The Need for an Effective Project Portfolio Management System

Implementation of projects without a strong priority system linked to strategy creates problems. Three of the most obvious project portfolio management problems are discussed below. A project portfolio management system can go a long way to reduce, or even eliminate, the impact.

Portfolio Management key questions

  • How can the implementation gap be narrowed so that understanding and consensus of organizational strategies run through all levels of management?
  • How can power politics be minimized?
  • Can a process be developed in which projects are consistently prioritized to support organizational strategies?
  • Can the prioritized projects be used to allocate scarce organizational resources—for example, people, equipment?
  • Can the process encourage bottom-up initiation of projects that support clear organizational targets?

All relevant questions.

Every organization has to find an answer for each and every one of these questions, and tailor that appropriately to their particularities.

Let’s take a look at them one at a time.

  1. The Implementation Gap
  2. Organization Politics
  3. Resource Conflicts and Multitasking


What is needed for a successful portfolio management system is a set of integrative criteria and a process for evaluating and selecting projects that support higher-level strategies and objectives. A single-project priority system that ranks projects by their contribution to the strategic plan would make life easier. Easily said, but difficult to accomplish in practice.

Organizations that managed independent projects and allocated resources ad-hoc have shifted focus to selecting the right portfolio of projects to achieve their strategic objectives. This is a quickening trend. The advantages of successful project portfolio management systems are becoming well recognized in project-driven organizations.

List of a few key benefits; the list could easily be extended.

  • Builds discipline into project selection process.
  • Links project selection to strategic metrics.
  • Prioritizes project proposals across a common set of criteria, rather than on politics or emotion.
  • Allocates resources to projects that align with strategic direction.
  • Balances risk across all projects.
  • Justifies killing projects that do not support organization strategy.
  • Improves communication and supports agreement on project goals.

Image courtesy of Freepik

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