science

Project portfolio management

Project portfolio management is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Project portfolio management rather than just read about it. In short: Project portfolio management (PPM) is the centralized management of the processes, methods, and technologies used by project managers and project management offices (PMOs) to analyze and collectively manage current or proposed projects based on numerous key characteristics. The objectives of PPM are to determine the optimal resource mix for delivery and to schedule activities to best achieve an organization's operat…

Key takeaways

Project portfolio management belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Project portfolio management to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Project portfolio management from memory before moving on to harder problems.

Reference excerpt

Project portfolio management (PPM) is the centralized management of the processes, methods, and technologies used by project managers and project management offices (PMOs) to analyze and collectively manage current or proposed projects based on numerous key characteristics. The objectives of PPM are to determine the optimal resource mix for delivery and to schedule activities to best achieve an organization's operational and financial goals, while honouring constraints imposed by customers, strategic objectives, or external real-world factors. Standards for Portfolio Management include Project Management Institute's framework for project portfolio management, Management of Portfolios by Office of Government Commerce and the PfM² Portfolio Management Methodology by the PM² Foundation.

Key capabilities PPM provides program and project managers in large, program/project-driven organizations with the capabilities needed to manage the time, resources, skills, and budgets necessary to accomplish all interrelated tasks. It provides a framework for issue resolution and risk mitigation, as well as the centralized visibility to help planning and scheduling teams to identify the fastest, cheapest, or most suitable approach to deliver projects and programs.

Pipeline management Pipeline management involves steps to ensure that an adequate number of project proposals are generated and evaluated to determine whether (and how) a set of projects in the portfolio can be executed with finite development resources in a specified time. There are three major sub-components to pipeline management: ideation, work intake processes, and Phase-Gate reviews. Fundamental to pipeline management is the ability to align the decision-making process for estimating and selecting new capital investment projects with the strategic plan.

Resource manager

The focus on the efficient and effective deployment of an organization's resources where and when they are needed. These can include financial resources, inventory, human resources, technical skills, production, and design. In addition to project-level resource allocation, users can also model 'what-if' resource scenarios, and extend this view across the portfolio.

Change control

The capture and prioritization of change requests that can include new requirements, features, functions, operational constraints, regulatory demands, and technical enhancements. PPM provides a central repository for these change requests and the ability to match available resources to evolving demand within the financial and operational constraints of individual projects.

Financial management

With PPM, the Office of Finance can improve their accuracy for estimating and managing the financial resources of a project or group of projects. In addition, the value of projects can be demonstrated in relation to the strategic objectives and priorities of the organization through financial controls and to assess progress through earned value and other project financial techniques. It is an important part.

Risk management

An analysis of the risk sensitivities residing within each project, as the basis for determining confidence levels across the portfolio. The integration of cost and schedule risk management with techniques for determining contingency and risk response plans, enable organizations to gain an objective view of project uncertainties. At the portfolio level, risk management enables organizations to protect portfolio investments and balance the level of risk in the portfolio.

The history of project portfolio management The roots of project portfolio management can be traced back to financial theories that emerged in the 1950s, often linked with the pioneering work of Harry Markowitz, which was later recognized with a Nobel Prize. In essence, portfolio theories underline the importance of coordinating diverse elements to mitigate collective investment risks. These theories enable the optimization of portfolio benefits, the effective utilization and cultivation of limited resources, and the proper consideration of portfolio stakeholders.

Enterprise project portfolio management

Enterprise project portfolio management (EPPM) is a top-down approach to managing all project-intensive work and resources across the enterprise. This contrasts with the traditional approach of combining manual processes, desktop project tools, and PPM applications for each project portfolio environment.

Business drivers for EPPM The PPM landscape is evolving rapidly as a result of the growing preference for managing multiple capital investment initiatives from a single, enterprise-wide system. This more centralized approach, and resulting 'single version of the truth' for project and project portfolio information, provides the transparency of performance needed by management to monitor progress versus the strategic plan. The key aims of EPPM can be summarized as follows:

… excerpt ends here. Continue reading the full article.

Worked examples

Example 1 — a first encounter with Project portfolio management

Start with the simplest possible case. Write down what Project portfolio management claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Project portfolio management before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Project portfolio management ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Project portfolio management

In research: Project portfolio management appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Project portfolio management in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Project portfolio management is common in secondary-school and first-year university syllabi. It links to neighbouring topics Brand management, Corporate development, Information technology management, so understanding it makes those chapters shorter.
In everyday life: Look for Project portfolio management outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

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How to study Project portfolio management in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Project portfolio management means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Project portfolio management out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Project portfolio management in simple terms?

Why does Project portfolio management matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Project portfolio management?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Project portfolio management.