What is a portfolio

Definition

In PMI's Standard for Portfolio Management, a portfolio is the projects, programs, subsidiary portfolios and operations managed as a group to achieve strategic objectives. Ongoing operations belong in it too, because they draw on the same people and money as the projects. Managing a portfolio means choosing: list every candidate, compare each one against the goal of the year, draw a line where people and budget run out, and say no, or not yet, to what falls below it. A program serves one goal, while the portfolio is the whole basket, chosen against the strategy. In everyday language the word also means a portfolio of work, such as a designer's samples, or a portfolio of investments. This page is about the project management sense and gives no investment guidance.

Why it matters

A portfolio turns the unspoken no to the other projects into a decision: the list is ordered against the year's goal, the line is drawn where capacity ends, and what sits below it is parked on purpose, with a reason. Without it, projects are approved in the order they arrive, too many run at once, and the important ones stall for lack of the same few people.

Directly related: Project, Program, Business Strategy.

Improvement tips

• List every candidate project, program and ongoing commitment on one page before you approve a new one.
• Compare each item with the one goal of the year, so the order comes from the strategy and not from who asked first.
• Draw the line where people and budget run out, and write one reason next to every item below it.
• Review the list at a fixed interval, such as once a quarter, and move items across the line when the facts change.

Common mistakes

• Leaving ongoing operations off the list, although they use the same people as the projects.
• Running more big items at once than the team can carry, so all of them move slowly.
• Treating a parked project as a failure instead of a decision that can be revisited.