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Business or organizational strategy is intended to drive all decisions within an organization.  It provides a direction, a rallying point, and a litmus test for decisions at all levels.  Hence, it only stands to reason that strategy would drive the project portfolio management process.

"The Standard for Portfolio Management" published by the Project Management Institute (PMI) states that in order to be successful, the portfolio management team must:

1. Understand the organization’s strategic plan.
2. Establish determining factors for managing the portfolio based on the strategic plan.
3. Consider all of the organization’s projects, programs, and other portfolio components.
4. Follow agreed-upon processes

Project managers develop plans to execute the projects in the portfolio, and then lead the effort to implement the plan.  Likewise, program managers develop plans for their programs, but it is a little different.  Program managers oversee a higher level entity that contains many projects.  They “own” the program, whereas the project managers “own” the project.

It naturally follows that portfolio managers “own” their respective project portfolios, so what is it that MUST tie the portfolio managers, program managers, and project managers together?  I believe the clear answer is strategy.  Strategy needs to be the overall guidance over and common thread through the project portfolio, programs, and projects.

Maintaining that tie is a challenge unto itself, and it is important to devise feedback processes to ensure that everyone is aligned with strategy.  Each area needs to develop a set of metrics that maps back to the stated strategic initiatives of the organization.  Given the relationships among the project portfolio management team, project teams, and program management teams, communication and collaboration processes need to be established among the three.
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John Reiling, PMP
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