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November 02, 2022

Project portfolio management processes explained

Portfolio-level Management Project Management
Jerzy Żurawiecki Content Specialist @BigPicture

Selecting the right initiatives for the portfolio is invaluable to any organization. But how to make sure the choices actually benefit your business? Fortunately, you can use some portfolio management processes to make accurate decisions. This article will shed some light on these processes.

On top of that, you will learn how a PPM tool can help apply these processes in your everyday work. But first, let’s look at portfolio management with a broader lens.

Project Portfolio Management – the basics

Portfolio management ensures that organizations do the right work at the right time to achieve their goals. It contains projects and programs, even other portfolios.

The Project Management Institute offers a similar definition. PPM is a mechanism for allocating resources optimally toward an organization’s objectives, factoring in risk, desired returns, scarce resources and the inter-relationships between the investments.”

As you can see, reaching objectives plays a massive role in portfolio management. However, the goals need a strategy to tie them together cohesively. Ergo, we can say that the strategy drives the portfolio.

Portfolio management is a continuous process

Think of your project portfolio as a never-ending story. After some programs and projects end their journey, there is space for new ones. Therefore, the update of the initiatives should occur regularly to maximize available resources.

Continuous completion of projects and programs is not the only reason to update the portfolio regularly. There are other reasons, for instance:

  • Shifting market trends and conditions,
  • Changing demands of customers,
  • Technology opening new realms of possibilities.

These factors should entice businesses to review and adjust their strategy and goals. And the portfolio must accurately support these changes. Now it’s time to delve into the processes you can use to pick the right initiatives.

Portfolio Management Processes

Let’s start by explaining what portfolio management processes are. In layman’s terms, it’s a set of steps that supports the delivery of business objectives. Think of them as a roadmap to achieving the goals of the organization.

We can discern two process groups:

  • Alignment,
  • Monitoring and Controlling.

A chart with two groups of Project Portfolio Management processes Groups: Aligning Process Group and Monitoring and Controlling

Aligning Process Group


Firstly, the employees create a list of potential initiatives. Even at this early stage, keeping the goals in mind is essential. Therefore, make sure the staff knows what the strategic objectives are. That way, the pool of possibilities is valuable from the get-go.

Aside from the ideas, Identification includes adding detailed information about each initiative. It will be useful in the later stages of the Aligning Process Group.


Once the list of ideas is complete, it’s time to group them into categories based on the strategic plan. That’s the point of Categorization.

Naturally, each group needs its own set of rules. In Portfolio Management, assigning elements takes place based on the following criteria:

  • Reference to the goal,
  • Measurement on the same basis.

This step creates order in an otherwise chaotic list of ideas. The subsequent steps benefit from Categorization, too.


The division of initiatives is complete, which leads to the next step. In the Evaluation stage, the Portfolio Manager estimates the value of each component.

Information is gathered and summarised for each component of the portfolio. The information can be qualitative or quantitative, and comes from a variety of sources across the organization. The data collection is iterated several times, until reaching the required level of accuracy. Graphs, charts, documents, and recommendations are produced to support the selection process.

During the Evaluation stage, it’s wise to assess the groups separately. Each objective might consider different factors. As a result, juxtaposing unrelated components can produce unreliable values.


Based on the results of the Evaluation, the Portfolio Manager creates a shortlist of the most valuable elements. The value stems not only from the alignment with the goals but also from the availability of resources. The main aspects related to resources include:

  • Time,
  • People,
  • Budget,
  • Equipment.

Simply put, Selection considers whether the initiatives are possible from a practical standpoint.


Bear in mind, Selection is not the end of the road. The next step is ranking the initiatives. After all, some elements of the portfolio have higher priority than others.

Establishing the importance of the elements is impossible without the right determinants. In the case of portfolio management, consider these four pillars:

  • Strategic category – a type of objective the organization strives to achieve.
  • Investment time frame – whether it’s a short or long-term initiative.
  • Risk vs return profile – the ratio of risk to probable return.
  • Organizational focus – internal or external, e.g., customers or operations.

Taking these pillars into account will help you prioritize your initiatives better.

Portfolio Balancing

This step requires some finesse. Usually, the entire prioritized list may not be achievable in the desired timeframe. For instance, it might be due to budget constraints or human resource availability. Whatever the reason, that’s why balancing is one of the most essential project portfolio management processes.

Portfolio balancing is the process of organizing the prioritized components into a component mix that, when implemented, is best aligned with, and best supports the organization’s strategic plan.”

As such, the Portfolio Manager must make decisions regarding all organization departments. Hence, the name “balancing” is so appropriate in this context.


The last Alignment step is the bridge between planning and execution. After balancing the portfolio, it’s time to communicate the plans. Naturally, the people in charge of finances and project execution must be aware of the upcoming projects and programs.

Moreover, Authorization involves requesting the necessary funds and resources and allocating them. As soon as these areas are approved, the work can start.

As for the execution itself, it happens in programs and projects. The oversight of each component is in the hands of appropriate managers.

However, effective portfolio management entails frequent verification. Instead of benefits, projects and programs focus on deliverables. Consequently, Portfolio Managers must control whether the outputs enable the achievement of strategic objectives.

That leads us to the next group of portfolio management processes. One that deals directly with overseeing the completed work and its value.

Monitoring & Controlling Process Group

Portfolio Periodic Reporting & Review

The idea behind this process is simple. It involves around three areas:

  • Measuring the performance of initiatives,
  • Reporting,
  • Reviewing the findings.

While the plans might assume that certain portfolio elements will deliver certain benefits, it might not always be the case. Thus, portfolio managers must measure the effectiveness of the elements in the context of the outlined benefits.

Simply gathering enough data isn’t enough, though, which is where reporting and reviewing come in. The former means documenting the data and presenting it to the relevant stakeholders. As for the review, it focuses on data analysis and drawing conclusions.

Strategic Change

The last of the portfolio management processes refers to actions based on the previous step. Just like the market goes through changes, so should the strategy. The portfolio needs to accommodate any changes to the objectives to deliver value to the business.

PMI states, A change in strategic direction impacts component categorization, which requires the portfolio to be rebalanced.Therefore, you can think of the entire portfolio management process as a cycle. When the strategy and objectives are updated, all the previous steps should reflect these changes.

Here is a quick visualization of all Project Portfolio Management processes.

A chart with all portfolio management processes listed

There are other methodologies that focus on managing the portfolio in an organization, with Management of Portfolios® being one of them. However, it’s worth noting that they address similar needs and their core concepts don’t differ significantly, either.

How PPM tools support portfolio management processes?

Project Portfolio Management software helps organizations in almost every process listed above. In fact, some of its benefits apply to multiple processes. We can group these advantages into four categories. Let’s dive into each one in detail.


With BigPicture, you can visualize your entire portfolio. It’s not just a list of initiatives, either. You can quickly create a complete structure for each program or business area in your organization. It’s instrumental in the Identification, Categorization, and Evaluation stages.

A screenshot showing the Overview module in BigPicture for a portfolio of initiatives
A portfolio-level view of all initiatives in BigPicture.

As for the Selection phase, you can combine the initiatives with various resources.
For instance, you can add time, budget, and people estimates.

Then, in Prioritization, the interactive modules allow you to move the components instantly to quickly create an order of the evaluated components. The drag-and-drop movement of elements can occur during the discussion of priorities, and it won’t interfere with the flow of the meeting.

Additionally, you have the option to add custom attributes to your list. For example, a scoring metric that helps you evaluate and prioritize the initiatives.


Gathering project-related data helps make better decisions. However, looking at lists of numbers isn’t the most intuitive way of assessment. PPM tools like BigPicture let you aggregate the data to see a broader scale of the information.

One of the metrics that support portfolio management processes is the budget. If you have a particular amount reserved or estimated, you can compare it to the sum of the budgets of each initiative. That way, you can quickly see whether the financial circumstances allow for all initiatives to happen.

Screenshot of the portfolio-level overview in BigPicture
Track the spending in your initiatives with ease in BigPicture.

Aggregation also supports effective Balancing. It’s particularly useful when the total cost of initiatives exceeds the available budget. With
BigPicture, you see all the numbers – individual allocations and the total. Removing projects is quick and easy, so you can stay within the budget at all times.

Similarly, you can use aggregated data to manage and allocate resources. With a complete set of information regarding availability and workload, you have a full picture of the staff and their readiness to take on new challenges.

Tracking goals

Proper alignment of initiatives with objectives is crucial in portfolio management. Unfortunately, most PPM tools overlook this area completely. In BigPicture, you can create a custom field with a goal of your choice and measure the progress of elements in its context. Alternatively, you can use the Objectives module. As a result, all the portfolio elements have specific reference points directly in the tool.

A screenshot of the portfolio overview in BigPicture with the goal column highlighted
Keep the strategic objectives in mind and in the overview of your entire portfolio.

The thing is, goal tracking is only possible with reliable project and program data.
BigPicture integrates with Jira seamlessly. Therefore, any inputs or changes in the portfolio elements flow into BigPicture automatically. It provides Portfolio Managers with accurate data to review their current initiatives. Using a Jira portfolio plugin means validating elements is based on data instead of guesswork.

Effective review is made easier thanks to the aforementioned aggregation options as well as reporting. A detailed set of values for various metrics offers insight you can use to verify progress on a regular basis. Reports serve as an easily-digestible form of presentation of the accomplishments and things to improve.

Cross-organizational cooperation

The synchronized relationship between BigPicture and Jira has another benefit. It improves the flow of communication within the entire organization. Instead of sending emails to project managers for status updates, Portfolio Managers can check the project’s progress in the overview of all the ongoing projects.

Managing an entire portfolio is a tall order. However, these processes should help you maintain control over your initiatives. Additionally, they will support the alignment of your business objectives. But to do it effectively, you need the right PPM tool. With BigPicture, you can visualize, aggregate, track, and coordinate complex portfolios easier than ever before. No matter which methodology you follow.