Portfolio
A collection of projects and programs managed to achieve strategic objectives.
Detailed Explanation
A portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives. Unlike programs (where components are related), portfolio components may not be interdependent or directly related — they are grouped for governance and strategic alignment.
Portfolio management focuses on doing the right projects rather than doing projects right. It involves selecting, prioritizing, and balancing investments to maximize organizational value. Key activities include portfolio alignment with strategy, resource capacity planning, benefit realization tracking, and portfolio balancing.
The portfolio manager uses tools like scoring models, NPV analysis, and strategic alignment matrices to select and prioritize projects. Poor portfolio management leads to resource conflicts, strategic misalignment, and organizations running too many projects simultaneously, diluting focus and effectiveness.
Key Points
- Collection of projects, programs, and operations for strategic goals
- Components may not be interdependent — grouped for governance
- Focuses on doing the right projects, not just doing projects right
- Key activities: selection, prioritization, balancing, alignment
- Uses NPV, scoring models, and strategic alignment for decisions
- Prevents resource conflicts and strategic misalignment
Practical Example
A technology company's portfolio contains: 3 new product development projects, 2 infrastructure upgrade programs, 5 customer-specific delivery projects, and ongoing operations. The portfolio board reviews quarterly, approving 2 new projects while deferring 3 proposals that do not align with the strategy. They reallocate resources from a low-priority project to accelerate a high-NPV initiative.
Tips for Learning and Applying
Align every project in the portfolio to specific strategic objectives
Review and rebalance the portfolio quarterly, not just annually
Be willing to kill projects that no longer align with strategy
Manage portfolio resource capacity — not just individual project resources
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