Practically every organization across every industry deals with projects. Of course, these projects vary considerably in terms of complexity, skills required for completion, and niche. As initiatives evolve, so does the need for varied and revolutionary approaches to project management.
Here, we’ll look at the key differences between project management vs project portfolio management, examples of when to use each approach, and why they often complement one another. By using both PM and PPM, you will set your business up for organizational success.
What Is Project Management?
You’re likely to find project management processes in most, if not all, industries. In a nutshell, project management involves organizing, planning, budgeting, allocating resources, and determining project scopes. Project managers are in charge of establishing project timelines, cataloging deliverables, and ensuring team members execute the initiative properly.
Think of creating a new website, launching a product, or carrying out a construction project. These all demand careful management and oversight. That’s why a PM is so critical. They are essentially the project owner.
Roles and Responsibilities of Project Managers
Project managers are responsible for the entire project. Their tasks include:
- Planning project objectives
- Managing resources and budgets
- Leading teams and dividing responsibilities
- Monitoring progress
- Mitigating risks
Their overarching goals are to ensure quality while delivering successful outcomes within scope, time, and budgetary constraints.
What Is Portfolio Management?
While both project management and portfolio management involve overseeing projects, the PPM process encompasses the strategic alignment of projects across all of the projects in a higher-level initiative, called a program or portfolio. That means prioritizing sub-projects and optimizing resources at a larger scale. This collection of smaller initiatives within a larger one is called a project portfolio.
You’ll see portfolio management in numerous industries. Consider enterprise-level decision-making or prioritizing IT investments at a large corporation; these are both examples of PPM.
Roles and Responsibilities of Portfolio Managers
Portfolio managers have similar responsibilities as project managers, but their larger aim is to account for all projects within a portfolio, not just discrete initiatives. To make this happen, they need to prioritize projects, align these projects with strategic goals, and manage risks at a portfolio level. Other responsibilities include:
- Optimizing resource allocation across projects
- Monitoring overall portfolio performance
- Providing insights for decision-making
A portfolio manager’s goal is to ensure that the portfolio delivers maximum value to the organization.
Key Differences Between Project Management and Portfolio Management
What are the main differences between portfolio management vs project management? At its most basic level, portfolio management is more comprehensive and larger-scale.
Both approaches involve project lifecycle management, but portfolio management concerns many projects that contribute to an ongoing initiative, while project management is the oversight and management of a discrete start-to-finish project. A project may roll up to a program or portfolio, or it may be related to a department’s work. For example, an IT department typically has a portfolio of projects.
This chart outlines the key differences between portfolio management and project management.
| Project Management | Portfolio Management | |
| Scope | Individual project focus | Organizational-wide focus |
| Goal | Delivering project outputs | Aligning projects with strategic goals |
| Metrics of Success | Meeting deliverables | Achieving ROI and strategic value |
| Decision-Making Process | Tactical | Strategic |
| Time Horizon | Short-term, project-specific timelines | Long-term, ongoing strategic oversight |
| Responsibility | Team coordination and task execution | Project prioritization and resource distribution |
| Risk Management | Focus on individual project risks | Evaluating and mitigating risks across the entire portfolio |
| Stakeholder Involvement | Direct interaction with project stakeholders | High-level engagement with executives and decision-makers |
| Tools and Techniques | Task-specific management tools | Strategic dashboards and portfolio-level resource and risk tools |
| Flexibility | Adaptation to changes within a single project | Balancing adjustments across multiple projects to align with shifting business priorities |
Portfolio Management vs Program Management vs Project Management
A third type of project management is program management. This is a middle ground between project management and portfolio management. Program management involves overseeing and coordinating a group of projects all related to the same initiative. In contrast, portfolio management doesn’t necessarily concern related projects.
How PM and PPM Complement Each Other
It’s not always a case of portfolio management vs project management. Organizations often demand both approaches to mitigate challenges in project management, ensure strategic project alignment, and deliver successful outcomes.
A Project Management Office (PMO) will oversee one or many project portfolios. The goal of this organization is to continually optimize project delivery to deliver greater value for the organization. As a PMO matures, the focus shifts from creating processes to establishing and improving those processes, improving benefits realization and positively impacting the organization as a whole.
Project managers and portfolio managers often work together. The portfolio manager focuses on the larger portfolio, prioritizing projects and overseeing the performance of all of the initiatives within the portfolio. The project manager, meanwhile, focuses exclusively on the project under their purview. The process involves careful collaboration, with both professionals checking in with and reporting to one another regularly.
Benefits of Portfolio Management Over Project Management Alone
Companies ranging from Johnson & Johnson to Deloitte use project portfolio management vs simple project management. Why?
Strategic Prioritization of Initiatives
When you’re taking a portfolio view of your business vs. a project view, you’re better equipped to prioritize various initiatives and, with the help of project data, determine which projects deserve the most attention.
Improved Resource Utilization
Project portfolio management allows your business to better control resource allocation, from budgets to staff and tools needed. You will also be able to forecast future resource demands necessary to achieve your organizational goals.
Enhanced Risk Management at the Portfolio Level
Proactively identify risks associated with your portfolio and discrete projects to develop strategies to mitigate and address these potential issues. This is especially important for regulated industries and enterprises, such as healthcare and public utilities.
Better Decision-Making with Comprehensive Insights
With the data you’ve generated and analyzed, you can make better decisions. Data-backed decisions tend to be better ones. With thorough tracking and reporting, you’ll understand your successes and challenges and be better informed for the future.
Tools and Techniques for Effective PM and PPM
To choose the right project management and portfolio management tools for your organization, follow these steps.
- Take stock of your goals.
What do you hope to achieve with these technologies? What systems do you already have in place? These questions will guide your decision-making.
- Research solutions.
Determine how these tools will complement your current processes and systems. Ensure that they are scalable and will grow with your business. Consider additional factors such as security, ease of use, and customer testimonials.
- Choose the best fit for your organization.
Bear in mind that the best fit isn’t necessarily the cheapest option. You need a solution that provides extensive support, fits in with your existing infrastructure, offers the features that align with your objectives, and is cost-effective.
- Integrate the software with your existing tools.
Your solution should be easy to integrate with systems like ERPs. Some providers will assist you with ensuring that your PPM and PM tools connect seamlessly with your other enterprise technologies.
Real-World Applications
Industries ranging from healthcare and finance to IT and manufacturing demand project portfolio management.
For example, healthcare organizations must integrate many delivery systems to share data and ensure better service delivery. A PPM solution helps these organizations manage high volumes of projects simultaneously, allowing them to prioritize, leverage information effectively, and create a sustainable framework and pipeline for overseeing portfolio projects.
We saw this type of scenario firsthand with Intek Plastics. Previously, pre-merger, the organization had relied heavily on Excel spreadsheets. This process introduced challenges that slowed integration and delayed ROI, creating multiple inefficiencies and limiting visibility into project progress.
By implementing Prism PPM, Intek gained enhanced visibility into project status across integration workstreams, achieved better cross-functional collaboration, standardized integration management, and developed clear, customizable workflows. The organization can also prioritize more effectively and efficiently across teams and has a “living document” environment so that updates are immediately available to stakeholders
Transitioning from Project Management to Portfolio Management
When should you transition to a PPM solution?
If your business has many interdependent projects and requires strategic alignment of multiple initiatives, project portfolio management is the answer. Portfolio management equips teams with the frameworks and technologies to optimize resources, gain data-driven insights, and prioritize effectively. It allows your organization to coordinate across projects and personnel and achieve your larger business goals.
Transitioning from project management to portfolio management involves:
- Defining business goals.
- Brainstorming and ideating across departments.
- Choosing the projects for the portfolio.
- Attaining buy-in from all team members and stakeholders.
These steps are ongoing. Transitioning from discrete project management to portfolio management requires building a culture that supports both and integrates processes.
How Prism PPM Simplifies PM and PPM
York University, Canada’s third-largest university, manages a portfolio of 90 to 150 IT projects at a given time. Before the university adopted Prism PPM (then WorkOtter), York frequently wasted time and resources aggregating data and manual reporting.
York needed a solution for quickly and easily aggregating project data, managing resource planning, and providing an appropriate structure to support project governance. The university selected our model. Ramon Kagan, Director of Operational Excellence and Institutional Applications, York University, called the solution a “force multiplier. It aids my ability to execute without consuming all my time.”
Prism PPM offers features tailored for project management and portfolio management, including:
- Visual workflows for project planning—allowing you to map your entire project lifecycle—and customizable templates.
- Strategy mapping and roadmaps to gain real-time insights, anticipate and avoid bottlenecks, and drive complex strategic initiatives.
- Resource management tools to enable you to assess the impact of various resourcing scenarios before implementing them.
- A global calendar, time tracking, and budgeting tools for measuring value and realizing benefits over time.
- Dynamic dashboards that provide real-time information and customized, scalable reports.
Ultimately, Prism PPM allows you to facilitate strategic alignment, gain real-time insights, and optimize resources for successful outcomes.
Conclusion
Project management and portfolio management are both critical for the success of your enterprise. If you work in a high-stakes, data-driven environment that has many moving parts at a given time, you can’t rely on managing individual projects alone; you need a larger-scale, high-level system to improve efficiency, understand risks, and achieve your larger organizational goals.
Prism PPM provides a comprehensive platform for optimizing your projects and resources, enhancing your PPM process, and improving project performance. Get started with Prism PPM.