The term “portfolio management” is a really confusing term. There are all kinds of portfolios: financial portfolios, R&D portfolios, NPD portfolios, innovation portfolios, insurance portfolios, and on and on. And then there are “strategic portfolios” — “operational” portfolios — “tactical” portfolios. Confounding the issue, within Project/Portfolio Management (PPM) systems, vendors tend to use the all-encompassing term “portfolio management” to include everything from ideation to resource management and everything in between.
In our work with clients, we consistently find that “portfolio management” means very different things to different people. To simplify discussions we historically made a distinction between “strategic” and “operational” portfolio management, which we have come to feel is not workable in the real worlds of R&D, NPD and innovation management.

My feeling, sure to be controversial, is that a portfolio — regardless of what you call it — must be based on the level of decision-making. When the decision is about selecting projects or opportunities in which to invest, the cast of characters is quite different from those who make decisions about how to allocate resources and budgets once a project is underway. In the former case, the financial function or general management function may be prime decision makers. In the latter case, project managers may be the decision makers.

Both the processes and tools that support these decision makers need to be quite different. As noted in the opening paragraph, many software vendors cloud the issue by bundling everything under PPM or Project/Portfolio Management, fundamentally confusing the issue.
A portfolio is nothing more than a grouping of projects or opportunities for comparison with the objective being to make decisions based on various factors germane to the decision makers or decisions at hand.
vp confusion
During a product development process, there can be a number of portfolios, each serving a different purpose. There may be early-stage portfolios to guide investments in opportunities where there is considerable uncertainty around many factors that will impact successful development, commercial expectations, revenue generation and profitability. At the same time, there may be one or more development portfolios, depending upon the homogeneity of the project set, with decisions made to balance resources against successfully completing projects on time and on budget.
Following development and product launch, there may be additional portfolios, including advertising portfolios, marketing portfolios, and sales-management portfolios.
My point in the above rambling is that there are numerous portfolios. Each needs different sets of processes, metrics and tools to provide management with the information required to make quality decisions. The message: be wary of any vendor who claims to have the whole answer.