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1 - INTRODUCTION

Portfolio management refers to the centralized management of one or more portfolios to achieve strategic
objectives. Portfolio management focuses on ensuring that projects and programs are reviewed to prioritize
resource allocation, and that the management of the portfolio is consistent with and aligned to organizational
strategies.

1.4.3 Projects and Strategic Planning

Projects are often utilized as a means of directly or indirectly achieving objectives within an organization’s
strategic plan. Projects are typically authorized as a result of one or more of the following strategic considerations:

• Market demand (e.g., a car company authorizing a project to build more fuel-efficient cars in response
to gasoline shortages);

• Strategic opportunity/business need (e.g., a training company authorizing a project to create a new
course to increase its revenues);
• Social need (e.g., a nongovernmental organization in a developing country authorizing a project to provide
potable water systems, latrines, and sanitation education to communities suffering from high rates of
infectious diseases);
• Environmental consideration (e.g., a public company authorizing a project to create a new service for
electric car sharing to reduce pollution);
• Customer request (e.g., an electric utility authorizing a project to build a new substation to serve a new
industrial park);

• Technological advance (e.g., an electronics firm authorizing a new project to develop a faster, cheaper, and
smaller laptop based on advances in computer memory and electronics technology); and
• Legal requirement (e.g., a chemical manufacturer authorizing a project to establish guidelines for proper
handling of a new toxic material).

1.4.4 Project Management office

A project management office (PMO) is a management structure that standardizes the project-related governance
processes and facilitates the sharing of resources, methodologies, tools, and techniques. The responsibilities of a
PMO can range from providing project management support functions to actually being responsible for the direct
management of one or more projects.

There are several types of PMO structures in organizations, each varying in the degree of control and influence
they have on projects within the organization, such as:

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