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Here’s everything you should know about project portfolio management

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Do the projects you take on align with your overall business and growth strategy?

Your gut instinct probably tells you, “Of course! We wouldn’t do this if it didn’t make sense.”

That’s partly true, or at least the original intent behind it was in alignment with your strategy.

Yet over time, projects can lose direction. Once profitable projects lose their edge, and long-term bets sometimes fall flat.

That’s where portfolio project management comes into play.

Portfolio project management avoids overspending, removes inefficiencies, manages change more effectively, allows for better decision making, and helps you prioritize high-value projects.

All good things.

While nobody can predict the future, that won’t stop a good project portfolio manager from trying.

This article will ask and answer the most important questions around project portfolio management, ensuring you know everything you need to (and we’ll also offer some helpful tips and tools along the way).

What is project portfolio management?

Project portfolio management (PPM) is the selection, prioritization, and control of an organization’s programs and projects.

Every organization has a mission and vision. The mission encompasses what that organization does day-to-day, along with its objectives and approach. The vision is where the organization sees itself a few years or a few decades from now.

Often, that future vision is an enhancement of an organization’s current way of doing business or their position in the market. No matter the reason, an organization has to take action to materialize their vision. Perhaps they need to develop technology, change up their product mix, or hire people.

The restructuring and changes come by way of developing a group of initiatives we call a portfolio. 

These initiatives are often projects or large scale programs deployed with the aim of reaching their strategic vision.

Often an organization decides on a strategy, and it’s up to the portfolio manager to select the programs and projects that will deliver results that align with said strategy.

Some everyday use cases for PPM are:

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

Now that you know what project portfolio management is, it’s time to dig into the purpose…

What is the purpose of project portfolio management?

The goal of project portfolio management is balancing risk and reward. Your strategic objectives revolve around selecting the right projects that satisfy the long-term strategic goals of your stakeholders.

In financial terminology, project portfolio management is a lot like hedging, which is just a fancy term that means offsetting your potential losses.

A great example of hedging is buying insurance — spending money each month for a service that protects you if you ever get sick or into a car accident.

It’s a bit more complex in portfolio project management, since you’re dealing with investments with varying risk levels:

There’s no way of knowing for sure which project management investment will pay off, but spreading your investment across a wide array of projects ensures your overall performance will be more successful.

Ultimately, project portfolio management helps you and your team keep stakeholder strategy and big-picture objectives top of mind.

What are the main differences between project management and portfolio management?

Portfolio project management focuses on project selection while project management focuses on task breakdown.

When combined, it’s ultimately doing the right projects right, which sounds great in theory.

Where it gets complicated is in the execution. 

The line between portfolio management and project management is often blurred, as people attempt to do both under the heading of project management.

To illustrate the differences visually, here’s a screenshot of the Portfolio Management Template in provides custom dashboards and workflows for your portfolio management needs.

As you can see, the Portfolio Management view focuses on portfolio status, investment, risk, valuation, and satisfaction.

With project management, the focus is more granular. Check out the Product Roadmap Template below as an example: provides high-level and granular workflow views for project management

As you can see, the project management dashboard is less high-level and more detail-oriented per Workflow. You know who is working on what, the status, and a rough timeline.

What’s the difference between a portfolio and a program?

Programs are the driving force behind projects. They’re typically a set of related projects that come together to deliver a specific outcome.

Here’s an example program scenario:

Let’s say you’re running a program providing polio vaccinations in a third-world country. The program consists of several projects, including…

  • A research project to understand the area’s needs.
  • An educational or public relations component to help people understand the importance of vaccinations.
  • An infrastructure project that provides the facilities and means necessary to implement an immunization campaign.

Portfolios are concerned with the company’s strategic objectives. You set organizational goals for portfolios that ultimately provide shape to your projects, programs, and daily operations.

Here’s an example of a portfolio:

An automotive manufacturer manages a product line consisting of cars, trucks, and sport utility vehicles (SUVs).

Each line may be a portfolio in itself. For example, their truck line may have a portfolio dedicated to managing manufacturing, operations, and new model development.

With said portfolio, there may be programs composed of multiple projects to achieve a strategic goal (like creating an electric truck model by 2025).


The 5-stage project portfolio management process

The following phases encompass what a typical portfolio management process goes through from the beginning all the way to monitoring.

You’ll notice there’s no closure stage like that found in the project lifecycle. Unlike projects, portfolios can go on indefinitely, as new projects and programs are added.

1. Decide on strategic objectives

Coming up with strategy objectives requires asking yourself the right questions:

  • What strategies and investments have the greatest reward?
  • Which of them have the greatest risk?

Breaking down the costs and benefits associated with each option makes it easier to develop a strategy map outlining your objectives and top priorities.

Now that your strategy map is in place and you’ve got in an actionable list of projects, it’s time to assemble an implementation team full of technical staff and portfolio managers.

Ideally, you’d appoint a governing body composed of senior stakeholders or senior managers to keep tabs as well.

2. Research potential projects

Take inventory of your current project list and identify and categorize growth, survival, completed, and canceled projects.

As you sift through them, take the time to consider whether some projects should cease operations or combine with other projects to increase efficiency.

From there, make time to analyze the current state of your project portfolio and ask yourself:

  • What are its strengths?
  • What are its weaknesses?
  • What opportunities are ahead?
  • What risks may you encounter?

Our SWOT analysis template can help with this.

Evaluate all projects based on potential ROI, resource allocation, milestones, and reporting schedule.

3. Narrow your project list

Project selection is made considerably easier thanks to the data you collect in the previous 2 stages.

The ultimate goal of project prioritization and selection criteria is to devise a tentative portfolio that maximizes return and balances risk.

Here are some useful risk analysis methods worth considering:

  • Ranking Method: 1-10 scale based on important metrics like rate of return, stakeholder benefits, resource allocation, and capacity planning.
  • Scoring Model: similar to the ranking method but with weight added to metrics that may have greater importance like strategic alignment, risk, and ROI.
  • Analytic Hierarchy Process: an advanced approach that pits all criteria against each other in an apples-to-apples fashion that prevents error or bias.

4. Portfolio validation

Set aside time to expand on the high-level data gathered in previous steps to create a realistic view of the necessary resources to complete your projects.

Are they all feasible considering your available resources and current capacity?

It’s also an excellent time to put contingency planning into action. Anticipating potential setbacks and how you’ll handle them should they arise can save you future headaches and give you peace of mind now.

You’re now ready to commit resources to projects and take the next step toward implementation.

5. Manage and monitor

As projects launch, they’ll need management and oversight.

The project portfolio manager regularly assesses performance and makes adjustments as necessary.

Adjustments can include reallocating resources, rescheduling projects, re-scoping, and reviewing the portfolio in its entirety.

It’s in the management and monitoring stage that a reliable PM tool becomes absolutely necessary (not that it wasn’t before, of course).

Project portfolio management tools

As you can see, project portfolio management is both complex and high-impact.

Project portfolio management keeps everyone on the same page and ensures nothing slips through the cracks.

However, a strategy is only as good as its implementation and the ppm tool you use.

If you haven’t already, then it’s time to ditch the whiteboards, sticky notes, and legal pads and invest in project portfolio management software.

Get started with

Capterra has in the top spot for project portfolio management software. Let’s analyze why…

  1. For starters, it has pre-built Portfolio Management Templates that are easy-to-use, customizable, and chock full of useful columns and structures pre-built for your convenience.

Or you can start from scratch and build your own boards and dashboards.

You can create:

  • High-level portfolio boards for your PMO office and portfolio managers
  • Low-level boards for your project managers
  • Workflow-level boards for your technical staff and everyone else

Here’s a Project Planning Template to help keep individual projects on track and aligned with your portfolio strategy.

Project portfolio management is the driving force behind the company's strategy.

  1. has custom Automations that eradicate busy work and virtually eliminate human error.

Set up an automated system to send notifications for key events, automatically assign owners, and update statuses — all without lifting a finger.

  1. Stay on top of your entire portfolio with 8+ different data visualizations including Gantt, Kanban, timeline, sheet, calendar, workload views, and more.

Portfolio managers can stay high-level when needed or drill down into the minutia to keep tabs on project progress.

Those features merely scratch the service for what offers to project portfolio management. You can also expect the platform to help you…

  • Tap into your existing Workflow with 35+ Integrations
  • Stay mobile with Android and iOS apps
  • Communicate and collaborate with real-time messaging and tagging
  • Utilize hundreds more customizable management templates
  • Track resource management and workload to see who’s underutilized and who’s overworked

Final thoughts

High-level ambitions and advanced strategy shouldn’t be left to spreadsheets, sticky notes, and a legal pad.

Portfolio project management deserves a true work management platform that allows PMOs to strategize, track, and deliver their best work. checks all the boxes and delivers best-in-class functionality and support so you can rest assured that you’ve always got a pulse on your portfolio.

You won’t quite be on a soothsayer’s level who’s accurately predicting the future, but you’ll be closer than ever before with in your corner.

What are you waiting for? Get started with’s project portfolio management templates today.

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