This phase determines the orientation of the portfolio at the strategic level. The focus is not on projects, but on portfolios that serve a defined purpose and have clear goals and KPIs. Management should consider how important certain strategic goals are to them and what percentage of the total project budget should be allocated to these goals. This process is also known as pitching.

The strategic portfolio management does not belong to the core PMO which is operational and not strategically oriented.

The strategic level of the portfolio management corresponds to the "Act" step in the Deming circle, because - according to definition - the management evaluates the actual state and defines new goals or changes existing ones.

As output of this process, which should take place at least once a year, we see

• Confirmed, existing portfolios with possibly adjusted targets
• New portfolios due to new challenges, e.g. due to digitization
• Closed portfolios, because no increase in value is possible anymore or the portfolio has become obsolete due to changed market conditions.
• Distribution of the total budget among the portfolios

This output defines the framework conditions for operational portfolio management, which deals with the implementation of the portfolio strategy.