Portfolio management is a corporate, strategic level process for co-ordinating successful delivery across an organisation’s entire set of programmes, projects and other related activities.

What is a portfolio?

The total set of programmes, projects and other activities is known as the portfolio. It represents a complete picture of the organisation’s resources and investment in delivery of its strategic business objectives. Portfolio management provides an overview of the organisation’s total investment so that:

  • programmes and projects can be scrutinised and monitored to make sure they remain aligned with strategic objectives; for example reform, modernisation or sustainability
  • the overall complement of skilled programme or project resources is used most effectively
  • new requirements can be evaluated against current commitments
  • the impact of programmes and projects on business as usual work can be managed at corporate level

Diagram illustrating an example of how portfolio management could be applied.
An example of how portfolio management could be applied.

The key phases of portfolio management have been identified as:

  • collection of information
  • categorisation and analysis
  • prioritisation and decisions
  • tracking progress and taking action
  • review and re-planning

Purpose of portfolio management

Most organisations operate in complex environments with a lot of programme and project activity going on at the same time. Portfolio management can help with:

  • selection - establishing a process for selecting the right programmes and projects
  • capacity -  assessing if requirements can be met within existing organisational capacity and resources
  • prioritisation - allocating the right resources to the right programmes and projects
  • alignment - ongoing alignment with strategic objectives
  • conflicts - resolving conflicts over scarce resources
  • interdependencies - identifying and managing programme and project interdependencies
  • risk - assessing the true level of aggregate programme or project risk
  • progress - monitoring progress against key outcomes
  • delivery - managing successful programme and project delivery
  • investment - optimising investments and maximising returns
  • efficiency - achieving value for money savings and efficiency gains from programme and project rationalisation
  • benefits - co-ordinating and measuring benefits realisation across the organisation’s programmes and projects

Portfolio management roles and responsibilities

While they will vary depending on the size and nature of the organisation, the main roles and responsibilities associated with effective portfolio management are:

  • ministers - are accountable for the successful delivery of a department's strategic objectives, some of which may be through programmes and projects
  • management board or permanent secretary - for making informed decisions on all or a subset, typically mission critical, of the programmes and projects in the portfolio
  • investment decision makers - for making informed investment decisions
  • Centre of Expertise for Programme and Project Management - for creating the programme and project register and for monitoring the agreed portfolio on behalf of the management board; also for providing dashboard information to inform the board's decisions
  • senior responsible owners - are accountable for the successful delivery of programmes and projects
  • programme managers and project managers - managing the delivery of programmes and projects, providing the Centre of Expertise with progress reports and responding to required changes
  • operational business owners - for accepting or receiving new capability and operational changes on behalf of the business; leading the integration of these changes into the new business as usual position
  • business change managers - for driving benefits realisation across the portfolio
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