Project Portfolio Management Definition
The goal of project portfolio management is to organize a series of projects into a single portfolio that describes project objectives, costs, timelines, accomplishments, resources, and risks. In theory, this would allow executives to regularly review entire portfolios, spread resources appropriately and adjust projects to produce the highest departmental returns. This is similar to the theory that a portfolio of diverse investments is more likely than individual investments to reduce risks and produce a higher rate of return.
The concept of IT project portfolio management has been tossed around academic circles only since the 1980s, but didn't started making its way into IT departments until the nineties when CIOs recognized the benefit of treating projects like a portfolio of investments. Project assessments moved beyond the traditional cost analysis and started to include consider anticipated risks and returns in relation to other projects. This then became a way for upper management to adjust portfolios to produce the highest returns based on current conditions.
I've also put together a description of project management fundamentals if you're interested in learning more about this profession.