Effective Project Management: Traditional, Agile, Extreme, Sixth Edition

Defining a Portfolio

A simple definition of a project portfolio is that it is a collection of projects that share some common link to one another. The operative phrase in this definition is “share some common link to one another.” That link could take many forms. At the enterprise level, the link might be nothing more than the fact that all the projects belong to the same company. While that will always be true, it is not too likely the kind of link you are looking for. It is too general to be of any management use. Some more useful and specific common links might be any one of the following:

• The projects may all originate from the same business unit — for example, information technology.
• The projects may all be new product development projects.
• The projects may all be research and development projects.
• The projects may all be infrastructure maintenance projects from the same business unit.
• The projects may all be process improvement projects from the same business unit.
• The projects may all be staffed from the same human resource pool.
• The projects may request financial support from the same budget.

Each portfolio will have an allocation of resources (time, dollars, and staff) to accomplish whatever projects are approved for that portfolio. Larger allocations usually reflect the higher importance of the portfolio and stronger alignment to the strategic plan. One thing is almost certain: whatever resources you have available for the projects aligned to the portfolio, the resources ...