According to the standards of portfolio management by PMI, “A portfolio is a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives”. Any organization has very well defined business goals and strategic objectives. The organizations devise strategies and create a vision for the members of the organization as a guideline to follow in order to fulfill the business goals and strategic objectives defined by the organization. The strategies and vision lay the foundation for quantifying a portfolio and the entities within a portfolio.
A portfolio on the organizational level may very well boil down to quantifiable items as projects & programs as it starts trickling down through the organization business units and into different driving teams. It is very important at this stage that all the different people involved with the subcategorization are aware of the vision and strategic goals of the organization, as well as the timeframes in which the goals should be met. Any deviation in the implementation of strategy at BU levels might either prolong or nullify the benefits being looked for by the organization.
The portfolio management needs to happen at the highest levels in the organization to make sure that no deviation from the established strategic goals happen. The focus of all the different programs within the portfolio is to realize the intended benefits, in the given time-frame to achieve the strategic objective of the organization. In traditional companies, most of the times, the organizational structure has an impact on the portfolio. The portfolio programs, market segments to target, introduction of new/updated products and/or services, etc. are quite deeply entrenched into the organization’s structure and capabilities. Most companies try to fit the portfolio into their existing infrastructure.
Ideally, the portfolio should be driving the organization structure and update the capabilities of the organization on a need basis. Digital transformation helps the organizations to decouple the portfolio from organization structure. Capability adjustment is done based on the project/program requirements according to the defined portfolio. Digital transformation gives more flexibility to portfolio managers to adjust the portfolio based on external factors and to align with a changing organization mission & vision if there is one.
The relationship between various components in the portfolio needs to be well-defined and maintained. Any addition or removal of components in a portfolio needs to be double-checked with regards to its relationship to other components so as have a minimal impact on other components and undergoing portfolio execution. Operations management, sponsors and stakeholders should be taken into confidence before any movement in the portfolio or subsidiary portfolio is done.
 – Project Management Institute (2018). The standard for portfolio management. Newtown Square, Pa: Project Management Institute, p.3.