Portfolio Toolkit

Portfolio Management

Portfolio Management

Portfolio Management

Strategic management of programmes and projects to maximise organisational value, balance risk, and align investments with strategic objectives.

Portfolio Management

Portfolio management is the strategic oversight of programmes and projects to maximise value, balance risk, and ensure investments align with organisational strategy.

What is Portfolio Management?

Definition: Portfolio management is the coordinated collection of strategic processes and decisions that together enable the most effective balance of organisational change and business as usual.
Level Focus Timeframe
Project Deliver outputs correctly Weeks to months
Programme Achieve outcomes and benefits Months to years
Portfolio Maximise strategic value Ongoing, strategic

Portfolio Management Objectives

Objective Description
Strategic alignment Ensure investments support strategy
Value maximisation Get best return from investments
Risk balance Manage aggregate risk exposure
Resource optimisation Allocate resources effectively
Capability development Build organisational capability
Governance Provide oversight and control

Portfolio Management Cycle

flowchart LR A[Strategy
Alignment] --> B[Portfolio
Definition] B --> C[Prioritisation &
Selection] C --> D[Resource
Allocation] D --> E[Portfolio
Execution] E --> F[Review &
Rebalance] F --> A classDef blue fill:#108BB9,stroke:none,color:#fff class A,B,C,D,E,F blue
Phase Activities
Strategy Alignment Connect portfolio to strategic objectives
Portfolio Definition Define scope, categorise investments
Prioritisation Score, rank, and select investments
Resource Allocation Allocate budget and resources
Execution Deliver and monitor performance
Review Assess, rebalance, redirect

Portfolio Governance

Governance Structure

flowchart TD A[Executive Board/
Investment Committee] --> B[Portfolio Board] B --> C[PMO] C --> D[Programmes] C --> E[Projects] classDef blue fill:#108BB9,stroke:none,color:#fff class A,B,C,D,E blue

Decision Rights

Decision Programme/Project PMO Portfolio Board Executive
Day-to-day delivery Approve Monitor - -
Change within tolerance Approve Monitor Inform -
New investment < £100k Propose Recommend Approve Inform
New investment > £100k Propose Recommend Recommend Approve
Stop/pause investment Recommend Recommend Approve Inform
Strategic rebalancing - Recommend Recommend Approve

Portfolio Categorisation

Investment Categories

Category Purpose Examples
Run Keep the lights on Maintenance, compliance
Grow Improve current business Enhancement, efficiency
Transform Create new capabilities Innovation, new markets

Target Portfolio Mix

Category Current Target Direction
Run 60% 50% Reduce
Grow 30% 35% Increase
Transform 10% 15% Increase

By Strategic Theme

Strategic Theme Budget Allocation
Customer Experience 35%
Operational Excellence 25%
Digital Transformation 20%
Regulatory Compliance 15%
Innovation 5%

Prioritisation

Prioritisation Criteria

Criterion Weight Description
Strategic alignment 25% Fit with strategy
Financial return 20% ROI, NPV, payback
Risk 15% Delivery and business risk
Feasibility 15% Capability to deliver
Dependencies 10% Enabling other investments
Urgency 10% Time sensitivity
Resource availability 5% Capacity to resource

Scoring Matrix

Investment Strategic (25) Financial (20) Risk (15) Feasibility (15) Deps (10) Urgency (10) Resource (5) Total
Project A 22 18 12 13 8 9 4 86
Project B 20 16 14 12 6 7 5 80
Project C 18 20 10 11 9 8 3 79

Prioritisation Methods

Method Description Best For
Scoring model Weighted criteria scoring Objective comparison
Pairwise comparison Compare each pair Small number of options
MoSCoW Must/Should/Could/Won’t Quick categorisation
Bubble chart Plot on risk/value axes Visual portfolio view
Forced ranking Stack rank all investments Clear priority order

Portfolio Balancing

Balance Dimensions

Dimension Balance Required
Risk High risk / Low risk
Timeframe Quick wins / Long-term
Investment size Large / Small
Strategic theme Across all themes
Business area Across functions
Type Run / Grow / Transform

Portfolio Bubble Chart

Plot investments on a risk/value grid:

High   │ ○ Project C    ● Project A
Value  │      (risk?)        (invest)
       │
       │ ○ Project D    ● Project B
       │    (avoid)        (monitor)
Low    └────────────────────────────
       Low                     High
                 Risk

Demand Management

Demand Pipeline

flowchart LR A[Idea/
Request] --> B[Initial
Screen] B --> C[Business
Case] C --> D[Prioritisation] D --> E{Approved?} E -->|Yes| F[In Portfolio] E -->|No| G[Backlog/
Reject] classDef blue fill:#108BB9,stroke:none,color:#fff class A,B,C,D,E,F,G blue

Gate Criteria

Gate Criteria
Initial screen Strategic fit, rough feasibility, sponsor identified
Business case Benefits quantified, costs estimated, risks assessed
Approval Prioritised, resourced, funded

Resource Management

Capacity Planning

Resource Type Capacity Committed Available
Project Managers 10 FTE 8 FTE 2 FTE
Business Analysts 15 FTE 14 FTE 1 FTE
Developers 25 FTE 22 FTE 3 FTE
Architects 5 FTE 5 FTE 0 FTE

Resource Allocation Principles

Principle Application
Strategic priority Higher priority = first call on resources
Skill matching Right skills for the work
Utilisation targets Avoid over/under allocation
Flexibility Buffer for urgent needs
Development Stretch assignments for growth

Portfolio Performance

Key Metrics

Metric Description Target
On-time delivery % delivered on schedule >80%
On-budget delivery % within budget >85%
Benefits realisation % of forecast benefits >90%
Resource utilisation Productive use of capacity 80-85%
Pipeline health Ratio of pipeline to capacity 1.5-2x
Portfolio balance Mix across categories Per target

Portfolio Dashboard

Dimension Status Trend
Strategic alignment Green →
Delivery performance Amber ↓
Resource health Amber →
Financial performance Green ↑
Risk exposure Green →
Benefits tracking Green →

Portfolio Reporting

Report Types

Report Audience Frequency
Portfolio dashboard All stakeholders Real-time
Executive summary Board/Executives Monthly
Detailed portfolio report Portfolio Board Monthly
Resource report PMO/Managers Weekly
Benefits report Sponsors/Finance Quarterly
Risk report Portfolio Board Monthly

Executive Summary Content

Section Content
Overall status RAG and headline
Key achievements Major milestones this period
Issues/escalations Items requiring attention
Financial summary Budget vs actual
Benefits update Realisation progress
Decisions required Items for approval

Portfolio Reviews

Review Types

Review Focus Frequency
Health check Individual investment status Monthly
Portfolio review Aggregate performance Quarterly
Strategic review Alignment, rebalancing Annual
Gate review Go/no-go decisions At gates

Quarterly Portfolio Review

Agenda Item Questions
Performance Are we delivering? What’s off track?
Benefits Are benefits on track? Adjustments needed?
Resources Capacity issues? Skills gaps?
Risks Aggregate risk acceptable? Actions needed?
Balance Portfolio balanced? Reallocation needed?
Pipeline What’s coming? Capacity to absorb?
Decisions Investments to add/stop/pause?

PMO Role in Portfolio Management

PMO Functions

Function Activities
Governance Standards, processes, compliance
Reporting Consolidate, analyse, present
Resource management Capacity planning, allocation
Demand management Pipeline, prioritisation support
Assurance Health checks, reviews
Tools Systems, templates, methods
Support PM coaching, training

Common Challenges

Challenge Mitigation
Too many priorities Ruthless prioritisation, say no
Resource constraints Capacity-based planning
Poor visibility Consistent reporting, dashboards
Strategic drift Regular alignment reviews
Zombie projects Active portfolio pruning
Benefits not tracked Benefits realisation framework
Siloed decisions Portfolio-level governance

Portfolio Management Checklist

Setup

  • Portfolio scope defined?
  • Governance structure established?
  • Prioritisation criteria agreed?
  • Categorisation framework in place?
  • Reporting requirements defined?
  • PMO capability in place?

Ongoing

  • Regular prioritisation happening?
  • Resources actively managed?
  • Performance tracked and reported?
  • Benefits being monitored?
  • Risks aggregated and managed?
  • Portfolio regularly reviewed and rebalanced?
Last updated: 13 January 2026