Portfolio Management
Coordinated oversight of one or more portfolios to steer the organization toward its strategic goals.
Key Points
- Aligns investments (projects, programs, and operations work) with organizational strategy.
- Prioritizes, authorizes, and can pause or terminate components based on value, risk, and capacity.
- Balances the portfolio to optimize resource use and overall return, not individual project success.
- Uses governance, metrics, and reviews to monitor performance and adjust the mix of work.
Example
A company reviews all proposed and ongoing initiatives each quarter. It cancels a low-value app project, accelerates a cybersecurity program due to regulatory risk, and shifts staff to a data platform effort that best supports the 3-year strategy.
PMP Example Question
Which action best illustrates portfolio management?
- Creating a work breakdown structure for a project.
- Managing interdependencies within a program to realize benefits.
- Selecting and reprioritizing projects to align with strategic goals and reallocating resources accordingly.
- Controlling scope changes on a single project.
Correct Answer: C — Selecting and reprioritizing projects to align with strategic goals and reallocating resources accordingly
Explanation: Portfolio management is about choosing and balancing the mix of work to support strategy; program and project activities focus on delivery and benefits within components.
