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What Is Project Portfolio Management?

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28th Mar, 2023
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What Is Project Portfolio Management?

Companies today need someone who comes with the skill of project portfolio management. Therefore, it is important to develop a project mindset and develop a product through different techniques and elements of project management. 

Project Portfolio Management


It is vital for all the companies out there to manage their project portfolio. The entire activity helps the company categorise the portfolio into different groups and then try to align them with the common and overarching goals of the company. 

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The article sheds some light on what project portfolio management is and what are its advantages of the same. 

What is Project Portfolio Management (PPM)?

Project portfolio management, also known as PPM, is a very important concept for companies operating in an agile environment. It refers to the overall management of a company’s projects at any time. While these projects might serve different purposes, they all come under the company’s portfolio and use the same resources. 

With PPM project management, the company manages all the projects together, and it also decides the allocation of the resources to each project depending on the need of the hour. Apart from allocating resources, managing of project portfolio also includes identifying opportunities that can be translated into projects and then assigning project managers who will act as custodians of their projects. 

Why is Project Portfolio Management Important?

With portfolio management, the company implements all the strategies created on paper. The main objective of PPM is to ensure that the company takes up the right projects at the right time and maximises the returns of the company. Today, companies have multiple projects running parallelly. However, the resources are limited. 

With PPM, companies try to evaluate all the projects and then decide on the ones that need their maximum attention. 

Factors Affecting Project Portfolio Management

Project portfolio management comes with its own set of objectives that the company aims to meet to ensure that all the projects are executed well. To meet these objectives, there are certain factors that you should consider before you begin with the PPM project management process:

  • The project document: It is important to create a document that outlines all the information related to different projects running in the company. The document should highlight the project’s name, objective, and timeframe.
  • Evaluation: Every project needs to be evaluated regularly to ensure it meets the required targets and is going as expected. 
  • Team creation: The project team manages all the projects end-to-end. Therefore, creating a team that will tirelessly work to achieve all the project objectives is important. 

What Types of Industries Should Invest in Project Portfolio Management?

Project portfolio management has found its utility across sectors. According to research, around 71% of companies have a PPM system. With the increasing number of projects a company handles, they seek people proficient in PPM. 

Let’s have a look at some of the industries where PPM is of great use:


Information technology is one such sector where project portfolio management is essential. Companies in the IT sector generally have small teams, but the individuals who are a part of the team are highly contributing individuals. In these companies, project portfolio management involves forecasting the demand and updating the skill inventory accordingly.

Project managers use data-driven forecasting to select people for the right projects. Also, they help understand the burden a team member can take, and then they divide the responsibilities accordingly. 


Construction is one such industry where different projects operate parallelly, and the tenure of all these projects is quite long. By the time a construction project ends, a lot of things change. 

Some of the major challenges that construction companies face daily include the increasing prices of raw materials, employee turnover, and a change in the company’s important stakeholders. Hence, with project portfolio management, the company can move past these changes and stay in line with the overall objectives of the projects. 

Financial Services

While companies in the financial services sector only have a few major projects, they have several mini-projects running simultaneously. Also, this is one sector where accuracy beats all the other elements of the business. 

Hence, with PPM, companies can stay on par with the industry and keep up with their performance metrics. With PPM, they are abreast with all the changing trends, which helps them stay ahead of their timelines and complete the projects more efficiently. 


Marketing teams, too, have multiple projects running at the same time. However, unlike the construction sector, marketing projects differ greatly, so they have different requirements. 

For instance, one project might involve deliverables related to billboard advertising, while the other might be related to the launch of a new product. With PPM, marketing teams can prioritise the projects that contribute more to the company’s overall goals. 

With PPM, companies can standardise the workflow of both small and large projects. Also, a project manager becomes equipped to forecast the demand for a particular project. 

Why Should PM Work on PPM?

The primary KPI of a project manager is project portfolio management. With PPM, project managers can analyse the progress of the projects and can work on any bottlenecks that might be hampering the projects. 

There are several cases where a project gets halted due to a lack of planning. These projects are sometimes withdrawn as they no longer remain strategically important to the company. Project managers are primarily responsible for ensuring adequate resources for business initiatives. 

If a project manager applies PPM, the project will be finished on schedule and delivered without sacrificing quality. Also, it is a project manager’s job to understand which initiatives are more important to the company so that they can start working on them. 

Advantages of Project Portfolio Management

A company achieves several benefits by implementing project portfolio management. Some of these benefits are highlighted below:

Brings the projects in line with the objectives of the company

Several surveys suggest that most projects fail because the project in question loses track and fails to meet the company’s objectives. With project portfolio management, companies bring teams to a single table where the future of a project can be discussed. Hence, the company’s goals align with the project’s objectives. 

Focus on the goals of the company

Several individuals work on a single project. Hence, there are high chances of personal biases in the decision-making process. The subjectivity element of projects is taken care of by PPM as it focuses on the goals of the company during the prioritisation of the projects. Instead of intuition, PPM uses different statistical models to rank the projects based on different factors and then make a choice. 

Focus on the goals of the company - PPM


Easy Decision-Making

As several projects are running within the company simultaneously, companies might struggle to allocate resources to projects as a company has limited resources. With PPM, companies can evaluate different projects and decide which ones should be prioritised from the lot. The entire process has made decision-making easy. 

Brings in Governance 

Governance is a very important aspect of projects, but most projects fail to incorporate the same. With the help of project portfolio management, project managers can incorporate governance into different projects. Project managers can develop a backup plan, use data-driven methods, and guide the business properly.

Steps for PPM

There are five important steps to implementing project portfolio management. These steps are discussed below in detail:

  • Step 1: First, try to understand the objectives of the company and how the direction they want their business to progress in. 
  • Step 2: Conduct thorough research before deciding on the project’s inception. Formalise the entire process of addressing and translating the ideas into a project. 
  • Step 3: After analysing the resources’ cost, duration and availability, you must choose the projects in the company’s best interests.
  • Step 4: Check the feasibility and launch the project once all the stakeholders are on board. 
  • Step 5: Once the project is launched, PPM helps manage the project and take measures if things are not going as planned.

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Important Tools

Different tools can contribute to project portfolio management. Some of these widely used tools include the following:

  • Decision tree analysis: Decision tree analysis is one of the most popular ways to analyse projects. It comes into the picture when a particular situation is affected by several subjective factors. The model evaluates different ways of solving the same problem. 
  • Cost-benefit analysis: The cost-benefit analysis refers to a method where a project’s risk and reward aspects are analysed before a particular project is selected. 
  • Objectives matrix: This tool helps break down the business’s objectives into smaller ones. Post the division, small projects are created to meet the smaller company objectives. 
  • Scoring model: This is one of the most widely used tools in project portfolio management. It helps the project managers balance the qualitative and quantitative factors, after which several weights are allotted to these factors. The best projects are selected based on the total score. 

Top Management Skills to Learn


PPM, or project portfolio management, has become very important given companies run several projects parallelly. Therefore, project managers must upskill themselves to effectively carry out the project portfolio management process. 

upGrad’s Post Graduate Certificate in Product Management can be an excellent choice to get started! Co-anchored by Duke Corporate Education, the course will help you develop a product mindset and help you prioritise the projects that contribute more to the organisation. 

The program is ranked second among all executive education programs and is ideal for people working in the project management space. You can also take up the course if you want to enter the world of project management. 

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He is working as Associate Director of Digital Marketing at upGrad. Apart from marketing he is a crazy and courageous traveler. He has traveled from Kashmir to Kanyakumari through his bike(bullet).

Frequently Asked Questions (FAQs)

1What are the five questions that are a part of the five-question model of PPM?

The five questions in the five-question model are: Are we investing in the right things? Are we optimising our capacity? Are we realising the promised benefits? Can we absorb all the changes, and how well are we executing?

2What are some important features of the tools used in project portfolio management?

The different features used in project portfolio management are resource planning and understanding the cost benefits. Tracking important metrics and ensuring no deviation from the plan are other features of the tools used in project portfolio management.

3What are some of the techniques that are used in PPM

Some techniques widely used to measure PPM are the Heuristic model, scoring techniques and visual or mapping techniques.