Copyright

Business Portfolio Management: Definition & Example

Business Portfolio Management: Definition & Example
Coming up next: What is Project Portfolio Management? - Definition, Process & Tools

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:00 What's Business…
  • 1:16 Function & Goals
  • 3:24 Comparison to Project…
  • 4:12 Organizational Culture
  • 5:18 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Michael Fanning

Mike has been a Project Management Professional (PMP) for 12 years and has a master's degree in environmental, health and safety management.

In this lesson, we will learn about business portfolio management and how it enables organizations to make better choices about prioritizing projects and managing risk. When you are through, you can take a short quiz.

What Is Business Portfolio Management?

When baking a cake, many good cooks follow a recipe with precise measurements, cooking times, and list of ingredients. Simply collecting good raw components does not guarantee success. We need to follow proven processes to achieve the best possible results. That's the idea behind business portfolio management.

Business portfolio management is a process that enables organizations to manage multiple projects or individual projects for optimal results. The business portfolio management process works by identifying an organization's best project managers and using best management practices, strategic priorities, and valuable lessons learned in a project management office. Business portfolio management allows the organization to evaluate and balance conflicting demands for project resources. By aligning with organizational strategies and prioritizing the work, business portfolio management helps manage risk and provides cost-effective allocation of resources to the most deserving projects.

In this lesson, we will look at:

  • The functions and goals of business process management
  • The difference between business portfolio management and project management
  • How business portfolio management compares to project management
  • How organizational culture affects business portfolio management

Functions and Goals

Business portfolio management provides an opportunity for an organization to:

  • Prioritize which projects should be done first and receive adequate funding
  • Assure that scopes of work and work breakdown structures are clearly written
  • Track that timelines and budgets remain on schedule
  • Validate that all milestones and deliverables are completed on time and within budget to meet their sponsors' quality requirements

That is much easier said than done. It's also why so many companies are turning to business portfolio management to meet these goals and objectives. It is tough enough to assure one or two projects are completed on time. Now imagine how difficult that problem becomes when dozens of projects must be managed well, including those with crucial new product or operations deadlines, very large budgets, or long timelines that span multiple years. Business portfolio management can manage high priority projects or all of the projects at their designated organizational level. More often than not, it also provides other support as a center of excellence for project management.

Typical goals for business portfolio management include:

  • Establishing a communications project management policy
  • Providing project management training from basic through advanced levels
  • Mentoring project managers and team members
  • Assuring that documentation - including scopes of work, work breakdown structures, risk matrices, GANTT charts, meeting notes, and budget records - are kept current and follow standard practices

The value of this work is crucial for any project, but it becomes tremendously more valuable when multiple projects and large budgets are involved. For the company or organizational unit, portfolio management manages current operational and budget data on all projects and ensures adherence to organizational project management best management practices. For the project sponsor, he or she also is able to track that a particular project is moving ahead according to the project plan. For the project team and project manager, they also have access to the portfolio management 'dream team' to help them recognize and overcome any potential stumbling blocks that they might encounter.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support