Project Portfolio Management Process

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    Project Portfolio Management Process

    The Big Picture

    It is easy to get lost in the weeds of multiple, concurrent projects.

    Project portfolio management is the centralized management of multiple projects to ensure that projects are properly tracked and are working in concert with one another toward a common purpose. Project portfolio management allows organizations and project managers to stay on top of every aspect of their projects.

    Most importantly, project portfolio management will provide a birds eye view of the all the projects that are in process and those being considered and illuminate which projects are in sync with the organization’s overall goals and which are proving to be a detriment.

    What are the types of portfolio management?

    types of portfolio management

    There are five types of project portfolio management that are commonly discussed. These types are risk management, financial management, change control management, pipeline management, and resource management. Let’s take a look at each of these in a bit more detail:


    Risk Management

    Risk Management

    Perhaps one of the most important aspects of project portfolio management is taking stock of the risk in each individual project. Once the risks of the various projects making up the portfolio are identified, a plan is created to minimize the impact of these risks. Ideally, risk has been assessed for the individual projects during the planning phase so risk assessment at the project portfolio level can act as a check on that as well as be taken into context with the portfolio as a whole. Identifying risks at the global level of project management provides the opportunity to see how project may conflict with one another and what resources may need to be diverted to more important ventures.

    Financial Management

    Financial Management

    Taking a broader view of projects and contextualizing them against the entire portfolio allows for financial departments to estimate the value of a project to the organization’s strategy, overall goals, and relation to other projects. Management at the portfolio levels allows for better estimation and budgeting. Finances are limited and the need to prioritize the most beneficial projects is a critical function for any project portfolio manager.

    Change Control Management

    Change Control Management

    Change requests are an inevitable aspect of project management and customer relations. Project portfolio management organizes change requests and views them in the context of available resources and current, on-going projects. From this central database of change requests, resources can be efficiently matched to demand. When change control is centralized, communication these changes and the reallocation of resources can be seamless and effective.

    Pipeline Management

    Pipeline Management

    Steady, incoming work is the lifeblood of an organization. Pipeline management makes sure than an adequate number of proposals are coming in and assesses which are manageable and most beneficial to the organization. This can be thought of as a sort of vetting process for potential projects. This vetting makes sure that any proposals under consideration are worthwhile and support the organization’s goals. It is far better to weed out any projects that are not aligned with the organization than to get started on them and call it quits midway through.

    Resource Management

    Resource Management

    An organization’s resources are finite and, as such, need to be used strategically and efficiently. Resources are not only financial in nature. Resources can also include inventory, staff, design infrastructure, proprietary processes, and skill sets. Making sure these are deployed effectively across the portfolio is a key function of the project portfolio manager.

    What are the four steps in the portfolio management process?

    There are four essential steps in the portfolio management process. These steps work in concert with one another to provide a complete and thorough understanding of the organization’s project portfolio. These four steps are creating a project inventory, analysis, management, and readjustment.

    Creating project inventory

    The initial step in the process is to assess just what exactly makes up the organization’s portfolio. This involves assessing which projects are currently in the pipeline and determining if those projects are aligned with the over arching goals that guide the team. During this step, as much information about the projects should be gathered so that the most informed assessment possible can be made.


    All of the information that is gathered in the project inventory step is now considered and organized in the analysis phase. Each individual project in the portfolio is evaluated on its strengths, weaknesses, resource consumption and allocation, and return on investment. In this step, the projects are also categorized. These categorizations can be done based on what might be most useful to the organization but often they are organized by completion status and/or potential return on investment.


    In the third step, management, decisions are made. The analysis provided by the previous step is acted up on and projects either move forward or are put on the back burner. Most importantly, the decision about whether to allocate resources is made. This is a critical decision as it can directly impact every other project in the portfolio if resources are misallocated and could be better utilized elsewhere. Priority is placed in scheduling projects when they make the most sense for the organization in context with their goals and values.


    Every good project manager - and project portfolio manger - understands the importance of post-implementation assessment and readjusting course if the assessment calls for it. Soliciting feedback from stakeholders and team members involved in the portfolio can provide valuable information that may change a process for the better. Learning from experience is the best way to move a process forward.

    What is the difference between project management and portfolio management?

    Defining processes and roles is a critical part of making sure that everyone involved in a project understands their specific tasks and responsibilities. With that in mind, it seems worthwhile to differentiate project management from project portfolio management.

    The distinction between the two simply lies in the number of projects that are involved. Project management focuses on a singular project and the completion of that project from start to finish. Project portfolio management takes into account all of the projects that an organization has in its pipeline and works to have these projects be in concert with one another.

    One way to think about their relationship is that portfolio management is the project management of other projects. Many of the same principles of project management can be applied to the larger, grand view of a project portfolio. A similar analogy can be drawn between a front line manager and a CEO. The frontline manager is concerned with their singular department and the tasks that are required of them. A CEO is tasked with taking a much larger, long term view of the organization as a whole.

    What is the Role of the Project Portfolio Manager?

    Project portfolio managers are responsible for the high level management of an organization’s project strategy. These project professionals must take into account financial limitations, opportunities, and goals to determine the best way forward for a team.

    While project managers are responsible for a specific project, portfolio managers are tasked with overseeing the strategic value of all the organizations ongoing and potential projects. Additionally, project portfolio managers see how these projects interact with one another and stave off potential resource allocation issues and seek to minimize any perceived risks.

    Project Portfolio Management Software

    In today’s project management world, managers have tremendously powerful tools at their disposal. Project portfolio management software helps to automate complicated processes and help managers create efficiencies.

    Frankly, project portfolio management can be complicated when you consider that there are many concurrent processes, resource needs, and financial constraints. A solid and dependable portfolio management software helps relieve this burden. Project portfolio management features often include:

    • Centralized resource planning
    • Financial forecasting
    • Project status and health
    • Milestone tracking
    • Organization of portfolio backlog
    • Real-time access to information
    • Sprint board tracking

    Selecting the Best Project Portfolio Management Software for Your Organization

    When it comes to choosing the right project portfolio management software for your team, you might find that there is an ever expanding number of options. It is important to know exactly what it is that you want from your tools before wading into the sea of options. Implementing a system can take considerable time and resources and that is why it is critical that they decision be thoroughly vetted from the outset. Here are a few questions that a project portfolio manager should consider before making a decision.

    • What are the most important features for the organization?

    • Is the project portfolio management software compatible with other systems used by the organization?

    • Is the software within the organization’s budget?

    • Does the tool allow for remote collaboration?

    • What support is available for the software?

    • How much training is provided to staff during implementation?

    • What are the specifications for security with the tool?

    Benefits of Project Portfolio Management

    There are numerous benefits to using Project Portfolio Management software. The overarching, all-encompassing benefit is the structure and organization that it provides to an organization’s project management approach. Here are some of the more specific benefits that organization’s can expect with the implementation of project portfolio management software:

    Stand back and see the big picture

    As with almost anything in life, it can be very difficult to see the forest for the trees. Project portfolio management seeks to provide a bird’s eye view of the organization’s complete portfolio to better assess if proposed projects will fit into the overall goals and initiatives of the organization. This will result in better decision making and projects that are aligned with one another.

    Centralized planning

    An important project portfolio management benefit for organizations that take on an especially large number of projects is centralized planning. When a number of highly trained and skilled project managers are at the helm of their respective projects, it is in the best interest of an organization to make sure that there is someone who is keeping tabs on the progress of the projects, the resource allocation, timelines, budgeting, and alignment with organizational goals.

    Project risk assessment

    A core component of project portfolio management is the assessment and minimization of risk. The minimization of risk can have a ripple effect on individual projects as well as the larger portfolio. In addition to providing a smoother path to success for the agreed upon plan, an absence of risk will foster a confident and assured project team. The global view of portfolio management allows for fixes to be in place for potential risks well before the various projects begin. Identifying bottlenecks, ensuring projects are aligned with organizational goals, and using measurable data and metrics will yield the best results.

    Efficient communication

    Organizations that are working on several projects concurrently often find themselves with teams that are scattered across states, countries, and even continents. Centralized and efficient communication becomes a necessity when managing large teams remotely. A quality project portfolio manager working with a great software can easily understand how projects are unfolding and what their resource requirements are no matter how spread out their workforce might be.

    Enhanced reporting

    A tool for any good manager - regardless of industry or level - is solid reporting. Reporting needs to based in easily understood metrics and must easily accessible at any moment. A great project portfolio management software will provide managers with these tools. Reporting allows for managers at every level of an organization to predict resources needs, monitor budgeting, and turn a critical eye toward return on investment.

    Project Portfolio Management is a Roadmap to Success

    There are numerous benefits to using Project Portfolio Management software. The overarching, all-encompassing benefit is the structure and organization that it provides to an organization’s project management approach. Here are some of the more specific benefits that organization’s can expect with the implementation of project portfolio management software:

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