Portfolio management includes the processes and activities associated with managing a portfolio of projects, programs, sub-portfolio's and other work. Portfolio management is distinctly different from project and program management, and it involves activities such as; strategy interpretation, trade-off analysis, scenario planning, portfolio balancing and benefits measurement and analysis.
The portfolio manager is responsible for managing a portfolio and reports to the portfolio sponsor. This role involves interacting with the component managers to ensure strategic alignment of the components. The portfolio manager is a member of the portfolio board and is the interface between the component managers and the portfolio board.
- The optimal combination of projects (through any one or a combination of decision-making models such as Weighted Factor Scoring, Analytical Hierarchy Process, Monte Carlo Simulation, Real Options, etc.);
- Whether the portfolio remains relevant, optimal, and balanced;
- Portfolio governance e.g., establishing policies & procedures, drafting through portfolio management plans and performing work accordingly, etc.
- Portfolio risk analysis (both qualitative and quantitative);