Portfolio Management Knowledge Areas

Portfolio Management Knowledge Areas


5.2 Define Portfolio

The purpose of the Define Portfolio process is to create an up-to-date list of qualified portfolio components by identifying, categorizing, scoring, and ranking portfolio components. This process is required to produce an organized portfolio for ongoing evaluation, selection, and prioritization. This process ensures resources are or Will be working on portfolio components that Will provide the most significant value for the investment and are most strongly aligned to the organizational strategy and objectives. This process is closely aligned with the Optimize Portfolio process that optimizes the portfo1io with the balanced portfolio component mix as described in Section Optimize Portfolio.

Once identified, the list of existing and proposed portfolio components needs to be organized into relevant organization groups to which a common set of decision tilters and criteria may be applied for evaluation, selection, and prioritization. The portfolio components in a given group have a common goal and are measured on the same basis regardless of their origin in the organization. The categorization of the portfolio components allows the organization to balance its investment and its risks between all strategic categories and goals.

All pertinent information is gathered and summarized for each portfolio component of the portfolio. The information may be qualitative and quantitative and comes from a variety of sources across the organization.

The portfolio manager may revise the data several times until reaching the required level of completeness. By its definition, portfolio management selects only portfolio components that align with the organizational strategy and meet defined criteria. Without a successful evaluation and definition process, unnecessary or poorly planned portfolio components may be incorporated within the portfolio and increase the workload of the organization, thus hampering the benefits realized from truly important and strategically aligned portfolio components.

Key activities within this process include:

·         Identifying qualified portfolio components through the evaluation and assignment of key descriptors,

·         Categorizing portfolio components to which a common set of decision filters and criteria may be applied, and

·         Evaluating portfolio components with a ranking and scoring model comprising weighted key criteria.


.1 Portfolio strategic plan

.2 Portfolio charter

.3 Portfolio

.4 Portfolio roadmap

.5 Portfolio management plan

.6 Portfolio process assets


Tools & Techniques


.1 Portfolio component inventory

.2 Portfolio component categorization techniques

.3 Weighted ranking and scoring techniques



.1 Portfolio updates

.2 Portfolio roadmap updates

.3 Portfolio management plan updates