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Project Management - What is Project Portfolio Management?

Updated on March 29, 2015
Project portfolio management allows a business to manage projects across multiple teams, processes and business areas
Project portfolio management allows a business to manage projects across multiple teams, processes and business areas | Source


In project management, project portfolio management (PPM) is the function that allows more than one project to be successfully run at the same time. It focuses on minimizing the risks and dependencies between the projects, ensures that there are enough resources in place to deliver all of the projects in the portfolio and provides a centralized way to run projects effectively.

Project Portfolio Management is an essential part of the project management organization in larger businesses. Good PPM allows multiple projects and programs to run simultaneously without causing risks, issues or other problems. In this article we explore the main functions of PPM and how they can enhance the likelihood of projects delivering successful business outcomes.

Project management in large organizations

There are normally three levels of 'project' management in a large organization. These are:

  • Projects - Individual, defined, time-bound, budgeted pieces of work designed to create change in a product, service or process. Overseen by individual project managers.
  • Programs - Collections of projects that are designed to deliver a similar outcome, are affecting the same area or are of the same type. Overseen by a program manager.
  • Portfolio - The overall collection of all of the projects and programs that a business is running.

The Project, Program and Portfolio Management Office

PPM is part of the project management area in most larger businesses and is normally comprised of a team of people, collectively known as the 'Project, Program and Portfolio Management Office' (PMO). This team is responsible for the following areas:

PPM allows you to coordinate project phases and deliverables across multiple teams
PPM allows you to coordinate project phases and deliverables across multiple teams | Source
  • Providing a centralized way to manage projects, ensuring that projects follow a common framework of management and methodologies. This will involve providing resources, training, advice and support to various project management personnel, for example:
    • Creating a central repository of standards, policies, documents, templates and best practices for project managers and teams to use.
    • Defining a central framework and process that projects can follow. In larger organizations, there may be separate frameworks for projects that need different techniques (e.g. one framework for agile / lean projects, another one for traditional / waterfall projects).
    • Training staff in project and portfolio management techniques.
    • Supporting employees by answering questions and giving advice on the best approach to take with project management.

There are better ways than this to manage groups of projects
There are better ways than this to manage groups of projects | Source
  • Allowing program managers, project managers and the PMO to effectively manage and deliver projects across the business simultaneously.
  • Managing risks, dependencies and issues between projects and programs so that none of the projects or programs are negatively impacted by each other.
    • A 'dependency' is something that needs to happen before a project can progress a necessary piece of work.
    • A 'risk' is something that could happen that would negatively impact the project.
    • An 'issue' is something that has happened that is negatively impacting the project.

Understanding the dependencies between projects is essential
Understanding the dependencies between projects is essential | Source
  • Managing constraints and restrictions introduced by the business, other projects or external activities.
    • Understanding what is happening in the business and how that could impact on project or program delivery.
    • Monitoring external factors and managing any risks that they may introduce to business projects.
  • Providing an overview of availability, resources and activities.
    • Availability - The individuals and teams that are available to complete various project activities.
    • Resources - The budget and other resources that are available.
    • Activities - The various tasks that individuals and teams are involved in.

  • Communicating and reporting on the progress of projects and programs.
    • Providing reports to business and other stakeholders.
    • Tracking and communicating the overall progress of projects towards their goals.
    • Flagging potential delays, risks, issues and constraints to the relevant areas.

Portfolio management vs. project management

Read more of our helpful, expert guides to successfully managing a project:

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In closing

Although project portfolio management will not normally be needed in a small business, once an organization has a reasonable number of employees and needs to run more than one project at a time, some level of PPM will probably be required. Good PPM can ensure that all of the various projects and programs in a business can deliver smoothly and enhance business outcomes.


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