Portfolio prioritization: How to rank projects strategically
Tempo Team
In a perfect world, project managers would take on one initiative at a time – and always with the right resources to guarantee success. But reality rarely plays out that way.
Most project management offices (PMOs) oversee full portfolios of concurrent projects that compete for limited time, staff, and funding. On top of that, managers often face pressure from stakeholders eager to push their own projects to the front of the line.
That’s a lot to balance, but portfolio prioritization makes it possible. It allows PMOs to make the best use of resources and find a common ground among competing interests. And behind every well-prioritized portfolio is solid project portfolio management.
What’s portfolio prioritization?
Portfolio prioritization is the process of evaluating and ranking projects based on factors like profitability, feasibility, business value, and impact. Using clear project prioritization criteria and working closely with program and portfolio managers, the PMO decides which initiatives move forward, which to postpone, and which to remove from the list entirely.
Prioritization criteria often include:
Alignment: Does the project support the organization’s strategic objectives and contribute to business goals?
Value: What benefits will the project deliver to the business and its customers?
Resource availability: Is the project feasible with available personnel, funds, and time?
Project risk: What potential roadblocks or blind spots could affect the project’s success or negatively impact the rest of the portfolio?
What are the benefits of portfolio prioritization?
Portfolio prioritization looks good and shows that the company has a clear view of what matters most, but the perks don’t stop there. Here are some of the additional advantages that portfolio prioritization offers.
1. Strategic alignment
When you weigh work against strategic objectives, the initiatives that truly move the business forward rise to the top. The PMO can then steer limited time, budget, and attention toward efforts that actually advance those goals.
2. Optimized resources
Prioritization turns “do more with less” into a concrete plan. Project managers place the right resources on high-impact efforts first, cutting waste and lifting team efficiency – even when constraints aren’t the main issue.
3. Managed risk
Every project carries uncertainty. Looking across the whole portfolio helps you balance bets, spot dependencies, and contain ripple effects so one setback doesn’t derail everything.
4. Informed decision-making
Using consistent criteria makes comparisons fair and fast. With the facts side by side – feasibility, alignment, and expected impact – leaders can make confident calls even when priorities compete.
5. Engaged stakeholders
Involving stakeholders in the process, not just the outcome, fosters trust and buy-in. Showing them how priorities were set makes execution easier for project managers.
6. Flexibility
Priorities change. Ongoing portfolio management lets you adjust to new market signals, shifting resources, or staffing changes without losing momentum or losing sight of strategy.
How to prioritize projects in a portfolio: 7 steps
Project portfolio prioritization isn’t a once-in-a-blue-moon ceremony. It should happen whenever necessary, even in the middle of active work. The earlier the PMO begins ranking what’s on their team’s plate, the sooner everyone can work at full efficiency.
1. Reassess existing work
Begin with the projects already in motion. Pull each one up and take a good, honest look: Does the scope still hold, or has it drifted? Are the deadlines realistic, or are you hoping the calendar will bend? How’s the budget holding together, and do you have the people and tools to finish the job? Check the roadmap to see if it still makes sense on the ground.
Then weigh the results so far. If they’re on track, great. But if they’re shaky or hard to read, that’s a sign something needs to change. By the end of this pass, you’ll have a clearer sense of which projects should move up and which might need a pause or rethink.
2. Establish ranking criteria
After that first sweep, gather the right people and decide how to measure what’s worth doing first. You might weigh business value against strategic fit, look at the potential for profit, consider whether the market actually wants it, and size up the risks involved. Resource needs and project dependencies can tip the balance too. However you define it, keep the criteria short, clear, and tied to what the organization values most.
3. Review project data
Before scoring anything, make sure all the facts are in front of you. That means the business case for why it exists, the feasibility study that says whether it’s possible, and any market analysis that shows demand. Look at projected returns, the risks already identified, and whether the right resources are actually available. You’ll use this raw material to decide what belongs at the top of the list.
4. Organize and score
Once the data is in hand, start grouping projects in categories like non-negotiable, high value, transformative, growth, or improvement. Assign a weight to each category, then combine that with the numeric scores you calculated earlier when you applied the ranking criteria. From there, rank the portfolio with an eye toward the work that will deliver the greatest value to both the business and its customers.
5. Communicate with stakeholders
Share the prioritized portfolio with relevant stakeholders, including sponsors, department leads, and decision-makers, so everyone understands the current order of work. Alongside the list, explain the prioritization method so the reasoning is clear and buy-in is easier to secure.
6. Seek feedback and adjust
Invite input from stakeholders, sponsors, and senior leadership on both the rankings and the approach. Look for insights that reveal blind spots, conflicting priorities, or resource gaps, and incorporate them into future prioritization rounds. Update the team on any changes to keep the process transparent.
7. Manage the portfolio
Treat portfolio organization as an ongoing responsibility, not a single milestone. Set a regular review cadence – quarterly or biannually – and be ready to re-rank projects when market shifts, strategic goals, customer needs, or resource availability change. This helps ensure the portfolio stays aligned with both long-term strategy and current realities.
Best practices for managing a project portfolio
Portfolio prioritization is an ongoing learning process that gets better and more effective with practice. That doesn’t mean the PMO can’t initiate some best practices to set it on the path to success.
1. Apply the scoring model consistently
Nothing erodes trust in project portfolio management protocols like inconsistency or signs of favoritism. To prevent that, be sure to evaluate every project against the same criteria. It shows management and sponsors that decisions are fair and grounded.
2. Be clear about prioritization techniques
Scoring’s only part of the process. The PMO also needs to rank projects in a way that everyone understands exactly why certain initiatives move forward first. Common frameworks for ranking include:
Value vs. Effort Priority Matrix: This technique maps each project on a two-by-two grid to see how its potential impact, benefits, and ROI stack up against the work required to deliver it.
RICE: Teams score each project’s reach, impact, confidence, and effort to determine its place in the lineup.
ICE: This framework ranks projects based on impact, confidence, and ease of implementation.
MoSCoW: This method sorts projects into “must-haves,” “should-haves,” “could-haves,” and “won't-haves.”
3. Use tools to facilitate portfolio management
Once the scoring model is set, use PPM software to take the heavy lifting out of prioritization. Automate the assessment and ranking process, keep scoring consistent across every project, and give stakeholders a clear view of where things stand.
4. Assess resource capacity across priorities
Look at the portfolio through the lens of resource availability. Assign top talent to high-priority, high-value projects first, then spread remaining resources across the rest to keep workloads balanced and bottlenecks at bay.
5. Communicate with stakeholders
Keep everyone in the loop. Share regular updates on wins, challenges, and overall progress, along with key details on status, resources, and performance metrics. The more transparent the updates, the stronger the trust.
6. Foster a culture of continuous improvement
Treat every prioritization cycle as a chance to improve. Review what worked, what didn’t, and what stakeholders had to say. Then refine the process so it becomes smoother over time.
Enhancing portfolio prioritization with Tempo
Tempo’s suite of tools takes the guesswork out of project portfolio prioritization. Portfolio Manager gives you a clear view of every assignment, automatically balances workloads, and uses powerful algorithms to respond to shifting priorities and uncertain conditions. Pair it with Capacity Planner to see resource availability at a glance and ensure every project is staffed for success.
When priorities shift – and they often do – Tempo allows you to pivot fast and deliver results without missing a beat.
