Project portfolio management (PPM) is a tool-supported process for analyzing and managing the project portfolio with the goal of maximizing total value, while accounting for risk and the organization's willingness to accept risk. PPM applies logic, reasoniing, and objectivity to portfolio decisions. The concepts and techniques are similar to those used by financial managers to optimize investment portfolios. The main focus of PPM is determining which projects to accept, postpone, reject and kill.
Benefits include cost savings; performance gains; better project information and risk management; more accountability; more consistent, efficient and transparent decision-making processes; reduced politics; and increased stakeholder confidence.
The motivation for PPM is evidence that the common approach used by organizations to select projects leads to sub-optimal project portfolios. Most organizations make project decisions based on a formal or informal assessment of whether each project passes some hurdle of acceptability. Many projects pass the hurdle, so resources become highly constrained. This leads to project delays, poor coordination, inadequate information, and unsound choices, which cause the organization to spend more, accept more risk, and obtain less value than would otherwise be possible. PPM addresses these problems by shifting the focus from individual projects to the project portfolio, and by providing processes and tools for optimizing portfolio decisions.
More information is provided throughout this website. For the most detail, see the paper Choosing the Wrong Portfolio of Projects.