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Beginner’s Guide To Project Portfolio Management—Critical Steps, Tools, Benefits

Project portfolio management (PPM) describes how we manage the often-confusing mix of interrelated, dependent, and connected projects. PPM considers the big picture of all projects grouped together—past, present, and future—and calculates the optimal prioritization and sequencing of projects to maximize ROI.

In this post, we’ll cover everything you need to know to get started with PPM, the best tools, and how to successfully implement PPM to achieve maximum returns from projects.

In this article

10 Of The Best Project Portfolio Management (PPM) Tools

Here’s some of the best project portfolio manager tools on the market:

  1. 1. Wrike — Best for live tracking of team workloads and capacity
  2. 2. — Best PPM tool for customizable workflows
  3. 3. Smartsheet — Best PPM tool for reporting capabilities
  4. 4. Kantata — Best portfolio dashboards for professional services teams with 30+ members.
  5. 5. Sciforma — Best PPM tool for product development and IT teams
  6. 6. Bubble PPM — Best for portfolio, project, and resource management in one platform
  7. 7. Forecast — Best visual AI capabilities to predict resources and profitability
  8. 8. Accelo — Best PPM tool for automations
  9. 9. Hive — Fast-moving PPM platform used by big companies like Starbucks and Google
  10. 10. Planview Clarizen — Best enterprise work and portfolio project management software

What Is Project Portfolio Management (PPM)?

Project portfolio management refers to the centralized management of one or more project portfolios to achieve strategic objectives. It is a way to bridge the gap between strategy and implementation and ensures that an organization can leverage its project selection and execution successfully. Here are some of the use cases of PPM:

  • PPM is generally used by organizations to identify the potential returns on a project. It makes it possible for companies that want to invest in new projects (and often competing projects) to forecast risks inherent in each and make an informed decision during project planning.
  • It also facilitates best practices in team communication and ensures that all parties involved in projects are on the same page.
  • When done properly, PPM is a valuable tool to obtain buy-in from all stakeholders in an organization and enable them to see the bigger picture. If they can understand, manage, and mitigate risks, it will minimize discord, which can often be the bane of successful project and work management. PPM also enhances transparency, governance, and accountability with stakeholders.

What Are The Objectives Of Portfolio Management?

The primary objective of PPM is to maximize the benefits a company accrues from the projects it undertakes. This necessarily involves selecting only those projects that offer the right amount of value. Also, ensuring desirable project performance, considering the resources that need to be allocated vis-a-vis the available resources, and the strategic fit with the company’s goals.

Other objectives include achieving balance in the project portfolio by ensuring an appropriate mix of high and low-risk and long and short-term projects. By establishing an optimal mix of projects, PPM ensures a company is better placed to achieve its strategic objective and its operational and financial goals.

What Is The Role Of The Project Portfolio Manager?

As the person with oversight of an organization’s project portfolio, the portfolio project manager is integral to the successful execution of the organization's strategic objectives. Often, the role of a project portfolio manager revolves around managing one or more portfolios and working with different financial algorithms and financial models. These models align projects to the company’s strategic objectives and keep risk management in mind. Portfolio Managers often develop management standards to guide the portfolio and keep a high-level overview of everything within the portfolio.

Often, project portfolio managers are part of a Project Management Office (PMO). The PMO’s role involves portfolio management and setting project management processes and standards for the whole department to follow.

Additionally, the PMO can set out which methodologies are used in the organization, such as Agile or Scrum methodologies, and ensure that they are followed in each individual project.

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What Is The Difference Between Project Management And Portfolio Management?

Project and portfolio management do require some of the same general skills, but despite their similar-sounding names, project management and portfolio management are quite different.

Project management, as you know, is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements. Its importance cannot be over-emphasized.

However, the operative word in project portfolio management, on the other hand, is a portfolio.  PPM is not primarily concerned with running projects. Instead, it focuses on choosing which projects to be involved in and how to fund them. Those decisions are based on whether or not they support the goals and objectives of the company. Finally, projects that do not fall within the scope of the company’s objectives are removed from contention.

If you were managing a technology company’s portfolio, for example, you would most likely reject a proposed building project because it doesn’t align with the company’s stated strategy of focusing only on some predefined type of tech projects.

Learn more about the differences between these two here.

What Is The Difference Between A Program And A Portfolio?

A program is composed of a set of related projects. For example, a program led by a nonprofit to provide clean drinking water in a rural area might comprise an infrastructure project, a research project, and an education or PR project.

Put simply; a program is often the driving and managerial force behind a set of projects. Not every project needs to be part of a program, but if it is, we consider the success of a project at a program level—did it help achieve the overall program goals?

A portfolio concerns the organizational strategy and how it affects the business itself. Think capacity planning, resource allocation, resource planning, and project planning. Meanwhile, goals set at the portfolio level will give shape to different projects, programs, and operational activities.

Of course, the interpretation of these titles depends on the organization. For example, there’s program portfolio management, which assesses programs from a portfolio level.

What Does Information Technology Portfolio Management Look Like?

This is a common question, so here’s an example of what portfolio management looks like in IT. An IT portfolio manager will generally look at three main things:

  1. Processes
  2. People
  3. Technology

The purpose of IT portfolio management is to ensure that the individual IT investments embedded in the organization’s processes, people, and technology are on track. Therefore, bridging the gap between the organization’s overall strategy and the execution of that strategy.

An IT portfolio manager examines the financial portfolio, determines potential returns of different IT investments, determines a project’s fit with strategic objectives, and assesses risk on a portfolio level.

IT portfolio management and project portfolio management in IT are similar. However, in some cases, IT portfolio management will step beyond projects and initiatives to also examine the applications and infrastructure related to those projects.

In a large organization, IT or software portfolio management will draw not only from technology portfolios themselves but also from related disciplines. These may include enterprise project portfolio architecture, business case analysis, program management, and performance management. Even so, IT portfolio managers will still follow the same types of portfolio management processes listed above.

Project Portfolio Management Software - PPM Tools

Project Portfolio Management Software

Choosing the right project portfolio management software and tools is often the key to successful PPM. Depending on your needs, our list of the best project portfolio management software or enterprise PPM software will help you find the best one for your situation and number of projects you have.

Before diving into PPM software or project portfolio management tools, check out the demos and free trials offered by many portfolio tracking software providers. And if you realize you don’t need a PPM tool but just a PM tool, you’ll find there are simpler project management tools that let you do many things like manage tasks and teams across multiple projects.

Need expert help selecting the right Project Portfolio Management Software?

We’ve joined up with to give all our readers (yes, you!) access to Crozdesk’s software advisors. Just use the form below to share your needs, and they will contact you at no cost or commitment. You will then be matched and connected to a shortlist of vendors that best fit your company, and you can access exclusive software discounts!


The Project Portfolio Management Process

A strategic portfolio management system requires a portfolio management process. This usually involves a step-by-step process that includes:

Listen to our podcast episode on optimizing project portfolio management here.

1. Create An Inventory And Establish A Strategy

First, identify all the projects in the pipeline, including potential projects, by gathering key project and organizational information. Then, categorize these, consider where projects are in their lifecycle, identify your company’s strategic goals and business objectives. Finally, determine if these projects support those strategic objectives, and if so, which ones.

Business strategies are the basis of project portfolio management. As such, it is important to have a strategy in mind before proceeding. Preparing answers to common questions you expect to get during this phase is also advisable.

Common questions can be anything from “What is project portfolio management?” to “How much will this cost the company?” to “How will this benefit us?” and even “Why do we need project portfolio management?”. It’s always good to be prepared. Therefore, establish a process for prioritizing projects.

After you’ve set a strategy, you need to build an implementation team. Your implementation team should include technical team members (to help with new systems) and portfolio managers, to name a few. In addition, your implementation team may need a governing body, which is typically made up of senior management.

2. Analyze

Next, analyze the current strengths and weaknesses of your project portfolio. Evaluate each project individually – project milestones, potential ROI, reporting schedule, and resource allocation.

After collecting data, it’s generally a good idea to organize it by category. These categories can be anything you think is necessary but generally include completed and canceled projects and growth and survival categories.

In conducting this analysis, you should ask questions that aim to reveal whether there is duplication or whether some existing projects might not be better combined for the sake of efficiency or even halted completely.

You should also assess the overall risk of the project portfolio as a whole. You can do this by comparing the probability of technical success against the anticipated benefit from the project. Remember to have a good communication process in place so that all the key variables are thoroughly discussed.

3. Ensure Alignment

Next, perform an alignment analysis that will show you whether your critical resources are working on critical projects and whether the projects you do decide to carry on with really align with all the strategic initiatives the company wants to undertake. Some of your guiding principles should include:

  • The degree of the strategic fit between the portfolio and the company. You need a balance between near-term growth opportunities, long-term goals, and the quest for long-term innovation.
  • Ensuring the distribution of projects, including the number and nature of the projects, are aligned to different strategic goals in a way that makes economic sense.
  • The probability that the end product will deliver the return expected.
  • An evaluation of associated risks. It is important to take a broadly inclusive approach to risk and not only measure in financial terms but include schedule, scope, resources, and technology risks.

4. Management

Next comes the management aspect of the process. At this point, you need to view the project portfolio and make necessary decisions about the reallocation of budgets and resources or reprioritize based on the information you uncovered during the previous legs of the process. Processes to consider during this phase include resource management, risk management, and change management.

You may also need to reschedule projects which you may have decided to keep. However, ensure the rescheduling risk aligns with your strategy. Above all, collaboration is critical before making these decisions to make sure you end up with the right portfolio.

In the end, your portfolio should have a healthy mixture of risk and reward and should meet internal requirements.

5. Test And Adapt

Lastly, test and adapt. There is no guarantee you will immediately get your PPM process right, and in fact, you shouldn’t expect to. You will need to adapt and make changes in real-time. What adaptation means is quite different for every company, as it should be, but it’s generally a good idea to test your new portfolio with a few stakeholders, taking feedback as needed.

PPM can be quite a complex process, especially in the beginning. There are project portfolio management templates and portfolio and project management software that can help.

Tips To Achieve Project Portfolio Management Success

Once your portfolio has been rolled out, it can be difficult to see where to go from there. Here are a few tips for achieving success:

  • Prioritize the accurate identification of risks and associated remediation strategies.
  • Don’t be afraid to cancel projects if they no longer align with company strategy.
  • Enable architects, IT planning teams, and C-suite to align execution with business strategy
  • Simplify time and task management for project team members, ensuring they have the freedom and flexibility to capture task and time data as necessary.
  • Prioritize data accuracy and access to data. A delay in getting data can impinge on your decision-making ability, as well as your ability to comply with regulatory requirements.
  • Use the right tools to keep on track and simplify the process. For example, if you give your project team the ability to submit timesheets remotely or allow stakeholders to keep track of project status, it can save you a lot of time.
  • Don’t micromanage.

Benefits Of Project Portfolio Management

Project portfolio management has many benefits, which include:

  • an increase in project delivery success
  • better decision making
  • the ability to prioritize high-value projects
  • decreased probability of overspending
  • managing change more effectively
  • removing inefficiencies

Regardless of how high value and successful a project may be, it could still fall victim to overspending. Again, PPM helps a company to avoid this; it allows managers to nip overspending in the bud as it is easy to see where resources are being over-allocated.

PPM can also be a vital tool in organizational change management; with an effective PPM strategy, a company can restructure and improve its methods for project execution as part of a larger process to change its operational or strategic direction.

In the process, it will remove inefficiencies and be better able to focus on appropriate strategies for achieving goals. Lastly, PPM also makes a company more nimble and able to adapt to change with minimum fuss or disruption.

I have attempted to give you a concise breakdown of what, in reality, can be a complex process. An efficient and effective PPM process isn’t going to happen overnight, but with the right tools and internal commitment to the process, it will happen. In the end, what is required to be successful at PPM is commitment and adaptability.

A Real Life Example: Why PPM Is Important

You know the score—your agency has got 50 projects on the go. They’re all overlapping, some of them for the same client, and all are using the same resources. Some of them you’re doing to keep the lights on, others for the prospect of awards, and others just for pure innovation. But as an Agency Owner, Program Manager, or Project Director, how do you know if you’re focusing your teams and their projects on the right things? We’re all asking the same questions:

  • Is this really a good idea?
  • What should we really be doing?
  • What projects should we be prioritizing right now?
  • How can we focus our resources most efficiently?
  • How can we run these projects concurrently and profitably?

These are the questions that project portfolio management (PPM) enables us to answer. With many competing projects and priorities stretching resources in different directions, good PPM is the only thing standing between us and bad project decisions that offer nothing but a poor return on investment.

What Do You Think?

Let me know your thoughts in the comments section. I’d love to hear from you.

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Related Read: How To Use A Project Management Portfolio To Nab A New Job

By Ben Aston

I’m Ben Aston, a digital project manager and founder of I've been in the industry for more than 20 years working in the UK at London’s top digital agencies including Dare, Wunderman, Lowe and DDB. I’ve delivered everything from film to CMS', games to advertising and eCRM to eCommerce sites. I’ve been fortunate enough to work across a wide range of great clients; automotive brands including Land Rover, Volkswagen and Honda; Utility brands including BT, British Gas and Exxon, FMCG brands such as Unilever, and consumer electronics brands including Sony. Ben's a Certified Scrum Master, PRINCE2 Practitioner and productivity nut.

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  • Great beginner's guide for PPM.


  • Very clear and useful ! I am about to take a new job as PPM and this article deeply increases my current knowledge. Many thanks ....chuuuuuuuuu


  • Yep, loved the article. Considering the date it was authored it stands the test of time pretty well I'd say. A question I had though: Is software (Hansoft, Clarizen, 10,000ft, etc.) really needed for effective PPM or does it just make it easier?


  • Great article, I’ve started a job recently as a PM, but its turned very much into a PPM role, and this is a great piece to help me consider where to focus and upskill.


  • Very helpful article for beginners!


  • Very clear and useful ! I am about to take a new job as PPM and this article deeply increases my current knowledge. Many thanks Cédric