According to the Standard for Portfolio Management by PMI, Portfolio Management is the centralized management of one or more portfolios to achieve strategic objectives. It focuses on ensuring that projects, programs, and other related work are reviewed to prioritize resource allocation and align with the organization ' s strategic goals.
Strategic Alignment: The primary goal of a portfolio is to ensure that the " right " work is being done. This involves identifying, prioritizing, authorizing, managing, and controlling projects and programs to ensure they align with the business strategy.
Resource Prioritization: Unlike project or program management, which focus on execution and " doing the work right, " portfolio management focuses on resource optimization across the entire organization. It ensures that limited resources (financial, human, and material) are allocated to the highest-priority initiatives that provide the most value.
Performance Review: Portfolio management involves continuous monitoring of the aggregate performance of all components. If a project no longer aligns with the shifting strategic goals of the company, portfolio management provides the framework to de-prioritize or terminate it to reallocate those resources elsewhere.
Comparison with Other Options:
Project Management (A): Focuses on achieving specific project objectives and deliverables within constraints like time, cost, and scope.
Functional Management (B): Focuses on providing oversight to a specific administrative or functional area of the business (e.g., Human Resources, Finance, or Engineering).
Program Management (C): Focuses on managing a group of related projects in a coordinated way to obtain benefits and control not available from managing them individually. While it involves resource coordination, it does not have the broad strategic prioritization authority of a portfolio.
