IT Project Portfolio Management | Best Practices & Guide

Haleema Qayyum


Haleema Qayyum

IT Project Portfolio Management | Best Practices & Guide

Table of Contents

Project Portfolio Management is a process to keep track of activities and maintain detailed and comprehensive paperwork for your project. Portfolio management is the art of managing, utilizing, and assessing your project from various angles.

In this article, you will learn about the best practices of mastering this art along with some helpful techniques that will make your project experience more pleasant than always.

Project Portfolio Management

What is Technology Portfolio?

A technology portfolio is a bundle of useful information about a company’s investments in an IT niche or industry. This information is set or designed to show how these investments highlight and support the company’s goals.

Secondly, it is used to demonstrate the relationships between recent and planned investments. The portfolio intensifies the ability of decision-makers. Therefore, it is used to measure the possible influence of investments on a company’s overall IT infrastructure.

Related Article: Free Action Plan Template

The portfolio approach identifies the capabilities of the Legislation-sector Information Technology Community. Also, it points out the gradual advance of technology and the need for companies to look for novel and better initiatives in the context of their operations altogether, including IT investments.

The portfolio concept is based on the management rule of thumb that any important investment requires careful stewardship to elevate its value and protect it from threats to its integrity.

This principle is understood well for vintage and typical investment categories, such as real estate or property, commercial paper, and equity investments. All of them are commonly organized and managed in portfolios.

These portfolios allow authority-holders to view the capacity of investments as a whole but also consider separate investments in this context.

Need of an IT Portfolio

The need for an IT portfolio is not well understood with regard to IT investments. But it does not make it less important. Agency IT investments involve significant taxpayer funds that are often operation-critical; and are increasingly interdependent in a digital networking environment.

One can support IT investments effectively if the portfolio is sufficiently adaptable to changing business needs. On the other hand, their value can be determine by rigid design, unsubstantiated claims about capabilities or performance, and neglect.

Benefits of IT Portfolio Management

Portfolio-based IT management and foresight require a good business case to account for the investment of taxpayer funds in any new project.

It needs an assessment of the effect of the proposed system on the already existing IT infrastructure. It involves the disciplined use of safety or preventive measures to reduce risk, and it argues for leveraging private-sector expertise as needed.

As IT Portfolios are defined, they are reviewed to point out areas of duplication of effort or infrastructure and inconsistencies with the statewide direction.

Portfolio-based foresight removes most of the burden of a paper-dominant reporting process while placing a premium on activities that help in ensuring success.

In a nutshell, this concept provides three critical benefits:

  • Reduces Technology Project Risk
  • Introduces Novel Technology with Benefits
  • Ensure Critical Reviews of Technology

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What is IT Portfolio Management?

IT Portfolio management is the art of selecting and overlooking a group of investments that meet the long-term financial goals and risk tolerance of a client, a company, or a firm.

Understanding Portfolio Management

Professional and licensed Portfolio Managers work on behalf of clients, while individuals can build and manage their project portfolios.

In either case, the portfolio manager’s ultimate objective is to maximize the investments’ expected return and that too within a tolerable level of risk exposure.

Portfolio management requires the ability to measure strengths and weaknesses, opportunities and threats across the broad horizon of investments. The choices involve trade-offs, from debt versus equity to domestic versus international and growth versus safety.

Active and Passive Portfolio Management

Portfolio management can either be passive or active.

Active Management

It involves beating the performance of an index by actively buying and selling individual or shared stocks along with other assets.

Closed-end funds generally fall into this category. In addition, active managers may use a wide range of quantitative/qualitative models to aid their evaluations of potential investments.

Passive Management

It is a long-term strategy that requires a “set-it-and-forget-it” mindset. It may involve investing in one or more exchange-traded index funds.

This commonly refers to index investing. Therefore, those who build Indexed portfolios may use modern portfolio theory to help optimize the mix.

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Difference between Project Management and Portfolio Management

Project and IT portfolio management require some common or general skills. However, project management and portfolio management are two quite different things despite their similar names.

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

The functioning word in project portfolio management, on the other hand, is a portfolio. PPM is not concerned with running projects. Instead, its focus is on choosing which projects need involvement and how to fund them.

It is based on whether or not they support the goals and objectives of the company. Projects that do not fall within the scope of the company’s ultimate goals are instantly removed from contention.

If you are managing an IT company’s portfolio, for instance, you would most likely reject a proposed building project because it doesn’t align with the company’s stated strategy. For example, this strategy can focus only on some predefined type of tech projects.

Role of a Project Portfolio Manager

As we know that a manager is an important person in keeping track of a company’s project portfolio, a manager is equally integral for successfully implementing a business strategy.

Mostly, the role of a project manager revolves around aligning finance-related algorithms to the company’s strategic goals. Moreover, he keeps track of multiple financing portfolios.

The Portfolio Managers work on management standards. Then, they develop, organize and maintain them. Also, they lead the portfolio and keep a keen view of its progress.

Usually, PPMs are a part of the Project Management Office. However, the duty of maintaining a standard falls under the cap of PMO. Therefore, manager’s layout standards with obligations for the whole department to follow.

Further, a project management officer can also define a department or organization’s methodologies. For example, these methodologies can include Scrum or Agile. Therefore, a PMO makes sure that each project follows the suggested methodologies.

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ITPM Job Description

The job description (JD) of a project manager can involve the following duties:

  • Supervising the planning for a project
  • Development of the plan
  • Implementation of the strategy

How to utilize resources such as Information technology solutions, predefined rules and regulations, standards, and inculcation of top practices

Also, a Project Portfolio Manager maintains, expands, and builds management standards. Furthermore, he makes sure that the procedures are carried out progressively. For this purpose, a PPM keeps on taking feedback.

He makes sure that the project efforts are meeting the expectations of customers. Also, He makes sure if the services or project outcome is aligned with expected performance, time and cost.

ITPM Step-by-Step Guide

The Project Portfolio Management Process

In order to plan a project portfolio management process, it is necessary to take it to the progress step-by-step. Ultimately, a careful stepping towards a project will ensure the proper implementation of strategic portfolio management.

Below are a few steps to guide a project portfolio management process:

The process of PPM
Create an Inventory and Establish a Strategy

First of all, you need to identify what are your upcoming projects. These projects may include potential projects. You can identify them by accumulating key information regarding the project or organization.

Secondly, start by categorizing your projects. Look where they are standing in terms of progress. Point out your company’s end goals, business intentions. Also, analyze if the projects in the pipeline support your company’s ultimate goals.

We all know that carefully planned business strategies are the basis of project portfolio management. Therefore, it is necessary to have a proper plan before plunging into a project right away.

During this process, you might face a lot of questions. Such as, “What is Project Portfolio management after all?” “How much it can demand at the company’s end?” “Would this be beneficial in short-term objectives or the long run?” Above all, you can even ask, “Why your company needs PPM?”

It is always advisable to prepare these questions beforehand. Also, for better management, you need to determine a prioritizing process for the projects.

Once you are all set with a strategy, organize a team that will take care of the implementation of the defined process. In a nutshell, you can start by taking technical team members and portfolio managers on board.

Gradually, this implementation team also needs a managing body to govern and assess their actions. Therefore, this governing body will involve senior management staff or faculty.


The next step is to analyze. This analysis includes your current status, strengths, shortcomings or weak areas, project expectations or milestones, the potential return on investment schedules, resource allocation, etc. So, you can start by evaluating each project independently on the given parameters.

Once you are done collecting data, it is wise to organize the data according to categories. Although there can be a lengthy list of these categories, you can start by including things like the ratio of your failed and successful projects or survival category.

Based on this report or analysis, you can conveniently define whether there is a repeating pattern in your project success-failure ratio or not. Consequently, you will better understand and foresee the progress of your projects in the pipeline. Also, this analysis will maximize future success results and improve the efficiency of your projects.

By getting a clear picture of all sides of a project, you can easily evaluate the risk ratio. Therefore, compare the possibility of technical success against the potential benefit or outcome from the project. A good flow of communication in this process will benefit you greatly. So, make sure you are discussing the project thoroughly.

Ensure Alignment

The next step is to bring about an alignment analysis. This Alignment can involve several variables. For instance, make sure if you are spending your best resources on the most important projects or not.

Another example can also be that; are your projects resembles with the strategic goals your company is aiming to achieve? A few guiding principles for this analysis might include:

  • The extent to which the portfolio and your company’s end goals agree with each other. There needs to be a balance among the variables such as; growth opportunities, long-term goals, and your planning for development as a more innovative company.
  • Also, make sure that your project’s outcomes align with the financial or material inputs you are investing in the project.
  • Moreover, ensure a profited turn-over, or there would be no loss in the expected return.
  • Run an evaluation of possible risks because it is suggestable to have a broader horizon when dealing with a project.
  • Moreover, never limit your risk analysis sheet by just including financial risks in it. Risk analysis also includes time management, the scope of your resources, and technical risks.

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The fourth step is to look at your project from a management perspective. This is a point in your project where you need to make important decisions regarding the resources you are spending on your project. Maybe, at this step, you need to reconsider your previous decision and reshape them according to your current needs.

There is a need to consider everything again once you plunge into the project directly. Some of the things do not go as planned. Therefore, this sort of reconsideration can involve resource management, risk analysis, and change management.

Moreover, you might need to reschedule the projects. Before directly making any decision, make sure that your decisions support your business or project strategy. In this case, collaboration is key to the right kind of portfolio.

In essence, you will have a properly calculated portfolio with a healthy amalgam of risks and rewards that would help you meet your desired results.

Test and Adapt

Lastly, test and make your strategy compatible. There is no parameter to measure a project’s success before implementation time. But you can expect good results after professionally managing your project portfolio.

Moreover, during the process, you will be making changes according to the need of the hour. This is called adaptation, as a project process is not linear. On the contrary, a project goes through various ups and downs, and you need to alter your strategies accordingly.

Moreover, the idea of testing and adapting means testing your portfolio with some of your stakeholders. Also, you can take feedbacks from the stakeholders. This will help you assess the success rate of your project more clearly.

As you can see, Project Portfolio Management is quite an uncertain task in its nature. Also, it can be confusing in the beginning. For this purpose, portfolio management templates and software can help.

Action Plan of PPM

6 Step Action Plan for Effective Portfolio Management

A well-managed and effective portfolio can deliver the right initiatives at the right time. Also, this ensures the achievement of expected outcomes.

In this regard, Project Portfolio Managers are the key bodies that choose perfect styles for portfolios. As they do it according to the project’s demands, they lessen the chances of failure.

You can also check out effective portfolio management practices that are listed below;

Ensure Visibility into Work and Constraints

In order to remove any constraints, it is crucial to identify them and remove them on time. Resultantly, this will improve the performance ratio of your portfolio.

The Project managers can ensure this by keeping proper track of the activities. There are fair chances that the project would not fail by corroborating transparency.

Once the Project Portfolio Managers are sure about the dynamics of the process, they can easily determine the risks and interdependencies. Moreover, they can easily and effectively assign tasks and allocate them on a priority basis. This way, there will be no negative impacts on the portfolio.

Prioritize Around Customers’ Expectations

In the past couple of years, we have observed that almost everything has been digitalized. Consequently, there is a huge leap in customer expectations. Naturally, this drives the organizations to take more blunt steps and incorporate innovative ideas. After all, they are expected to satisfy customer needs.

Customer needs and an organization’s budget are two interdependent variables. Without knowing customer behavior, demand or expectation, you may end up investing your finance in infertile strategies.

So, knowing your market and customer is important. This analysis will help you take calculated risks and may save you from investing your resources in the wrong direction.

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Apply Adaptive Resource Management

Extra usage of agile methods can make you face significant challenges for resource management. The reason behind that is, most digital businesses are unpredictable and do not follow the same patterns every time.

Of course, they are not rigid and always have a flexible room for changed behaviors and strategies. So, a smart trick to tackle this situation is to pick an adaptive approach, shift your focus on allocating wisely. Invest resources as per market trends and stick to changing customer needs.

This is equal to creating an environment where your resources are perfectly aligned, and there are no risks in taking initiatives and obtaining optimum results. To acquire or achieve these results, make sure to:

  • Manage and recognize the interdependent risks.
  • Ponder the competing priorities.
  • Identify hindrances or obstructions between the strategic coordination and the groups
Deliver Value Continuously

Whenever you design a management portfolio, it ensures some outcome or value. Therefore, you can assess this value by analyzing whether this portfolio is engaging sponsors regularly or not? Also, this method will help you to snap the moment your portfolio becomes irrelevant and bland.

Engage in progressive meetings regularly. Consult your team and discuss all the dynamics of your project, including progress, shortcomings or required improvements, etc. Surely enough, this is a good way of keeping everyone hooked on the project.

Create a Change-Enabled Culture

Digitalization does not only cause changes at the customer’s end, but it also troubles with drastic changes in business and technological processes.

As a result, this can cause unwanted consequences and impact the experience of both customers and employees. Therefore, assessing how much change is a good change is cardinal. This way, you can handle changes in a better way.

The main features of a change-enabled culture are:

  • Feedback and communication channels involving business leaders, managers, and end-users
  • Engagement with change harbingers at various levels
  • A confirmed and executive roadmap for change
Realize Benefits Continuously

Over time, digital businesses have evolved. Therefore, keeping track of results and portfolio management are pivotal. However, only a dedicated owner can keep track and register real benefits.

The obtained value can result from a continuous stream of efforts by organizations. Therefore, it is natural that these organizations expect faster results and benefits. In this case, these benefits must be viewed as total units.

Organizations that have experienced failures tend to make better and informed decisions at portfolio management for future business ventures.

In case they are not able to realize a business situation or expected outcomes of a project, they might visit their past projects and ask such aiding questions:

  • Are they aware of customer needs?
  • Have the market conditions changed?
  • Did they overestimate value?
  • Do they have an analysis of the risks and complexities involved?

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ITPM Examples

As far as the definition of an IT Project is concerned, it is a type of project that deals with Information Technology Infrastructure, Computers, Software, and Information Systems.

IT examples may include:

  • Web development
  • Software development
  • Mobile app development
  • Network configuration
  • Software implementation
  • Hardware installation
  • Database management
  • And IT emergency recovery
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Six Phases of an IT Project

Six phases of an IT Project are interrelated with the six phases of project management. These are used in conjunction with the phases of IT to manage projects. These phases are as follows:


Before jumping into an IT project, one should ask, “Is this project necessary or why is it needed?” It is necessary to identify the objective and purpose of the project.

Once you are past this questioning stage, you need to design a proper business plan and a project proposal. In addition to this, it requires another study to ensure if the proposal is set to achieve its goals.


Once your project proposal is final, the next step is to move your project to the next phase. The next phase is the definition phase. In this phase, the goals and aims of the project are analyzed, and needs for its success are spotted.

During this phase, the project’s scope is also determined and designed. A project plan is also created during this stage. Almost everyone sets a financial structure or framework during this period too.


During the designing chunk of an IT Project, the team finds the best solutions for achieving optimum or maximum goals. In this stage, the team will design multiple blueprints and archetypes.

Then they choose the best among these designs. Once it is decided, special instructions are placed before the development team. It is done after the development team is finalized.


The next phase is called the development phase. It starts with the allocation of tasks to the selected team. The aiding tools for project management are also selected during this phase. In addition to that, the team arranges resources at this stage, such as raw materials, finances, and technical equipment, etc.

Mainly, this step ensures the transparency of the project. After this step, the project becomes crystal clear and enters the progress phase.


Not to surprise, this is the longest phase of all as it involves active input or working. The final deliverables of an IT project are developed in the implementation phase.

The Project team is all set to embark on completing tasks, and the manager is all set for surveillance and monitoring each step. Due to resources under the roof, managers control and supervise the work, quality, cost, resources, and risks more efficiently.

Follow Up

As a final step, after the implementation phase is done, the project managers deliver the project to stakeholders, customers, or clients.

We can understand the follow-up phase as the revision phase or touch-up once the project is delivered. At this phase, the company or organization creates a supporting team, trains a team as end-users, and closes the project.

Mostly, IT projects are managed with conventional methodologies such as the Agile framework. Although, if firms replace traditional methodologies with DevOps or RAD, they can maximize the results, obtain high-quality output on comparatively less investment.

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10 Benefits of Project Portfolio Management

Project Portfolio Management is about running research and studies to register potential projects based on their anticipated success ratio/chances. Also, PPM adjusts strategies among the organization’s benefits, the success of the project, and apparent risks.

An effective Project Portfolio Management brings the following benefits to a firm:

Project portfolio Benefits
Improved Project Selection Process

Project portfolio Management spotlights selecting appropriate projects that go along with your organizational goals. It helps select the right kind of projects according to your business goals, risks, available resources, and other criteria.

Often, the end goal of PPM is to pick up the projects that have the maximum potential of delivering value to your organization.

A PPM does not beat around the bush. Instead, it uses clear methods such as qualitative and quantitative analysis techniques and ranking, scoring, or heuristic methods. All this is done to make sure that progress on a project is beneficial for the organization.

Better View of the Big Picture

It is difficult for organizations to focus on long-term projects as they need to be supervised for extended periods. Usually, Long-term projects span over months or even years, and organizations tend to lose their focus due to various reasons such as short-term goals or large and hard to manage huge infrastructures.

At this point, management seems a little difficult. Often, there are chances of poor budgeting; your finances may shrink. Therefore, there are chances you forget the bigger picture in such issues.

Project Portfolio Management helps in putting everything into perspective. Also, it helps in making tough decisions and includes the big picture of organizational benefits in the long run.

Focus on Objective Business Goals

Do you know? Almost 37% of the executives believe that lack of defined goals is the primary reason for an organization’s failure. Often, organizations do not get a clear picture of necessary targets. As a result, they ignore the milestones to measure progress.

Project Portfolio Managers are always there to ensure that business comes at the leading position. The team of Project Portfolio Managers organizes this field space where they are allowed to ask as many questions to give the project more transparency.

Project Portfolio Managers are an integral part of the organization. It is so because most of the organization’s strategic plans are based on the analysis performed by the PPMs.

Collaboration over Competition

In large firms, there are strong chances of multiple projects getting in conflict with each other. Projects based on their priority can grasp more attention and utilize more resources. There is a tussle that goes on between big and small projects.

The role of Project Portfolio Managers is to tackle this situation and neutralize the projects through various strategies. They remove redundancies from the projects and highlight innovative aspects of each project so they can enjoy a fair amount of attention.

By pointing out some common things among the projects, PPMs ensure that the managing teams come on a single board and cooperate to ensure the successful implementation of all the projects.

More Efficient Use of Resources

Research shows that almost 26% of executive project leaders explain the reason behind a project’s failure and say that it happens due to poor allocation of resources. Because projects immensely depend on resource management.

Although resource planning and management are burdensome and tiring, their importance cannot be argued. There are two ways to look at a project in terms of resources allocation:

  • You decide your projects according to the availability of the resources.
  • Or you arrange resources after deciding on a project.

A project portfolio enables and eases this difficulty. In addition, it helps in choosing a neutral way to decide on projects based on your available resources.

If these resources are insufficient, you generate more pools to extract sufficient resources to aid your projects. This way, no project will ever be a risk on the company’s end.

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More accurate Project Performance Data

A Project Portfolio demands continuous surveillance and checking. In this regard, Project Portfolio management tools aid a lot. They help in connecting portfolio data with ongoing project indicators. This helps in assessing if the portfolio’s performance is according to the expectations or not.

Therefore, keeping track of performance help in identifying embryonic trends that can impact a project negatively. So, PPM minimizes the chances of ultimate project objective failures. In addition, PPM ensures the gathering of coexisting metrics and makes it feasible to adapt to changing environmental needs at a suitable time.

Increased Timely Project Deliveries

Despite maximum efforts, it is quite difficult to manage all the projects’ deliveries on time because many factors can influence the projects and cause late deliveries.

There is an interesting fact to note. The project champions who complete their projects within time and specified budget occupy a percentage of 90. On the other hand, only 25% of underperformers can do so.

The main reason is that successful and practical organizations focus more on bridging strategy formulation and execution. Interestingly, this management falls under the duties of Project Portfolio Managers. Therefore, they are liable to balance strategies and later on their execution.

Decreased Organizational Risk

There is a difference between management and project portfolio management. Management possesses a limited view of a project, while Project Portfolio management holds a more holistic and broader view. Therefore, PPM keeps track of everything in pairs.

For instance, if they analyze risks, they also look for expected outcomes of the entire project portfolio. Proper calculation helps organizations prepare for incidents with life-saving backup plans. So, the risks to organizational risk can automatically reduced.

More Informed Decision-Making

The importance of good decision-making cannot be underestimated. It is important to make the right decisions according to your organization’s needs. Therefore, for this purpose, you need to look into the past experiences of your organization. Only after that, the senior managers can lead well-calculated business activities.

For instance, you can look into your organization’s past spending or budgeting patterns. Then, assess how big investments affected your projects. For example, did groundbreaking decisions instantly give a kick to your projects or destabilize them?

Project Portfolio Management always encourages the consistent usage of data-centric tools. Surely, this strategy enables project leaders to make the right decisions.

Increased ROI

Return on investment is one of the main concerns every organization has. Therefore, ROI ranges from the financial return to service regulation or compliance for an organization.

Maintaining a project portfolio or using PPM tools is always beneficial. Also, you can train your team to work under a management portfolio hat. With this strategic planning, you can predict the success of your project, can make better finance-related decisions, and expect a better ROI.

Portfolio Management Best Practices

Portfolio Management helps you build a strategic perspective towards managing various activities. You can plan things for your ongoing or pending projects. Here are a few best practices to adopt to boost your business’ strategic growth:

  • Focus on one step at a time. Do not involve in a series of activities that might get irrelevant at the end, and your project gets out of track.
  • Monitor the approach you are using to build the strategic framework of your project.
  • Use appropriate software that conforms to the needs of your project and aid in increasing your project’s efficiency.

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Top 5 Frequently Asked Questions

What does an IT Portfolio Manager do?

He devises and implements investment strategies or processes to meet client goals and constraints, construct and manage portfolios, and decide what and when to buy and sell investments.

How do I make a Portfolio with No Experience?

This is how you can build a portfolio from scratch and no experience at all:

• Shift your mindset.
• Become a professional.
• Your portfolio is now more important than your resume.
• Make your opportunities.
• Don’t undervalue what you know.
• Get your first clients.
• Do low-cost (or free) work.

What are the Three IT Project Portfolio Categories?

Combe and Githens (1999) identify three general types of project portfolios:
• Value creating: Strategic or enterprise projects.
• Operational: Projects that make the organization more efficient and satisfy some fundamental functional work.
• Compliance: “Must-do” projects are required to maintain regulatory compliance.

Why is Portfolio Management important in IT Industry?

Project Portfolio Management discipline provides a systematic way of capturing and sharing the data related to project activity across the whole enterprise. In addition, it enables the organization to make timelier and smarter decisions.

How many Writing samples are in a Portfolio?

Mostly, 10-20 Writing Samples are enough. Your portfolio should include enough samples to give people a good idea of your range of writing talent and technical expertise.

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