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The Portfolio Planning and Prioritization (PPP) capability aims to establish the investment portfolio composition for technology-related programmes and projects.

• Increase the likelihood that organizational resources are applied in accordance with the organization's strategy.
• Improve consistency and transparency in programme and project selection, based on agreed evaluation and prioritization criteria.
• Prioritize technology-related programmes and projects that have the greatest potential for value delivery in alignment with the organization's strategic direction, while managing potential downsides.
• Dynamically reprioritize the portfolio based on strategy change — for example, mergers, acquisitions, and business environment changes.
• Provide insight into financial, people, and technical resource requirements for execution of the IT investment portfolio.
• Improve the perception of IT as a catalyst or enabler of the business, by delivering positive returns on the IT investment portfolio.

The Portfolio Planning and Prioritization (PPP) capability helps ensure that the investment portfolio of technology-related programmes and projects is aligned to and optimized for the organization's strategic direction.

Where multiple programmes and projects compete for a limited investment fund, portfolio selection and prioritization is a critical factor in establishing and maintaining organizational competitiveness. The number of IT programmes and projects seeking investment will typically exceed the number that can be funded and executed, owing to limited resources and capacity. Organizations thus have to systematically prioritize those IT programmes and projects that have the best potential benefit for the organization as a whole, and avoid selection based on bias. Further, with the acceleration of business change, the selected portfolio needs to be managed dynamically and reprioritized whenever necessary, to ensure ongoing alignment with the organization's strategic direction. However, many IT functions over-promise and under-deliver on their IT investment portfolios, with frequent reports of IT project failures. An effective approach to prioritizing and planning the portfolio is required, to ensure that a balanced investment portfolio is chosen that can deliver optimal value to the business.

By developing an effective Portfolio Planning and Prioritization (PPP) capability, an organization can create a synchronized and balanced portfolio that supports the organization's pursuit of its strategic goals and objectives¹. The priority attached to each programme and project should guide the financial, people, and technical resource allocations¹, thus minimizing the likelihood of resourcing issues during the execution phase. Achieving consensus among key stakeholders using a transparent approach to portfolio selection minimizes the influence of organizational politics, and increases the likelihood of making organizational investments that deliver positive returns.

The Portfolio Planning and Prioritization (PPP) capability is the ability to select, prioritize, approve, and terminate programmes and projects that are seeking organizational resources. The Portfolio Planning and Prioritization (PPP) capability covers:

• Establishing a framework for selecting and prioritizing programmes and projects.
• Involving key personnel in selecting programmes and projects.
• Assessing and prioritizing programmes and projects based on their alignment with business objectives and operational needs.
• Approving and terminating programmes and projects.
• Maintaining oversight of financial, people, and technical resources for portfolio resource planning purposes.

Representative POMs are described for PPP at each level of maturity.

2Basic

• Practice

  Define a basic portfolio prioritization framework for the IT function that reflects a limited number of key criteria (such as fundamental acquisition costs).

  Outcome

  A transparent ranking methodology is available.

  Metrics

  • Yes/No indicator regarding the existence of a portfolio prioritization framework.
  • Number of framework criteria defined.

• Practice

  Encourage functional managers to directly prioritize and approve new programmes and projects for their individual portfolios.

  Outcome

  Visibility into investments is emerging, with potential to identify and escalate local conflicts.

  Metric

  icPercentage of programmes and projects that are approved by functional managers.

3Intermediate

• Practice

  Establish a central committee (for example, a Portfolio Investment Board) with representatives from the IT function and some other business units, to maintain oversight of the portfolio.

  Outcome

  Programmes and projects approved by the central committee are more likely to be aligned with the organization's strategic direction.

  Metric

  Percentage of programmes and projects that are approved by a central committee.

• Practice

  Expand the portfolio prioritization framework to incorporate several criteria (such as risk, value, resource availability, and technology mix).

  Outcome

  A clear and consistent ranking of key programmes and projects is available within the IT function and some other business units.

  Metric

  Number of framework criteria defined.

• Practice

  Run the portfolio planning activity annually, using a dedicated team.

  Outcome

  The success rate for programmes and projects in the portfolio improves, and interconnections between most projects can be proactively planned.

  Metrics

  • Frequency of portfolio planning activities.
  • Assignment of IT and business unit employees with dedicated responsibility for portfolio planning.

• Practices

  • Consider the financial, people, and technical resources needed to implement the prioritized programmes and projects.
  • Replan the portfolio if required, according to resource availability.

  Outcome

  Prioritized programmes and projects in the portfolio are less likely to be impacted by resource constraints.

  Metric

  Percentage of prioritized programmes and projects that have resource allocation issues.

4Advanced

• Practice

  Recognize a central committee, comprising senior management representatives from across the whole organization, as the sole authority for selecting, prioritizing, approving, and terminating programmes and projects.

  Outcome

  Senior management representation on the central committee helps ensure that all programmes and projects are aligned with the organization's strategic direction.

  Metric

  Percentage of programmes and projects that are approved by a central committee (such as a central Portfolio Investment Board).

• Practice

  Adopt a formal approach to regularly assess and re-assess all programmes and projects organization-wide.

  Outcome

  Organization-wide programme and project assessments help ensure that the investment portfolio remains relevant to the organization's needs.

  Metrics

  • Percentage of programmes and projects that are evaluated against an agreed set of criteria.
  • Percentage of programmes and projects that are re-assessed.

• Practice

  Build value-oriented criteria (such as benefits, ROI, value at risk, and project interdependencies) into the portfolio prioritization framework, and regularly check that the framework is aligned with the organization's strategies.

  Outcomes

  • A clear, consistent, and transparent ranking approach is available.
  • The portfolio is better aligned with the organization's strategic direction, and the portfolio is revised in line with changing business requirements.

  Metrics

  • Percentage of programmes and projects that are prioritized using agreed criteria.
  • Number of reviews of alignment with the organization's strategies per planning cycle.

• Practice

  Fully integrate portfolio planning into the organization's overall planning activities.

  Outcomes

  • Portfolio planning is recognized as a key component of the organization's overall planning.
  • The success rates for all programmes and projects are improved.

  Metric

  Yes/No indicator regarding the integration of IT portfolio planning activities with the organization's general planning activities.

5Optimized

• Practice

  Regularly review the effectiveness of the cross-functional composition of the central committee, based on lessons learned from previous programme and project selection, prioritization, approval, and termination activities.

  Outcome

  Relevant management stakeholders are involved in all programme and project prioritizations, increasing their commitment to the prioritization outcomes.

  Metric

  Frequency of central committee staffing reviews.

• Practice

  Continually update the portfolio prioritization framework and approach, based on feedback and industry best-known practice.

  Outcome

  The portfolio prioritization framework is adjusted, based on lessons learned from previous prioritization cycles and industry best-known practice, to meet the organization's needs.

  Metric

  Frequency of framework reviews (and updates as appropriate).

• Practice

  Capture and consider input from the strategies of relevant business ecosystem partners for portfolio planning activities.

  Outcome

  The portfolio is regularly aligned with changing business requirements.

  Metric

  Number of key business partners providing input to portfolio planning.

• Practice

  Maintain clear and up-to-date visibility of all resource allocations and their utilization rates across the portfolio.

  Outcome

  The planning of resources required to implement the prioritized programmes and projects is optimized.

  Metrics

  • Percentage of programmes and projects that have resource allocation issues.
  • Percentage of programmes and projects completed successfully within resource forecasts.

This capability was introduced in Revision 16 as a new critical capability.

It was deprecated in Revision 18.01, being replaced by Project Portfolio Management (18.01).

The following CCs cover topics that are related to PPP in some way:

BARBenefits Assessment and Realization

Evaluating the performance of individual programmes and projects

BARBenefits Assessment and Realization

The business case for each proposed programme and project

CAMCapability Assessment Management

A roadmap of projects aimed at improvements within the IT function

CAMCapability Assessment Management

Creating a roadmap of projects targeting internal improvements within the IT function

CFPCapacity Forecasting and Planning

The current capacity plan and scenarios for future resources based on current and proposed programmes and projects

FFFunding and Financing

Determination of appropriate sources of funds for IT investment portfolio initiatives

ITGIT Leadership and Governance

The organization's decision-making policies to support portfolio prioritization

PMPortfolio Management

Reviewing the ongoing performance of the investment portfolio for technology-related programmes and projects.

PMPortfolio Management

Status reports and decisions to be taken on the current IT investment portfolio

PPMProgramme and Project Management

Methodologies for managing individual programmes and projects

SPStrategic Planning

The strategic vision and objectives to support programme and project prioritization

SRPService Provisioning

Managing the IT services portfolio