Describe how project portfolio management is used by IT departments?

What is Portfolio Management?

Portfolio management is the centralized management of one or more portfoliOS, and it includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work in order to obtain specific strategic business objectives of the organization. Just as a program is managed by a program manager, a portfolio is managed by a portfolio manager.

To understand the relationship between these 3 entities, projects, programs and portfoliOS we need to understand that:

• If an organization does not have any programs but has only individual projects, all these projects can be grouped into one or more portfoliOS.

• If an organization has programs and no individual project external to all programs, all these programs can be grouped into one or more portfoliOS.

• If an organization has some programs and some individual projects, all these programs and projects can be grouped into one or more portfoliOS.

Portfolio management focuses on making sure that programs and projects are prioritized for resources to serve the organization's strategy. In simpler terms, a portfolio manager worries about the success of the whole strategy put forth by the organization rather than the success of a single project (like what we do)

Therefore, investment decisions are usually made at the portfolio level. Program management focuses on achieving the benefits that would be aligned with the portfolio and hence with the strategic objectives of the organization. So, a portfolio is part of the interface between the programs and strategic business objectives of the organization for which the programs are run.