Project portfolio management (PPM): Strategic control for sustainable project success
In today’s dynamic business world, you have numerous projects running simultaneously, while time, budget and personnel are limited. Without a clear strategy, you risk wasting resources, incurring delays and missing objectives. With project portfolio management (PPM), you can maintain central control, prioritisation and monitoring of all projects so that they contribute optimally to your strategic business goals. This allows you to minimise risks, use resources efficiently and increase your Return on Investment (ROI) in the long term.
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What is a project portfolio?
A project portfolio comprises all of an organisation’s projects and programmes that are viewed, planned, and managed collectively. Unlike programmes, projects do not necessarily pursue a common goal in terms of content and may even compete with each other. This makes PPM particularly challenging: it involves the continuous planning, prioritisation, management, and control of all projects across all time horizons.
Standards such as ISO 21504, DIN 69909, PRINCE2, IPMA ICB 4.0 and the PMBOK Guide define a portfolio in slightly different ways, but they all emphasise the same core concept: project portfolios serve to strategically align projects with long-term goals and make optimal use of resources.
Standards such as ISO 21504, DIN 69909, PRINCE2, IPMA ICB 4.0 and the PMBOK Guide define a portfolio in slightly different ways, but they all emphasise the same core concept: project portfolios serve to strategically align projects with long-term goals and make optimal use of resources.
What is project portfolio management?
Project portfolio management (PPM) refers to the central planning, control, and monitoring of all projects within a company. Unlike operational project management, which implements individual projects, PPM focuses on the overarching dimension: selecting projects with the greatest strategic benefit and ensuring that they are implemented efficiently with limited resources. Its core tasks include analysing and evaluating all projects, prioritising them according to their strategic contribution, selecting and prioritising projects, managing resources, controlling risks, and continuously optimising the portfolio.
The differences between project management, programme management, and multi-project management (MPM) become clear when they are compared. Project management focuses on individual projects, programme management coordinates several related projects, and MPM manages parallel projects to balance resources and avoid conflicts. PPM considers projects and programmes as a whole, evaluating their strategic contribution and continuously managing the portfolio to ensure all projects optimally contribute to long-term corporate goals. PPM, therefore, acts as a bridge between strategy and operational implementation.
Since 2008, with the publication of the PMI's ‘Standard for Portfolio Management’, the term project portfolio management has become established and has replaced the term ‘strategic multi-project management’ in German-speaking countries. The topic has been anchored in the German standard DIN 69909 since 2013. The standard describes the fundamentals, processes, methods and roles that help organisations successfully manage their project portfolio.
The differences between project management, programme management, and multi-project management (MPM) become clear when they are compared. Project management focuses on individual projects, programme management coordinates several related projects, and MPM manages parallel projects to balance resources and avoid conflicts. PPM considers projects and programmes as a whole, evaluating their strategic contribution and continuously managing the portfolio to ensure all projects optimally contribute to long-term corporate goals. PPM, therefore, acts as a bridge between strategy and operational implementation.
Since 2008, with the publication of the PMI's ‘Standard for Portfolio Management’, the term project portfolio management has become established and has replaced the term ‘strategic multi-project management’ in German-speaking countries. The topic has been anchored in the German standard DIN 69909 since 2013. The standard describes the fundamentals, processes, methods and roles that help organisations successfully manage their project portfolio.
Infographik PPM
The graphic shows four separate management levels. Individual work packages are shown at the lowest level of work package management. One level above shows the domain of project management with three projects composed of work packages. Two of these projects are bundled at the next level into the IT programme (IT-PRG-01), which is assigned to programme management. At the top level is project portfolio management, which encompasses both the IT programme and the remaining individual project. In the portfolio, the elements are additionally classified in a project portfolio matrix according to their value contribution and strategic benefit.
What are the advantages of project portfolio management?
Organisations that consistently use PPM report five key effects:
Project portfolio management increases the transparency, control, and success rate of your projects. By continuously monitoring your entire portfolio, you can react flexibly to changes, allocate budgets in a targeted manner, and improve overall performance in the long term. Your goal: to maximise the value of all your project investments.
Who benefits most from PPM:
- Targeted project selection: Projects are evaluated according to strategic benefit, risk, ROI, and degree of innovation. Only projects that make the greatest contribution to the organisation’s goals are implemented, resources are used efficiently and waste is avoided.
- Minimisation of risks: PPM considers risks across the entire portfolio. This enables problematic projects to be identified early on, bottlenecks to be avoided, and decisions to be made on the basis of current data, thereby ensuring greater stability and reliability in project operations.
- Transparent communication: All participants receive a clear overview of projects, dependencies and priorities. This facilitates collaboration between teams, departments and management and breaking down information silos.
- Efficient resource management: Budget, personnel and time are used optimally. Bottlenecks become visible early on, overloads are avoided, and project implementations can be planned. This also increases employee satisfaction.
- Strategic benefits and ROI: Targeted management ensures that capital flows into the projects with the greatest benefits. Projects contribute directly to the implementation of the corporate strategy, ensuring long-term success.
Project portfolio management increases the transparency, control, and success rate of your projects. By continuously monitoring your entire portfolio, you can react flexibly to changes, allocate budgets in a targeted manner, and improve overall performance in the long term. Your goal: to maximise the value of all your project investments.
Who benefits most from PPM:
- Large organisations with a high volume of projects, such as in the IT, automotive or mechanical engineering industries, which manage internal development projects, customer projects, and strategic initiatives simultaneously.
- Medium-sized organisations in growth phases that are entering new markets, developing products, or implementing several customer projects in parallel.
- Organisations with limited resources that need to make optimal use of scarce staff capacities, budgets, or production resources.
- Companies with a strategic need for change and high investment pressure, for example in digitisation, innovation, or sustainability projects.
- Public institutions, non-profit organisations, or research institutions that want to make more efficient use of public funds or research budgets.
What does a portfolio manager do?
The portfolio manager is the strategic guide for an organisation’s entire project landscape. Their main task is to strike the right balance between projects and programmes, ensuring that available resources are used in the best possible way. In doing so, they not only decide which projects are implemented, but also when and with what resources, always ensuring alignment with the corporate strategy.
Analytical thinking, confidence with numbers, and a deep understanding of strategy and organisation are essential for this role. Equally important are strong communication skills and the ability to persuade at all levels – from project teams to senior management. Portfolio managers need experience in project or programme management, supplemented by knowledge of financial planning, risk management, and the use of modern PPM tools.
Suitable candidates are often experienced project or programme managers, PMO heads, or executives with a strategic vision who can bridge the gap between operational project work and long-term corporate goals.
Analytical thinking, confidence with numbers, and a deep understanding of strategy and organisation are essential for this role. Equally important are strong communication skills and the ability to persuade at all levels – from project teams to senior management. Portfolio managers need experience in project or programme management, supplemented by knowledge of financial planning, risk management, and the use of modern PPM tools.
Suitable candidates are often experienced project or programme managers, PMO heads, or executives with a strategic vision who can bridge the gap between operational project work and long-term corporate goals.
PPM strategy in seven steps
Project portfolio management only achieves its full potential if you approach it systematically. Many organisations have found that a clearly structured process is the key to creating transparency, setting priorities, and sustainably increasing the benefits of your project landscape.
1. Project check
Not every task should be managed as a project; some projects can be handled more efficiently in line processes. The project check helps you identify which projects belong in the portfolio and how they should be classified as small, normal, or large projects. Criteria such as complexity, resource requirements, duration, strategic relevance, and external impact provide guidance.
2. Project initiation
New ideas and proposals are the raw materials of your portfolio. Record and evaluate them systematically using a standardised procedure: a clear approval process with defined workflows, roles, and evaluation criteria ensures that only well-prepared projects reach the decision stage. This ensures the quality and comparability of your proposals.
3. Prioritisation
Resources are always limited. That’s why you need to weigh projects against each other. Prioritise according to strategic importance: Does the project drive innovation, reduce costs, increase customer satisfaction, or open up new markets? You can also take financial indicators such as ROI, net present value or internal rate of return into account. It’s important to review priorities regularly and adjust them if conditions change.
4. Recording ongoing projects
Don’t just focus on new ideas, but also on existing projects. Record and evaluate ongoing projects using the same criteria as for new proposals. This will help you identify where resources are tied up in less relevant projects and make room for more important initiatives.
5. Rough planning
Once you have identified the relevant projects, the next step is rough planning. Take into account available budgets, capacities, and remaining resources to determine the optimal start date for new projects. This will prevent projects from running into the ground and ensure a realistic, coordinated roadmap.
6. Controlling
Monitor your portfolio continuously. You can only identify and control deviations in good time if you have up-to-date data on costs, time, and resources. Regular portfolio meetings create transparency and enable quick decisions. Changes in corporate strategy must be immediately incorporated into the evaluation of your projects.
7. Project completion evaluation
Close projects consciously. A target/actual comparison of costs, benefits, and results shows you whether the goals have been achieved. Document lessons learned: This will secure experience for future projects and strengthen the learning culture in your organisation.
1. Project check
Not every task should be managed as a project; some projects can be handled more efficiently in line processes. The project check helps you identify which projects belong in the portfolio and how they should be classified as small, normal, or large projects. Criteria such as complexity, resource requirements, duration, strategic relevance, and external impact provide guidance.
2. Project initiation
New ideas and proposals are the raw materials of your portfolio. Record and evaluate them systematically using a standardised procedure: a clear approval process with defined workflows, roles, and evaluation criteria ensures that only well-prepared projects reach the decision stage. This ensures the quality and comparability of your proposals.
3. Prioritisation
Resources are always limited. That’s why you need to weigh projects against each other. Prioritise according to strategic importance: Does the project drive innovation, reduce costs, increase customer satisfaction, or open up new markets? You can also take financial indicators such as ROI, net present value or internal rate of return into account. It’s important to review priorities regularly and adjust them if conditions change.
4. Recording ongoing projects
Don’t just focus on new ideas, but also on existing projects. Record and evaluate ongoing projects using the same criteria as for new proposals. This will help you identify where resources are tied up in less relevant projects and make room for more important initiatives.
5. Rough planning
Once you have identified the relevant projects, the next step is rough planning. Take into account available budgets, capacities, and remaining resources to determine the optimal start date for new projects. This will prevent projects from running into the ground and ensure a realistic, coordinated roadmap.
6. Controlling
Monitor your portfolio continuously. You can only identify and control deviations in good time if you have up-to-date data on costs, time, and resources. Regular portfolio meetings create transparency and enable quick decisions. Changes in corporate strategy must be immediately incorporated into the evaluation of your projects.
7. Project completion evaluation
Close projects consciously. A target/actual comparison of costs, benefits, and results shows you whether the goals have been achieved. Document lessons learned: This will secure experience for future projects and strengthen the learning culture in your organisation.
How are projects selected and prioritised in PPM?
A key lever for the success of your project portfolio management is the correct selection and prioritisation of your projects. Not every project deserves the same place in the portfolio; the decisive factor is which projects make the greatest contribution to your corporate goals. The Project Management Institute (PMI) describes a five-step process that provides guidance for this:
1. Inventory
Create transparency: Record all current and planned projects, including budgets, schedules, resources, and previous priorities. This overview forms the basis for informed decisions and enables you to identify redundancies, bottlenecks, or strategically important projects.
2. Analysis
Define benchmarks for project success and examine your projects according to fixed criteria such as time and cost schedules, resource utilisation, or classification according to business areas and strategic goals. Official standards such as ISO 21504 or DIN 69909 do not specify mandatory methods. You select the appropriate methods depending on your strategy, business environment, and project characteristics, e.g.:
3. Classification and weighting
Sort your projects according to value contribution and strategic benefit. This can include both hard criteria such as ROI, EVA, or cost-benefit analyses and soft criteria such as degree of innovation, strategic relevance, or customer benefit. The result is a clearly prioritised ranking that serves as a basis for decision-making in portfolio control.
4. Alignment of the project portfolio
Coordinate your projects: eliminate duplications or contradictions, reduce risks, plan resources roughly, and take dependencies into account. The goal is a coherent overall portfolio that optimally reflects both the individual projects and their interaction while supporting your strategic corporate alignment.
5. Implementation
Implement your portfolio decisions: schedule projects, adjust budgets, or discontinue projects if necessary. By using suitable methods and tools such as Stage-Gate, EVA or agile portfolio management, you can ensure that your resources are used optimally and that the portfolio makes the maximum contribution to your corporate strategy.
1. Inventory
Create transparency: Record all current and planned projects, including budgets, schedules, resources, and previous priorities. This overview forms the basis for informed decisions and enables you to identify redundancies, bottlenecks, or strategically important projects.
2. Analysis
Define benchmarks for project success and examine your projects according to fixed criteria such as time and cost schedules, resource utilisation, or classification according to business areas and strategic goals. Official standards such as ISO 21504 or DIN 69909 do not specify mandatory methods. You select the appropriate methods depending on your strategy, business environment, and project characteristics, e.g.:
- Balanced scorecard: Holistic view of finances, customers, processes, learning, and growth to align projects with strategic KPIs.
- Kano model: Evaluation of projects according to their potential impact on customer satisfaction.
- Value-based management (VBM): Focus on the project’s contribution to increasing the value of the company.
- Earned Value Analysis (EVA): Project progress, costs, and performance are monitored quantitatively; particularly useful because it links time and cost plans with actual project progress.
- Stage-Gate Model: Division of complex projects into phases with decision stages, making it particularly suitable for innovation or product development projects.
- Agile PPM: Flexible adjustment of priorities and resources in dynamic environments.
3. Classification and weighting
Sort your projects according to value contribution and strategic benefit. This can include both hard criteria such as ROI, EVA, or cost-benefit analyses and soft criteria such as degree of innovation, strategic relevance, or customer benefit. The result is a clearly prioritised ranking that serves as a basis for decision-making in portfolio control.
4. Alignment of the project portfolio
Coordinate your projects: eliminate duplications or contradictions, reduce risks, plan resources roughly, and take dependencies into account. The goal is a coherent overall portfolio that optimally reflects both the individual projects and their interaction while supporting your strategic corporate alignment.
5. Implementation
Implement your portfolio decisions: schedule projects, adjust budgets, or discontinue projects if necessary. By using suitable methods and tools such as Stage-Gate, EVA or agile portfolio management, you can ensure that your resources are used optimally and that the portfolio makes the maximum contribution to your corporate strategy.
How do you implement project portfolio management in organisations?
The introduction of project portfolio management (PPM) in accordance with ISO 21504 is not something you can do ‘on the side’. Rather, it represents a change project in its own right, requiring clear structure, strategic orientation, and continuous adaptation.
Challenges may arise during implementation, such as resistance from your employees, lack of acceptance, or ensuring data quality and consistency. Successful PPM, therefore, requires not only technical know-how, but also change management skills and consistent anchoring in your organisation.
A proven approach comprises six key steps:
1. Definition of strategic goals
Determine which corporate goals your project portfolio management should support. Only when the strategic direction is clear can you select and prioritise projects in a meaningful way.
2. Selection and implementation of PPM tools
Choosing the right software is crucial for effective project portfolio management. The ideal solution is one that brings together all relevant data from project management, multi-project management, programme management, resource management, and controlling. This allows you to plan, monitor, and analyse projects centrally without having to manually compile data from different systems. The software should integrate seamlessly into your existing IT landscape, update data reliably, and provide consistent transparency on budgets, capacities, priorities, and dependencies. An integrated tool forms the basis for making fact-based decisions, identifying bottlenecks early on and consistently implementing strategic goals.
3. Defining processes and standards
Define clear processes and standards so that projects can be evaluated and prioritised according to uniform criteria. This includes evaluation methods, decision-making processes, and responsibilities that ensure the strategic alignment of your portfolio.
4. Training and integrating employees
A new PPM system will only succeed if your stakeholders understand and accept it. Training and clear communication promote the use of the tools, increase acceptance, and ensure a smooth transition to new ways of working.
5. Adjustments
After implementation, projects, budgets, and resources may need to be rescheduled or reallocated. Adjustments ensure that your portfolio remains realistic and that the set goals are achieved.
6. Continuous monitoring and optimisation
Project portfolio management is a dynamic process. With regular monitoring, feedback loops, and lessons learned, you can achieve continuous improvement and ensure the long-term effectiveness of your system.
Challenges may arise during implementation, such as resistance from your employees, lack of acceptance, or ensuring data quality and consistency. Successful PPM, therefore, requires not only technical know-how, but also change management skills and consistent anchoring in your organisation.
A proven approach comprises six key steps:
1. Definition of strategic goals
Determine which corporate goals your project portfolio management should support. Only when the strategic direction is clear can you select and prioritise projects in a meaningful way.
2. Selection and implementation of PPM tools
Choosing the right software is crucial for effective project portfolio management. The ideal solution is one that brings together all relevant data from project management, multi-project management, programme management, resource management, and controlling. This allows you to plan, monitor, and analyse projects centrally without having to manually compile data from different systems. The software should integrate seamlessly into your existing IT landscape, update data reliably, and provide consistent transparency on budgets, capacities, priorities, and dependencies. An integrated tool forms the basis for making fact-based decisions, identifying bottlenecks early on and consistently implementing strategic goals.
3. Defining processes and standards
Define clear processes and standards so that projects can be evaluated and prioritised according to uniform criteria. This includes evaluation methods, decision-making processes, and responsibilities that ensure the strategic alignment of your portfolio.
4. Training and integrating employees
A new PPM system will only succeed if your stakeholders understand and accept it. Training and clear communication promote the use of the tools, increase acceptance, and ensure a smooth transition to new ways of working.
5. Adjustments
After implementation, projects, budgets, and resources may need to be rescheduled or reallocated. Adjustments ensure that your portfolio remains realistic and that the set goals are achieved.
6. Continuous monitoring and optimisation
Project portfolio management is a dynamic process. With regular monitoring, feedback loops, and lessons learned, you can achieve continuous improvement and ensure the long-term effectiveness of your system.
Why software is essential for project portfolio management
Project portfolio management is complex in practice. You need to keep track of all projects and programmes at the same time, coordinate resources, monitor budgets, and manage strategic priorities. Without a centralised software solution, it becomes nearly impossible to keep the necessary key figures for ongoing projects up to date. Decisions would be based on incomplete or outdated data, and managing your portfolio would quickly become confusing, error-prone, and time-consuming.
Modern PPM tools bundle all your data in one central location, update it in real time, and visualise dependencies, priorities, and resource availability. This allows you to compare projects, store budgets, and expenses, and identify deviations immediately. Portfolio diagrams are particularly helpful, as they show you the strategic importance of individual projects at a glance, highlight bottlenecks, and make coordination across all levels much easier.
Modern PPM tools bundle all your data in one central location, update it in real time, and visualise dependencies, priorities, and resource availability. This allows you to compare projects, store budgets, and expenses, and identify deviations immediately. Portfolio diagrams are particularly helpful, as they show you the strategic importance of individual projects at a glance, highlight bottlenecks, and make coordination across all levels much easier.
Portfolio diagram in Projektron BCS: Overview of projects, priorities, and resources in the portfolio.
The portfolio diagram in Projektron BCS visualises all projects in a portfolio, showing their strategic importance, status, budget, and resource consumption. Colour coding and graphical representations provide quick insights into priorities, bottlenecks, and risks, and support portfolio managers in decision-making and planning.
With flexible, practical software such as Projektron BCS, you can structure your projects according to strategic relevance, budgets, and effort, identify bottlenecks early on and plan resources efficiently. Your controlling becomes much more action-oriented, and you make decisions based on data and in a transparent manner. Project portfolio management software is not just a nice-to-have for you – it forms the basis for truly controlling your project portfolio, setting priorities, and ensuring the strategic benefits of all projects.
Conclusion: Project portfolio management – the bridge between project management and corporate strategy
Project portfolio management (PPM) connects operational project work with your strategic corporate planning, ensuring that all your projects are in line with your overarching goals. This allows you to optimise resource allocation, reduce risks, and manage your entire portfolio transparently so that your projects contribute to the long-term success of your company.
By consistently establishing PPM and using suitable software, you gain transparency, a sound basis for decision-making, and increase the success rate of your projects. PPM thus becomes a decisive strategic success factor for you, increasing your Return on Investment and making your organisation future-oriented and competitive.
By consistently establishing PPM and using suitable software, you gain transparency, a sound basis for decision-making, and increase the success rate of your projects. PPM thus becomes a decisive strategic success factor for you, increasing your Return on Investment and making your organisation future-oriented and competitive.
Author: Kai Sulkowski is an editor and in-house SEO at Projektron GmbH in Berlin. As a certified project management expert (IPMA), he has many years of experience in analysing and preparing complex technical content. In his articles, he imparts in-depth knowledge of best practices, methods, and trends in project management – always with the aim of providing practical content that supports companies in efficient project management, true to Projektron’s mission: “We map complex projects simply, automate business processes and strengthen project teams with intuitive software.” Like all departments at Projektron, the marketing team also uses its own project management software, Projektron BCS, to make optimal use of resources, prioritise projects sensibly and implement them successfully.
Keywords: Project management, Project portfolio management