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Where Governance and Portfolio Management Intersect: What You Need to Know
If you want to advance your project and career, you need to know how your project fits into the larger strategy and supports the business objectives of the organization. Understanding governance and portfolio management will help you align your project with the strategic goals of the organization. Governance is a set of practices that enable transparent executive decision-making. Governance establishes the overall direction and approval authority to execute projects. The scope of governance can be expansive to include operations, and budget, as well as projects. It also provides a forum for stakeholder input. From a project perspective, governance involves prioritizing, selecting and allocating the limited resources needed to accomplish strategic and organizational objectives.
Portfolio management is a process within the larger governance structure. Portfolio managers maintain the right inventory of projects to ensure that the work being done will achieve the organization’s objectives. Portfolio management operates within the confines and rules of engagement as determined by the governance committee. Governance is concerned with the lifecycle ownership of the products produced by the project. Portfolio management will disengage once the project stops. Two Functions and Types of Reviews As a project manager, you may be called on to review your project at either a governance review or a portfolio review. These reviews differ in purpose and outcome. The governance committee may request to review the status of your project. They want to know whether it is continuing to support the organizational strategy and if it merits continued investment. To satisfy the governance committee, be prepared to give a summary status of the project, any truly significant issues that may impede its progress, and an assessment of the overall risk to the organization. The portfolio review focuses on more tactical project considerations like detailed deliverable progress, issue review, performance measures and resource utilization. The portfolio manager will want to know whether the project resources are working at capacity, are overstretched or can accept more work. As the project manager, you must protect your resources from being pulled away too early. To satisfy the portfolio manager, be prepared to provide a detailed analysis of your status. You may want to organize your review around key topics like schedule, deliverables, resources, quality and issues. Include key metrics like schedule performance index or cost performance index. Governance and portfolio reviews are interconnected; each one feeds the other information. So executives in both arenas should receive from you the same overall message about your project. This will inspire confidence in your leadership ability. Looking to Get Ahead? Here’s What You Need to Know Your focus on the organization’s strategic direction is a competency that will support your qualifications to be promoted. The value of this competency for project managers is stressed in literature So take time to understand how your project meets the larger needs of the organization. Aim your project toward that horizon. Be prepared to build the larger vision and strategy into your plans and communications. Remind your project team frequently why this project matters. And looking beyond your project, be prepared to face your governance council or portfolio review committee. See the 23 January issue of Community Post for more on presenting to a project governance committee.
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Project managers frequently find themselves knee-deep into the details of their project. With reports to write, schedules to update and phone calls to make, it can be a challenge to raise your eyes above the horizon line long enough to understand your project’s strategic role in the organization. 
The topic for this article was 
PMI thanks Tim Jaques, PMP, for contributing this article. Mr. Jaques is a partner at | Home BACK TO TOP
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