Portfolio management has changed considerably over the years. While at the beginning it was an input for the annual budgeting, nowadays one sees more and more agile portfolio management approaches, which differ essentially in that one skips the budget stage and directly coordinates, prioritizes and executes new project ideas with the portfolio.
A rough distinction can be made between a waterfall (or more accurate bucket) and an agile (rolling) portfolio. In the first case, the projects are prioritized, usually during a budgeting phase, and filled into a pipeline, similar to filling water into a bucket. This pipeline is processed after budget release. Changes to this pipeline are possible, but remain the exception.
While waterfall portfolios are best suited for lifecycle projects, agile portfolios are used in the innovation area or in areas with low planning horizons.
Both types of portfolio management can coexist as long as the application areas are properly defined. It is important that appropriate portfolio governance exercises the processes correctly.