1 Scope

2 Normative references

3 Terms and definitions

4 Principles of portfolio management

4.1 Context and need for portfolio management

4.2 Overview of portfolio management

4.2.1 Portfolio management

4.2.2 Portfolio structure

4.2.3 Capabilities and constraints

4.2.4 Opportunities and threats

4.3 Roles and responsibilities

4.3.1 General principles

4.3.2 Defining decision rights for portfolio content

4.4 Stakeholder engagement and management

5 Prerequisites for portfolio management

5.1 Overview

5.2 Justification for portfolio management

5.3 Portfolio management framework

5.4 Types of portfolio components

5.5 Criteria for selecting and prioritizing portfolio components

5.6 Alignment with organizational processes and systems

5.7 Visibility of the portfolio

5.8 Portfolio performance reporting structure

5.9 Improving portfolio management

5.10 Governance of portfolios

6 Managing portfolios

6.1 Overview

6.2 Defining the portfolio objectives

6.3 Identifying potential portfolio components

6.4 Defining the portfolio plan

6.5 Assessing and selecting portfolio components

6.5.1 Overview

6.5.2 Assessing current state

6.5.3 Selecting portfolio components

6.6 Validating portfolio alignment to strategic objectives

6.6.1 Overview

6.6.2 Alignment with the strategic objectives of the organization

6.6.3 Maintaining alignment with risk tolerance and resource capacity and capability

6.6.4 Documenting and evaluating results of alignment actions

6.7 Evaluating and reporting the performance of the portfolio

6.7.1 Overview

6.7.2 Establishing the performance measurement baseline of the portfolio

6.7.3 Managing portfolio performance

6.7.4 Reporting the performance of the portfolio

6.7.5 Managing the integration of benefits

6.8 Balancing and optimizing the portfolio

6.8.1 Overview

6.8.2 Optimizing portfolio components

6.8.3 Maintaining the portfolio

6.8.4 Optimizing resources

6.8.5 Managing portfolio risks

6.8.6 Controlling changes to the portfolio

Bibliography

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ISO 21504:2022(en)

	International Standard ISO 21504
Project, programme and portfolio management — Guidance on portfolio management Management de projets, programmes et portefeuilles — Recommandations sur le management de portefeuilles Reference number ISO 21504:2022(en)	Second edition 2022-02 © ISO 2022

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ISO 21504:2022(en)

All rights reserved. Unless otherwise specified, or required in the context of its implementation, no part of this publication may be reproduced or utilized otherwise in any form or by any means, electronic or mechanical, including photocopying, or posting on the internet or an intranet, without prior written permission. Permission can be requested from either ISO at the address below or ISO’s member body in the country of the requester.

ISO copyright office

CP 401 • Ch. de Blandonnet 8

CH-1214 Vernier, Geneva

Tel. + 41 22 749 01 11

E-mail copyright@iso.org

Website www.iso.org

Published in Switzerland

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ContentsPage

Foreword

Introduction

1 Scope

2 Normative references

3 Terms and definitions

4 Principles of portfolio management

4.1 Context and need for portfolio management

4.2 Overview of portfolio management

4.2.1 Portfolio management

4.2.2 Portfolio structure

4.2.3 Capabilities and constraints

4.2.4 Opportunities and threats

4.3 Roles and responsibilities

4.3.1 General principles

4.3.2 Defining decision rights for portfolio content

4.4 Stakeholder engagement and management

5 Prerequisites for portfolio management

5.1 Overview

5.2 Justification for portfolio management

5.3 Portfolio management framework

5.4 Types of portfolio components

5.5 Criteria for selecting and prioritizing portfolio components

5.6 Alignment with organizational processes and systems

5.7 Visibility of the portfolio

5.8 Portfolio performance reporting structure

5.9 Improving portfolio management

5.10 Governance of portfolios

6 Managing portfolios

6.1 Overview

6.2 Defining the portfolio objectives

6.3 Identifying potential portfolio components

6.4 Defining the portfolio plan

6.5 Assessing and selecting portfolio components

6.5.1 Overview

6.5.2 Assessing current state

6.5.3 Selecting portfolio components

6.6 Validating portfolio alignment to strategic objectives

6.6.1 Overview

6.6.2 Alignment with the strategic objectives of the organization

6.6.3 Maintaining alignment with risk tolerance and resource capacity and capability

6.6.4 Documenting and evaluating results of alignment actions

6.7 Evaluating and reporting the performance of the portfolio

6.7.1 Overview

6.7.2 Establishing the performance measurement baseline of the portfolio

6.7.3 Managing portfolio performance

6.7.4 Reporting the performance of the portfolio

6.7.5 Managing the integration of benefits

6.8 Balancing and optimizing the portfolio

6.8.1 Overview

6.8.2 Optimizing portfolio components

6.8.3 Maintaining the portfolio

6.8.4 Optimizing resources

6.8.5 Managing portfolio risks

6.8.6 Controlling changes to the portfolio

Bibliography

Foreword

ISO (the International Organization for Standardization) is a worldwide federation of national standards bodies (ISO member bodies). The work of preparing International Standards is normally carried out through ISO technical committees. Each member body interested in a subject for which a technical committee has been established has the right to be represented on that committee. International organizations, governmental and non-governmental, in liaison with ISO, also take part in the work. ISO collaborates closely with the International Electrotechnical Commission (IEC) on all matters of electrotechnical standardization.

The procedures used to develop this document and those intended for its further maintenance are described in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the different types of ISO documents should be noted. This document was drafted in accordance with the editorial rules of the ISO/IEC Directives, Part 2 (see www.iso.org/directives).

Attention is drawn to the possibility that some of the elements of this document may be the subject of patent rights. ISO shall not be held responsible for identifying any or all such patent rights. Details of any patent rights identified during the development of the document will be in the Introduction and/or on the ISO list of patent declarations received (see www.iso.org/patents).

Any trade name used in this document is information given for the convenience of users and does not constitute an endorsement.

For an explanation of the voluntary nature of standards, the meaning of ISO specific terms and expressions related to conformity assessment, as well as information about ISO’s adherence to the World Trade Organization (WTO) principles in the Technical Barriers to Trade (TBT), see www.iso.org/iso/foreword.html.

This document was prepared by Technical Committee ISO/TC 258, Project, programme and portfolio management.

This second edition cancels and replaces the first edition (ISO 21504:2015), which has been technically revised. The main changes are as follows:

—

terms and definitions, figures and the text have been aligned with ISO 21500:2021 and ISO 21502:2020.

Any feedback or questions on this document should be directed to the user’s national standards body. A complete listing of these bodies can be found at www.iso.org/members.html.

Introduction

This document provides guidance on the principles of project and programme portfolio management. Typically, management of a project and programme portfolio supports the organizational strategies to deliver value.

This document is intended to be used by:

executives and senior managers responsible for setting and implementing organizational strategy and business planning;

decision-makers responsible for selecting, authorizing and governing projects, programmes and portfolios;

teams and individuals responsible for implementing and managing the project and programme portfolios;

project and programme managers and other stakeholders.

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ISO 21504:2022(en)

International StandardISO 21504:2022(en)

Project, programme and portfolio management — Guidance on portfolio management

1Scope

This document gives guidance on the principles of project and programme portfolio management. This document is relevant to any type of organization including public or private and any size organization or sector.

The guidance presented in this document is intended to be adapted to suit the specific environment of each project and programme portfolio.

This document does not provide guidance on project management, programme management, or other specific types of portfolio management (such as financial portfolio management).

2Normative references

There are no normative references in this document.

3Terms and definitions

For the purposes of this document, the following terms and definitions apply.

ISO and IEC maintain terminological databases for use in standardization at the following addresses:

—

ISO Online browsing platform: available at https://www.iso.org/obp

—

IEC Electropedia: available at https://www.electropedia.org/

3.1

baseline

reference basis for comparison against which performance is monitored and controlled

[SOURCE: ISO/TR 21506:2018, 3.5]

3.2

benefit

created advantage, value or other positive effect

[SOURCE: ISO/TR 21506:2018, 3.6]

3.3

governance

principles, policies and framework by which an organization is directed and controlled

[SOURCE: ISO/TR 21506:2018, 3.25]

3.4

governing body

person, group or entity accountable for the governance (3.3) of an organization, organizations or a part of an organization

[SOURCE: ISO/TR 21506:2018, 3.26]

3.5

outcome

change resulting from the use of the output from a project (3.12) or programme (3.10)

[SOURCE: ISO 21502:2020, 3.13, modified — “or programme” have been added.]

3.6

portfolio

collection of portfolio components (3.7) grouped together to facilitate their management to meet strategic objectives

[SOURCE: ISO/TR 21506:2018, 3.42]

3.7

portfolio component

project (3.12), programme (3.10), portfolio (3.6), or other related work

[SOURCE: ISO/TR 21506:2018, 3.43]

3.8

portfolio manager

person appointed with the accountability and responsibility for a portfolio (3.6) to meet strategic objectives

[SOURCE: ISO/TR 21506:2018, 3.46]

3.9

portfolio management

coordinated activities to direct and control the accomplishment of strategic objectives

[SOURCE: ISO/TR 21506:2018, 3.45]

3.10

programme

group of programme components managed in a coordinated way to realize benefits (3.2)

[SOURCE: ISO/TR 21506:2018, 3.50]

3.11

programme management

coordinated activities to direct and control the realisation of identified benefits (3.2) and deliverables

[SOURCE: ISO/TR 21506:2018, 3.54]

3.12

project

temporary endeavour to achieve one or more defined objectives

[SOURCE: ISO 21502:2020, 3.20]

3.13

project management

coordinated activities to direct and control the accomplishment of agreed objectives

[SOURCE: ISO 21502:2020, 3.24]

3.14

stakeholder

person, group or organization that has interests in, or can affect, be affected by, or perceive itself to be affected by, any aspect of a project (3.12), programme (3.13) or portfolio (3.6)

[SOURCE: ISO/TR 21506:2018, 3.79]

3.15

strategic alignment

result of selecting and adjusting portfolio components (3.7) to contribute to accomplishing the strategic objectives of an organization

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Bibliography

[1]		ISO 21500:2021, Project, programme and portfolio management — Context and concepts
[2]		ISO 21502:2020, Project, programme and portfolio management — Guidance on project management
[3]		ISO 21503, Project, programme and portfolio management — Guidance on programme management
[4]		ISO 21505, Project, programme and portfolio management — Guidance on governance
[5]		ISO/TR 21506:2018, Project, programme and portfolio management — Vocabulary
[6]		ISO 21508, Earned value management in project and programme management
[7]		ISO 21511, Work breakdown structures for project and programme management

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