What is Project Portfolio Management?

Jordan McElwain
May 1, 2018

What is Project Portfolio Management?

Project portfolio management is the organization and management of all projects within an organization from a high-level perspective.

Project portfolio management (PPM) can sometimes be confused with project management. However, they are very different. To point out the differences, we’ll briefly go over what project management is first. Then, we will continue with an in-depth explanation of project portfolio management.

What is Project Management?

The most important thing to note about project management is that a project manager is usually responsible for a specific project’s tasks. The project is meant to result in a specific product, service, feature, etc.

A project manager (PM) could have multiple projects that they are responsible for managing. However, each project runs separately. A PM usually works with a project team, and that person is responsible for task management and team collaboration.

A project manager may have tasks including:

  • Making project objectives, milestones, and tasks clear
  • Assigning people and deadlines to tasks
  • Planning and keeping track of a project’s roadmap
  • Ensuring that tasks are completed on time and milestones are hit
  • Keeping track of the budget and other resources
  • Understanding and preventing risks
  • Managing the project team to achieve success

A project manager may have skills including:

  • Technical skills required to understand and complete a project
  • Team management skills
  • Stress management skills
  • Organization and planning skills


Diagram Illustrating project portfolio vs project managment
Image via Priporitysystem.com

Now Let’s Take a Look at Project Portfolio Management

Project portfolio management (PPM) involves the understanding all of the projects in an organization and how they fit together with a company’s vision.

Larger companies have a project management office (PMO). This department handles project portfolio management responsibilities. Smaller organizations may have a project management lead or VP that handles PPM.

The PMO or project portfolio manager is a central knowledge source. This person is able to understand all of the projects a business is undertaking on a strategic level. Project portfolio management involves a person deciding which projects to take on and which to defer.

Don’t Have a Project Management System?

Companies that don’t have a project portfolio management system in place often run into issues including:

  • Running too many low-impact projects
  • Lack of project coordination in the service of higher-level business goals

This could result in employees feeling like they are not having an impact. Also, employees could become confused about what impact they’re supposed to be making.

Often times in these situations, companies find themselves pausing or even canceling projects. This could be due to the fact that those projects don’t align with the company’s mission and vision.

Without project portfolio management, the overall business strategy could be neglected and projects may conflict with each other.

The Importance of a Project Portfolio Management System

With a PPM system in place, a company has more of a “top-down” approach. This allows for a company’s overall vision and business strategy to guide the development of projects.

A project portfolio manager will ensure that the most important, highest-impact projects are prioritized. They will also make sure the less important, low-impact, and more risky projects are deferred.

A project portfolio management system also ensures that necessary resources are available for current projects. PPM allows for resource planning and resource conflict resolution. This increases the value output of an organization.

Project Portfolio Manager’s tasks may include:

Strategic alignment

  • Defining the mission and vision of the organization
  • Choosing and focusing on projects that align with the mission and vision

Human resource management


  • Understanding the financial budget of the business
  • Making decisions about headcount, outsourced services, tools, and more

Building roadmaps

  • Being able to build roadmaps for teams and projects
  • Being able to include smaller tasks and bigger milestones in the roadmap

Training and coaching PMs

  • Training project managers
  • Introducing PMs to different PM methods, tools, and technologies 
  • Aligning the PMs with the overall business strategy and organization vision

Monitoring project progress

  • Ensuring milestones are achieved throughout the project
  • Make sure tasks are completed on time

Cross-project collaboration

Project support

  • Providing support to project managers when it comes to reducing risks
  • Helping to resource the proper people and tools

What Makes a Project Portfolio Management System Successful?

Making the business strategy clear

The most important step that a project portfolio manager (PPM) or project portfolio organization (PPO) needs to take is to create a clear business strategy. 

It could be difficult to determine if a project is in alignment with overall business goals. Therefore, a clear business strategy can help with this.

The manager’s business strategy may be made up of multiple smaller goals. However, the strategy should still have one clear statement, your organization’s vision.

Each of the smaller goals needs to support the company vision, as well as each of the projects. If a project doesn’t align with your vision, then the project shouldn’t be considered.

Ensuring that the highest-impact projects are prioritized

After a PPO has determined the business strategy and the projects that align with the strategy, they are not finished. Then, the PPO must make sure that the highest-impact projects are prioritized first.

Whichever project will achieve an overall vision the quickest, or whichever one will make the biggest steps toward achievement of your vision, should be started first.

A PPO should be able to take ideas and understand business cases to determine which projects to take on first.

Understanding risk

Every project will have some risk, and ultimately, any project could fail. A successful project portfolio management team will be able to understand the risks involved in different projects. From there, the team should be able to determine if the risk is worth the reward.

Successful PPOs and PPMs take informed risks and are able to justify losses when they occur. They are also able to reduce risks.

Knowing when to defer a project

There may be times when a project is too risky. There may be times when an organization doesn’t have the proper resources to complete a project. When this happens, a PPO may have to delay a project even if it seems like a “must-do”.

Damaging the path to accomplishing the vision or burning out human resources will hurt a company in the long-run. Therefore, delaying certain projects can be worth it.

Finding the right tools to simplify things

Sometimes there simply aren’t enough resources. As a result, PPMs need to understand when to spend the budget on tools in order to save time and human resources. This allows PMs and project teams to have the right tools to complete projects efficiently.

Staying on top of communication and reporting

Communication goes many ways. A successful PPM will ensure that project teams are communicating well with each other and with other teams. A PPM should make sure that there are systems in place to communicate wins, losses, learnings, and any other important information among teams.

PPMs and PPOs should also be able to communicate the progress of projects to project teams, project managers, executives, and other stakeholders. To do this, PPMs/PPOs need to understand the reporting structures of teams. They will need to be able to explain the reporting at a high level.

The PPM/PPO should be able to see the big picture. Thier job is to understand how each of the current projects works with other projects. This system helps an organization achieve success according to the company’s overall vision.

About the Author

Jordan McElwain

Sign up to receive more buyer resources and tips.