Sunday, August 20, 2023

Book Excerpt from 'I Want To Be A PfMP' – Understanding Portfolio Strategic Management

This article is an excerpt from the Book - I Want To Be A PfMP

It is from Chapter – 4: Portfolio Strategic Management. 

For the index of the book, refer: Book Index - I Want To Be A PfMP.


Strategic Management is a critical process group in Portfolio Management. As we have been seeing from the very beginning, it’s a portfolio which links the organization’s goals and strategy with the program components or project components. That’s one of the key characteristics of portfolio management.

For your PfMP exam too, you will have a large number of questions (25%) from this group or Strategic Alignment performance domain as mentioned in the ECO. The other one is Portfolio Performance domain (25%).

Portfolio Strategic Management includes three processes to develop these three key artifacts or deliverables:

  • Portfolio Strategic Plan (PfSP)
  • Portfolio Charter (PfC)
  • Portfolio Roadmap (PfRM)

It also ensures management of strategic changes. When a strategic change happens at the organizational level, with portfolio strategic management you ensure that the portfolio remains aligned with organizational strategy. 

Also, it’s possible that there will be changes in portfolio components such as programs, projects, and subportfolios. This also has to be managed so that these portfolio components and hence the portfolio remains aligned with strategy. Both changes to strategy and changes to the portfolio itself (due to change in portfolio components) are managed by another process in strategic management. 

The processes in this KA with the corresponding PG are noted in the below table.

4.1 Portfolio Strategic Management – What Happens?

Let’s take an overview of Strategic Management KA. 

  • First, in the process of “Develop Portfolio Strategic Plan” the “Portfolio Strategic Plan” (PfSP) is developed. To create this plan, mainly the inventory of work and organizational strategic goals and objectives act as inputs from the outside. This plan has portfolio-related strategic goals and objectives.

    In this process too, the “Portfolio” is first created. It’s a list of components such as projects, programs and operations, but without any hierarchy or organization.

  • Next, the PfSP acts as an input to “Develop Portfolio Charter”, to create the “Portfolio Charter”. The charter authorizes the Portfolio Manager to apply resources to portfolio components and execute the portfolio management processes. The charter provides the “Portfolio Structure”, which shows the hierarchy and organization of portfolio components.

  • Then the “Portfolio Charter” acts as an input to the “Define Portfolio Roadmap” process, where the “Portfolio Roadmap” is created. The roadmap chronologically depicts all portfolio elements. This is also a high-level schedule with a timeline for all portfolio components.
  • The final process of “Management Strategic Change” is an umbrella process, which sits on top and interacts with the previous three processes. When there are strategic changes in the organization, this process is activated and it results in changes to the PfSP, Portfolio, Portfolio Charter (which includes the Portfolio Structure), and the Portfolio Roadmap.

    Strategic change can also come due to change in portfolio components. The portfolio reports are reviewed in “Provide Portfolio Oversight” process by the governing body under Governance KA. If any strategic change, then this process of “Manage Strategic Change” is executed. This is shown with dotted lines in the below figure. This will result in updates to the PfSP, PfC and PfRM.

    This also results in updates to the Portfolio Management Plan (PfMP), which is created in “Develop Portfolio Management Plan” under Portfolio Governance KA. This is shown again with dotted lines

4.1.1 Portfolio Strategic Management – Graphical Process Interaction 

The interactions among the processes of Portfolio Strategic Management KA are shown in the below figure.

As shown, the inventory of work (an initial list of non-final and immature collection of components) and organizational strategy and objectives act as into to “Develop Portfolio Strategic Plan” process, which creates the Portfolio Strategic Plan (PfSP) as well as an initial list of components, now aligned with the strategy and objectives.

Next, the PfSP acts as an input to “Develop Portfolio Charter” process, which creates the Portfolio Charter (PfC). This charter is now input to the Develop Portfolio Roadmap” process, which creates the Portfolio Management Plan (PfMP). 

If any organizational strategy change happens (shown in the cloud), they will be managed with the “Manage Strategic Change” process. New strategic changes can also come due to updates coming from “Provide Portfolio Oversight” process, which has Portfolio Reports as input. 

Finally, to accommodate the strategic changes, the PfSP, PfC, PfRM, Portfolio as well as the PfMP will be updated in the “Manage Strategic Change” process.

. . . 

. . .

4.2 Strategic Management and PfMP Exam ECO 

Per the PfMP-ECO, this performance domain has activities for aligning portfolio components such as projects, programs, operations with the organizational strategic objectives, goals and priorities. It also recommends portfolio scenarios and related components to create an initial high-level roadmap. 

4.2.1 Strategic Management Process Mapping to ECO’s Domains and Tasks 

The PfMP exam is based on ECO and hence, the below table. This shows mapping of simplified tasks (statements) to the processes of this KA. 

. . . 

. . .


Going forward in the book, you will learn more on Portfolio Strategic Management, ECO Mapping, the processes in Portfolio Strategic Management along with the Inputs, Tools and Techniques (ITTOs) and top activities for each process. 

You will also learn in-depth about the Portfolio Strategic Plan and its contents, Portfolio Charter and its contents, Portfolio Roadmap and its content. You will also learn how Portfolio Roadmap is used with a hands-on MS Project-Portfolio Management software tool. These are covered in the following sections.

  • 4.3 Develop Portfolio Strategic Plan
  • 4.4 Develop Portfolio Charter
  • 4.5 Define Portfolio Roadmap
  • 4.6 Manage Strategic Change

Towards the end you will understand how strategic change management happens and the differences between Progressive Elaboration and Repeated Adaptation in new sections. Both progressive elaboration and repeated adaptation are used in Portfolio Management.

For price, access, and other details of this new PfMP book, you can refer to this page.

Book Available for PfMP Exam:

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