Portfolio Management Knowledge Areas, Process Groups & Processes

Knowledge Areas Defining Aligning Authorizing & Controlling

Process Group Process Group Process Group
1. Develop Portfolio Strategic Plan
Portfolio Strategic
2. Develop Portfolio Charter 4. Manage Strategic Change
Management (4)
3. Define Portfolio Roadmap

8. Authorize Portfolio
Portfolio 5. Develop Portfolio Management
Governance (5) 7. Optimize Portfolio
Plan
6. Define Portfolio 9. Provide Portfolio Oversight

11. Manage Supply and Demand

Portfolio Performance 10. Develop Portfolio
Management (3) Performance Management Plan
12. Manage Portfolio Value

Portfolio Communication
13. Develop Portfolio 14. Manage Portfolio
Management (2)
Communication Management Plan Information

Portfolio Risk
15. Develop Portfolio Risk
Management (2) 16. Manage Portfolio Risks
Management Plan

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Portfolio Management Knowledge Areas, Process Groups & Processes

Major Processes Primary Inputs Tools & Techniques Primary Outputs

PORTFOLIO STRATEGIC MANAGEMENT
Defining Process Group
The Develop Portfolio Strategic Plan process consists of developing a 1. Organizational 1. Portfolio 1. Portfolio
1. Develop Portfolio
portfolio strategic plan and aligning the strategic management of the Strategy & Objectives Component Strategic Plan
Strategic Plan
portfolio to the organizational strategy and objectives. 2. Inventory of work Inventory 2. Portfolio
3. Portfolio Process 2. Strategic Alignment
Assets Analysis
4. Organizational 3. Prioritization
Process Assets Analysis
5. Enterprise
Environmental
Factors

2. Develop Portfolio During the Develop Portfolio Charter process, the portfolio charter is 1. Portfolio Strategic 1. Scenario Analysis 1. Portfolio
Charter created and the portfolio structure is defined. The portfolio charter is Plan 2. Capability & Strategic Plan
produced through this process to authorize the portfolio manager to apply 2. Portfolio Process Capacity Analysis Updates
portfolio resources to portfolio components and to execute the portfolio Assets 2. Portfolio
management processes. The structure is developed based on strategies and 3. Enterprise Charter
priorities, and portfolio components are grouped to facilitate effective Environmental 3. Portfolio Process
management. The structure identifies the portfolio, subportfolios, programs, Factors Assets Updates
and projects based on organization areas included, hierarchies, timelines, and
goals for each program, project, and operation to align with the portfolio
strategic plan. Once the structure is defined, updates will be needed to the
strategic management plan and portfolio process assets to ensure goals and
standards alignment.

3. Define Portfolio Portfolio roadmaps are an output of high-level portfolio planning that 1. Portfolio Strategic 1. Interdependency 1. Portfolio
Roadmap graphically depicts all portfolio elements needed to achieve organizational Plan Analysis Roadmap
strategy and objectives. The roadmap provides a high level plan which should 2. Portfolio Charter 2. Cost Benefit
then be used for identifying both internal and external dependencies. The 3. Portfolio Analysis
portfolio roadmaps may contain both program level and project level 3. Prioritization
roadmaps included in the scope of the portfolio. Roadmaps may not provide Analysis
details of all identified portfolio components at the onset, however, they may
be used to build details later.

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Portfolio Management Knowledge Areas, Process Groups & Processes

Aligning Process Group

4. Manage Strategic The Manage Strategic Change process enables the portfolio manager to 1. Portfolio Strategic 1. Stakeholder 1. Portfolio
Change manage changes in organizational strategy and to enhance the ability to Plan Analysis Strategic Plan
accept and act on significant strategic change that impacts portfolio planning 2. Portfolio Charter 2. Gap Analysis Updates
and management. 3. Portfolio 3. Readiness 2. Portfolio
As strategy shifts, the “as-is” state must be compared with the “to-be” state 4. Portfolio Roadmap Assessment Charter Updates
(which may be evolutionary or incremental in nature), and a gap may result 5. Portfolio 3. Portfolio
in a realignment of resources or adjustments in the portfolio component mix Management Plan Updates
to support the strategic change. Change in portfolios is a normal occurrence, 6. Portfolio Process 4. Portfolio
and, depending on the significance of the changes, portfolio documents may Assets Roadmap
need to be reworked to ensure continued alignment with the strategy. This Updates
repeated adaptation is in contrast to the progressive elaboration required in 5. Portfolio
project management. This process is an aligning process to identify the gap Management Plan
between as-is and to-be states and to analyze the impact and response to Updates
strategic changes and changes in resources (people, processes, and 6. Portfolio Process
assets/technology). The vehicles used to plan and execute the strategic Assets Updates
change are the portfolio strategic plan and portfolio management plan.

Major Processes Primary Inputs Tools & Techniques Primary Outputs

PORTFOLIO GOVERNANCE
Defining Process Group
5. Develop Portfolio The Develop Portfolio Management Plan process consists of developing and 1. Portfolio Strategic 1. Elicitation 1. Portfolio
Management Plan updating the portfolio management plan to ensure alignment with the Plan Techniques Strategic Plan
portfolio strategic plan objectives, the portfolio charter authorization, and 2. Portfolio Charter 2. Portfolio Updates
the portfolio roadmap. Portfolio management plan development is an 3. Portfolio Roadmap Organizational 2. Portfolio
iterative process and includes the integration of subsidiary plans such as 4. Portfolio Process Structure Analysis Management Plan
performance, communication, and risk management plans. This collection of Assets 3. Integration of 3. Portfolio Process
plans may be developed concurrently or separately. The portfolio 5. Organizational Portfolio Assets Updates
management plan establishes how a portfolio is defined, organized, Process Assets Management Plans
optimized, and controlled 6. Enterprise
Environmental
Factors
6. Define Portfolio The purpose of the Define Portfolio process is to create an up-to-date list of 1. Portfolio Strategic 1. Portfolio 1. Portfolio
qualified portfolio components by identifying, categorizing, scoring, and Plan Component Updates
ranking portfolio components. This process is required to produce an 2. Portfolio Charter Inventory 2. Portfolio

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Portfolio Management Knowledge Areas, Process Groups & Processes

organized portfolio for ongoing evaluation, selection, and prioritization. This 3. Portfolio 2. Portfolio Roadmap
process ensures resources are or will be working on portfolio components 4. Portfolio Roadmap Component Updates
that will provide the most significant value for the investment and are most 5. Portfolio Categorization 3. Portfolio
strongly aligned to the organizational strategy and objectives Management Plan Techniques Management Plan
Key activities within this process include: 6. Portfolio Process 3. Weighted Ranking Updates
§ Identifying qualified portfolio components through the evaluation and Assets and Scoring
assignment of key descriptors, Techniques
§ Categorizing portfolio components to which a common set of decision
filters and criteria may be applied, and
§ Evaluating portfolio components with a ranking and scoring model
comprising weighted key criteria

Aligning Process Group

7. Optimize The purpose of this process is to optimize and balance the portfolio for 1. Portfolio 1. Capability and 1. Portfolio
Portfolio performance and value delivery. Portfolio optimization involves evaluating 2. Portfolio Roadmap Capacity Analysis Updates
the portfolio based on the organization’s selection criteria, ranking those 3. Portfolio 2. Weighted Ranking 2. Portfolio
portfolio components, and creating the portfolio component mix with the Management Plan and Scoring Roadmap
greatest potential to collectively support the organizational strategy. 4. Portfolio Reports Techniques Updates
Portfolio optimization includes planning and allocating resources according 5. Portfolio Process 3. Quantitative & 3. Portfolio
to organizational strategy and objectives and maximizing portfolio return Assets Qualitative Management Plan
within the organization’s predefined risk profile and tolerances. It is Analysis Updates
important to balance the portfolio with respect to the diverse goals of the 4. Graphical 4. Portfolio
organization, such as financial, organizational development and operational Analytical Methods Reports
performance goals 5. Portfolio Process
Assets Updates
Key activities within this process include:
§ Assigning or reassigning, scoring, or weighting criteria for ranking
portfolio components;
§ Performing risk analysis on portfolio components based on the
organization’s risk profile;
§ Evaluating and determining performance and expected value and benefits
(financial and non-financial) of portfolio components;
§ Determining resource (human, assets, and technology) capability,
resource capacity available, and constraints for portfolio components;
§ Determining which portfolio components should receive the highest
priority within the portfolio; and
§ Identifying portfolio components to be suspended, reprioritized, or
terminated based on the balancing or rebalancing activities.

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Portfolio Management Knowledge Areas, Process Groups & Processes

Authorizing & Controlling Process Group

8. Authorize The purpose of this process is to activate selected portfolio components by 1. Portfolio 1. Portfolio 1. Portfolio
Portfolio allocating resources to develop component proposals or execute portfolio 2. Portfolio Authorization Updates
components; update relevant portfolio reports such as funding updates, Management Plan Process 2. Portfolio
resource assignments, and allocations; and document governance decisions. 3. Portfolio Reports 2. Portfolio Management Plan
The changes in the portfolio and related decisions are communicated to Management Updates
interested parties, governing bodies, stakeholders, and portfolio, program, Information System 3. Portfolio
and project managers. Key activities within the process include: Reports
§ Authorizing portfolio component proposal development or portfolio 4. Portfolio Process
component execution; Assets Updates
§ Allocating resources to authorized portfolio components;
§ Reallocating funding and resources from deactivated and terminated
portfolio components to activated portfolio components or the
resource pools; and
§ Communicating changes and decisions for the authorized portfolio
components.

9. Provide Portfolio The purpose of the Provide Portfolio Oversight process is to monitor the 1. Portfolio 1. Portfolio Review 1. Portfolio
Oversight portfolio to ensure alignment with organizational strategy and objectives and 2. Portfolio Roadmap Meetings Updates
make governance decisions in response to: 3. Portfolio 2. Elicitation 2. Portfolio
§ Portfolio performance; Management Plan Techniques Management Plan
§ Portfolio component proposals and changes; 4. Portfolio Reports Updates
§ Availability of resource (human, technology, and other assets) capability 5. Portfolio Process 3. Portfolio
and capacity; Assets Reports
§ Funding allocations and future investment requirements; and 4. Portfolio Process
§ Risks and issues. Assets Updates

Key activities within this process include:

§ Reviewing information on portfolio resources, risks, performance, and
financial information;
§ Conducting recurring and nonrecurring governance meetings for reviews
and decision making;
§ Ensuring compliance with organizational standards;
§ Reporting portfolio changes and information on resources, risks,
performance, and financials; and
§ Communicating governance decisions.

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Portfolio Management Knowledge Areas, Process Groups & Processes

Major Processes Primary Inputs Tools & Techniques Primary Outputs

PORTFOLIO PERFORMANCE MANAGEMENT
Defining Process Group
The portfolio performance management plan is a subsidiary plan of the 1. Portfolio 1. Elicitation 1. Portfolio
10. Develop
portfolio management plan or a component of the portfolio management Management Plan Techniques Management Plan
Portfolio
plan. It explains how portfolio value is defined and details how portfolio 2. Portfolio Process 2. Portfolio Updates
Performance
components are allocated for financial, human, and material or equipment Assets Management 2. Portfolio Process
Management Plan
resources. Performance planning starts with reviewing the portfolio goals set 3. Organizational Information System Assets Updates
in the portfolio strategic plan, and the objectives set to reach these goals. Process Assets 3. Capability and
Performance management is a discipline for measuring and analyzing 4. Enterprise Capacity Analysis
progress against goals to determine if changes to the objectives, strategies, Environmental
metrics, or to the portfolio component mix need to be made. Factors
Recommendations for changes are based on performance, changes in
resource capability or capacity (constraints), benefits realization,
assumptions, dependencies, or risks

Aligning Process Group

11. Manage Supply The required portfolio resources, according to each initiative’s business case 1. Portfolio 1. Scenario Analysis 1. Portfolio
and Demand or plan, should be identified, and an inventory of resources and capabilities 2. Portfolio 2. Quantitative & Updates
should be aggregated at the proper level of detail. This demand is then Management Plan Qualitative 2. Portfolio
mapped to existing organizational resources: funds, other tangible and 3. Portfolio Reports Analysis Management Plan
intangible assets, as well as key human resources, such as program and 3. Capability and Updates
project managers and subject matter experts. A master schedule of resource Capacity Analysis 3. Portfolio
allocation is necessary to plan the consolidated demand of portfolio Reports
resources.
The term “supply” refers to resource capacity including funding and staffing
resources as well as equipment and other physical assets shared among
portfolio components. “Demand” is the resource requirement from the
portfolio components and from the component proposals requesting
resources. The goal in managing supply and demand is to ensure resource
capacity is optimally allocated against resource requirements or demand
based on known organizational priorities and potential value. Resources
should be allocated to minimize both unused capacity and unmet demand.
The ideal outcome requires diligent, iterative resource management and
optimization processes

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Portfolio Management Knowledge Areas, Process Groups & Processes

12. Manage Portfolio value for an organization can be expressed in multiple ways, 1. Portfolio Roadmap 1. Elicitation 1. Portfolio
Portfolio Value including by revenue growth, increased operating margins, employee or 2. Portfolio Techniques Management Plan
customer satisfaction, contribution to the community, enhancement or Management Plan 2. Value Scoring and Updates
protection of reputation and branding, and protection of environmental 3. Portfolio Reports Measurement 2. Portfolio
resources. Portfolio value is defined as the aggregate value delivered by the Analysis Reports
portfolio components, and the goal is to deliver the maximum value possible 3. Benefits Realization 3. Portfolio Process
aligned with strategic objectives and with an acceptable level of risk based on Analysis Assets Updates
the risk tolerance of the organization.

The method of defining value can differ among organizations. A value

measurement framework is often helpful in organizing the value that is to be
created, how value will be measured, and recognizing the possible types of
value, including both tangible and intangible benefits. The measurement
framework facilitates comparison of expected value across the various
components and supports informed portfolio decision making for authorizing
those components with the maximum expected net value to the
organization. The net value considers the expected gross benefits or value
minus the required investment of time and resources

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Portfolio Management Knowledge Areas, Process Groups & Processes

Major Processes Primary Inputs Tools & Techniques Primary Outputs

PORTFOLIO COMMUNICATION MANAGEMENT
Defining Process Group
Portfolio communication facilitates a two-way effective dialogue between 1. Portfolio 1. Stakeholder 1. Portfolio
13. Develop
affected internal and external stakeholders, individuals, or groups, including: 2. Portfolio Roadmap Analysis Management Plan
Portfolio
§ Executive managers, 3. Portfolio 2. Elicitation Updates
Communication
§ Operations managers, Management Plan Techniques 2. Portfolio Process
Management Plan
§ Governing bodies, 4. Portfolio Reports 3. Communication Assets Updates
§ Sponsors, 5. Portfolio Process Requirements
§ Project/program/portfolio managers, Assets Analysis
§ Suppliers and external resource providers,
§ Regulatory bodies, and
§ Others.
In order to develop the portfolio communication management plan,
stakeholder identification and analysis is necessary in addition to the
determination of communication requirements

Aligning Process Group

14. Manage The process to manage portfolio information includes collecting, analyzing, 1. Portfolio 1. Elicitation 1. Portfolio
Portfolio storing, and delivering portfolio information to stakeholders in accordance 2. Portfolio Techniques Management Plan
Information with their requirements in a timely manner. In managing portfolio Management Plan 2. Portfolio Updates
information, communication is delivered to the intended audiences through 3. Portfolio Reports Management 2. Portfolio
various communication mechanisms. Many communications are also stored 4. Portfolio Component Information System Reports
for a period of time in portfolio repositories for future access. Reports 3. Communication 3. Portfolio Process
When using web portal dashboards to communicate status, processes need 5. Portfolio Process Requirements Assets Updates
to be created and managed to ensure updates are accurate and timely. If the Assets Analysis
portfolio management capability is not sufficiently mature in the organization, 4. Communication
spreadsheets may be used to ensure accuracy for PMIS rather than an Methods
automated tool

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Portfolio Management Knowledge Areas, Process Groups & Processes

Major Processes Primary Inputs Tools & Techniques Primary Outputs

PORTFOLIO RISK MANAGEMENT
Defining Process Group
A risk management plan is a component of the project, program, or 1. Portfolio 1. Weighted Ranking 1. Portfolio
13. Develop
portfolio management plan that describes how risk management activities Management Plan and Scoring Management Plan
Portfolio Risk
will be structured and performed. It also includes reference to the corporate 2. Portfolio Process Techniques Updates
Management Plan
risk management guidelines, policies, and procedures that define the Assets 2. Graphical 2. Portfolio Process
organization’s risk strategy, tolerance, and thresholds for the organization. 3. Organizational Analytical Methods Assets Updates
The risk management plan provides the approach that will be used by the Process Assets 3. Quantitative & 3. Organizational
governing bodies for assessing risk in proposed new portfolio components. 4. Enterprise Qualitative Process Assets
Different types of new investments will be considered knowing that generally Environmental Analysis Updates
venture or growth-type investments carry more attraction due to a higher Factors
potential return, but they are a higher organizational stretch and, on average,
carry higher risk. In order to maximize return on investment of resources,
some high-risk investments may be considered, but the risk management
plan will show how the governing bodies should work to balance investment
risk and manage the overall expected return against known risks. The result
is risk-based decision making.

Aligning Process Group

14. Manage Manage Portfolio Risks consists of four stages: 1. Portfolio 1. Weighted Ranking 1. Portfolio
Portfolio Risks (1) Risks are identified, 2. Portfolio and Scoring Management Plan
(2) Risks are analyzed, Management Plan Techniques Updates
(3) Risk responses are developed, and 3. Portfolio Reports 2. Quantitative & 2. Portfolio
(4) Risks are monitored and controlled throughout the Manage Portfolio 4. Portfolio Process Qualitative Reports
Risk process. Assets Analysis 3. Portfolio Process
5. Organizational Assets Updates
Process Assets 4. Organizational
6. Enterprise Process Assets
Environmental Updates
Factors

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