The Standard for Portfolio Management

The Standard for Portfolio Management

Section I
The Portfolio Management
Framework
Chapter 1 Introduction to Portfolio Management
Chapter 2 Portfolio Management Process and
Organization

Chapter 1
Introduction to Portfolio
Management
The Standard for Portfolio Management addresses a gap in the management-by-proj-

ects field across all types of organizations (i.e., profit, nonprofit, and government)—
that is, the need for a documented set of processes that represent generally recognized
good practices in the discipline of portfolio management. While project management
and program management have traditionally focused on ‘‘doing work right,’’ portfolio
management is concerned with ‘‘doing the right work.’’
The term ‘‘portfolio’’ has been in use for some time and is used throughout many
diverse organizations; therefore, the term has come to represent different meanings.
It is recognized that there are many types and varieties of portfolios; for example, in
the financial industry, a portfolio is a collection of investment instruments (stocks,
bonds, mutual funds, commodities, etc.). This standard does not attempt to address
those types of portfolios; further, there is no attempt to bridge this standard to those
other kinds of portfolios. For the purpose of this standard, the focus is on ‘‘project
portfolio’’ management. It will be referred to simply as ‘‘portfolio’’ management.
This chapter defines key terms associated with portfolio management and provides
an overview of the rest of The Standard for Portfolio Management in the following sec-

tions:
1.1 Purpose of The Standard for Portfolio Management
1.2 What is a Portfolio?
1.3 What is Portfolio Management?
1.4 The Link with Organizational Strategy
1.5 The Link between Portfolio Management and Organizational Governance
1.6 The Link between Portfolio Management and Operations Management
1.7 The Links between Portfolio Management and Program and Project Manage-

ment
1.8 Role of the Portfolio Manager
1.9 Portfolio Management Metrics
1.10 Portfolio Management Reporting

The Standard for Portfolio Management