things faster and suggest new tasks. A dream for every planner.

The main goal here, it seems, is to bring together these three disparate experiences (to do lists, kanban-style planning tools and project management for more complex use cases) under a single umbrella that can scale from individual task management to full-on project management.

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This story was originally published at 8am PT on Nov. 15 and updated at 2:50pm PT.