The concept of portfolio management is used in slightly different ways. The simplest application is to overview the projects decided at a higher management level. Here there is a weak link to both budget and resource allocation, which depends on how the individual project is currently planned.
True portfolio management, on the other hand, is achieved in Lean Portfolio Budget, where authorized resource use is governed by a periodic allocation of resources to constituent initiatives and value streams.
The message of the Lean Portfolio Budget is that the portfolio has a fixed budget and allocates it to the included initiatives. In case of value streams, the allocation for future periods is reassessed at a chosen interval with a prioritization according to what is currently generating the best value. A major advantage of this is that Resource Planning becomes very stable. The best effect is achieved by forming teams whose capacity is planned against the portfolio's bid and periodization. This makes it possible, for example, to handle employees leaving and being replaced by new ones without affecting the pace of the portfolio's initiatives.
The figure shows the strategic relationship between the portfolio's strategic objectives and its benefits. The organization's budget is allocated to portfolios and thus its share of the resource capacity of the organization's teams. This approach makes it easy to balance resources and demand both in the short and long term.
The key results of the portfolio's strategic objectives must be reflected as impact objectives of any initiative in the portfolio of solution artifacts. ART is given a timetable of stations similar to the usual milestone planning with its timing and delivery content at each station.