Defining Project Portfolio Management
By Jennifer Whitt
We get so many questions asking, “What’s the difference between project management, program management, and portfolio management?” People are daunted by the idea that it is complex, but we think it’s simple once you look at the definition and concepts of portfolio management. In A Guide to the Project Management Body of Knowledge, 4th Edition (PMBOK ) by the Project Management Institute (PMI), a portfolio is a collection of projects or programs or other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. A key that I want to point out here is that a collection of projects is for a strategic business objective. How many times has your team become so concerned about task, activities and deliverables that they forget or lose sight of why they are doing what they’re doing? The big picture is lost on all the details. So it is really to meet a strategic business objective.
I often reference two groups of people that I have learned a lot from, my artist friends and my financial portfolio managers. All artists, whether artistic in drawing, music or other areas, talk about how different compositions within their portfolio express their heart, emotions, mission or whatever it is their collection supports. In financial management, a diversity of investments completes a group representative of the client’s goals and interests thus showing the characteristics typical to their investments. Likewise for a business, groups have strategic business objectives, and many projects and/or programs have to be implemented to meet those objectives.
Within the business selection there are projects, programs, and other work to support the portfolio. A portfolio project could be broken down into phases or levels of importance, i.e., when implementing things over time. Another project within that same collection may just have one high level deliverable. There could be programs with multiple projects, and then other work that simply supports the portfolio and business objectives. Portfolio management is the centralized management of all of these pieces combined. The portfolio manager is basically identifying what projects have to be done, prioritizing, authorizing, managing and controlling them. It is very similar to how projects, programs and other types are managed. I hope this helps you in understanding what portfolio management is, how simple it can be and how important it can be to keeping everything organized.
Jennifer Whitt, PMP is a speaker, trainer, Certified Performance Coach, author, and company president of PDUs2Go.com. She is a PMI-certified Project Management Professional (PMP) and knows how difficult it can be to make time for classroom or online learning so she has developed a new way for Project Managers to Earn n’ Learn while on the go. For more information, please visit http://www.pdus2go.com