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An effective Project Portfolio Management (RM) capability aims to:

• Focus organizational resources to deliver the organization's strategic objectives.
• Simplify and rationalize the steps and incremental progressions towards strategic objectives to improve success rates.
• Gain support by making visible the strategic contribution of each step and incremental progression towards the organization's strategic objectives.
• Reprioritize the portfolio based on strategy change — for example, mergers, acquisitions, and business environment changes.
• Improve confidence that all programmes in the portfolio remain aligned with the organization's overall strategy and business objectives.
• Support strategic organizational changes particularly those that involve cultural or behavioural changes.
• Provide insight into financial, people, and technical resource requirements for the execution of the project portfolio.
• Keep stakeholders informed and appraised of the portfolio's status.
• Maintain stakeholder support by soliciting timely feedback for any proposed changes to the portfolio.
• Monitor ongoing risks, progress deviations, and other factors that might impact upon the portfolio's success.
• Improve consistency in the evaluation of the portfolio's status (e.g. have all portfolio sub-components use the same status reporting period) to aid understanding and facilitate decision-making.
• Support timely delivery of programmes within the portfolio through effective monitoring of resource allocation and use.
• Identify and realize synergistic value opportunities across related programmes.
• Improve consistency and transparency in programme and project selection, based on agreed evaluation and prioritization criteria to gain consensus and support for the prioritized execution of the portfolio.
• Prioritize the execution of project portfolio components that have greater value potential in alignment with the organization's strategic direction to maximize early benefits realization.

The Project Portfolio Management (PPM) capability is the ability to select, approve and balance project portfolio components (projects, programmes, or sub-portfolios) to deliver the organization's strategic objectives and its operational needs. Managing the project portfolio will prioritize, monitor, track, analyse, report, and as necessary, terminate project portfolio components that plan to, or that currently consume organizational resources.

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

2Basic

• Practice

  Map project portfolio components' contributions to strategic objectives.

  Outcome

  The strategic contributions of project portfolio components (including ranking and rating processes) are visible to all stakeholders.

  Metric

  Number and percentage of project portfolio components mapped to strategic objectives.

• Practice

  Develop processes to identify portfolio risks associated with project portfolio components.

  Outcome

  Portfolio risk identification brings insights into potential issues, and enables any risk events that occur to be proactively managed and appropriately handled.

  Metric

  Number of risks per component and percentage of component risks considered to be effectively managed.

• Practice

  Develop processes and procedures to communicate project portfolio component issues to portfolio management.

  Outcome

  Portfolio managers, programme managers and project managers understand the levels of issues they should manage, and communications on these are prompt and appropriate.

  Metrics

  • Number of appropriate escalations versus number returned as inappropriate.
  • Number of escalations communicated effectively.

3Intermediate

• Practice

  Train staff to select, rank, rate, and prioritize project portfolio components based on strategic contributions.

  Outcomes

  • Ranking and rating processes are transparent and understood by all stakeholders.
  • Stakeholders agree to and execute the proposed prioritizations.

  Metric

  Number and ratios of staff trained and staff untrained.

• Practice

  Use a rigorous portfolio component risk identification and analysis approach that encompasses organizational risk, performance risk, resource and staff risk, financial risk, market risk, technology risk, regulatory risk, and public relations risk.

  Outcome

  Effective risk identification and analysis are in place and rigorously applied.

  Metric

  Number of non-identified risk events occurring.

• Practice

  Communicate using the communications plan.

  Outcome

  The communications received by staff are appropriate in any given set of circumstances.

  Metric

  Number and percentage of planned and unplanned communications.

4Advanced

• Practice

  Develop a ‘what-if’ scenario analysis capability to understand portfolio impact of changes and risk events.

  Outcome

  Potential changes and their impacts are analysed to facilitate informed decision-making.

  Metric

  Number and percentage of decisions facilitated with ‘what-if’ analysis reports.

• Practice

  Recognize and reward stepping-stone projects or projects that deliver progressions towards strategic objectives.

  Outcome

  Staff members are motivated based on the activities they carry out rather than on longer-term strategic objectives.

  Metric

  Staff surveys and morale measurements across the portfolio staff.

• Practice

  Automate the detection of control limit violations to assist in early detection and reporting of issues.

  Outcome

  Any breaches of controls by project portfolio components are detected earlier and reported directly to all appropriate levels.

  Metric

  Number and percentage of controls violating project portfolio component variances.

5Optimized

• Practice

  Leverage the latest tools and their advanced features to optimize execution.

  Outcome

  Most of the mundane repetitive tasks are automated and the possibility of human error in calculations is reduced or eliminated.

  Metric

  Number of project errors and variances of those metrics.

• Practice

  Work closely with strategic planning to maintain alignment and prioritized focus.

  Outcome

  Portfolio management is an integrated part of the company's strategic objectives-setting function and plays a significant part in the delivery of those objectives.

  Metric

  Percentage of the portfolio budget assigned to specific strategic objectives.

• Practice

  Develop project oversight and monitoring capabilities to detect problems and potential problems across many projects, allowing a proactive set of supports to be in place — e.g. earned value, S-curve analysis, etc.

  Outcome

  Project oversight is an efficient and effective activity that can detect and report on the issues that require attention.

  Metric

  Project control variance exceptions detected at project portfolio level versus project management level detections.

This capability was introduced in Revision 18.01 as a merger of Portfolio Management (16) and Portfolio Planning and Prioritization (16).

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

BARBenefits Assessment and Realization

Managing how organizational changes are implemented to achieve business benefits.

BPBusiness Planning

Establishing the business plan for operational activities.

PGMProgramme Management

Defining the scope, investment criteria or detailed objectives for specific programmes.

PGMProgramme Management

Establishing governance criteria for programmes.

PGMProgramme Management

Forecasting schedule, budget, or resource needs of programmes.

PMProject Management

Defining the scope, investment criteria or detailed objectives for specific projects.

PMProject Management

Establishing project governance criteria and documenting these in the project charter or the project initiation document.

PMProject Management

Forecasting schedule, budget, or resource needs of projects.

SPStrategic Planning

Establishing the organization's strategic objectives.