ABSTRACT
The development of a strategy is treated as external to portfolio management. Defining the portfolio is the first and most critical step in portfolio management. Portfolio objectives must reflect the portfolio's scope and boundaries. There is little point in giving a portfolio director an objective over which he or she has no influence. By managing the programmes and projects as a portfolio practitioners can make sure that they are aligned, determine the scope of each to minimize interdependencies, and make effective and efficient use of their resources. An organization will always have at least one portfolio. If it is a large and diverse organization it is often convenient to have more than one portfolio, each of which is directed towards one or more of the focus points within the vision. Portfolio objectives need to be described as 'outcomes', not 'outputs. They describe a changed state for the organization – something that the business will be doing differently in the future.
