Organizations have business goals to achieve. These business goals are achieved through execution of carefully selected projects, programs and other work which are in true alignment to the organizations strategy to achieve their business goals. There are three stages to project portfolio management;
- Selection of the right projects, programs and other work, which has the best fitment to the organizations strategy for growth.
- Execution of these projects and maintaining their alignment to the organizational strategy throughout execution.
- Measurement of the actual benefits derived from these and comparing them with the forecasts made while choosing these.
All these steps collectively is known as project portfolio management. Portfolios are managed by portfolio managers. The managers of the programs, projects and other work of the portfolio report to the portfolio manager.
Portfolio can exist at the organization level, division level and unit level. Portfolio management is always associated with the achievement of strategic business goals.