Multiple competing projects, limited skilled resources, dispersed virtual teams, time to market pressures, and limited capital serve as forces for the emergence of project portfolio management that provides the infrastructure for managing multiple projects and linking business strategy with project selection. The most important element of this system is the creation of a ranking system that utilizes multiple criteria that reflect the mission and strategy of the firm. It is critical to communicate priority criteria to all organizational stakeholders so that the criteria can be the source of inspiration for new project ideas. Every significant project selected should be ranked and the results published. Senior management must take an active role in setting priorities and supporting the priority system. Going around the priority system will destroy its effectiveness. The project priority team needs to consist of seasoned managers who are capable of asking tough questions and distinguishing facts from fiction. Resources (people, equipment, and capital) for major projects must be clearly allocated and not conflict with daily operations or become an overload task.

The priority team needs to not only scrutinize significant projects in terms of their strategic value but also their fit with the portfolio of projects currently being implemented. Highly ranked projects may be deferred or even turned down if they upset the current balance among risks, resources, and strategic initiatives. Project selection must be based not only on the merits of the specific project but also on what it contributes to the current project portfolio mix. This requires a holistic approach to aligning projects with organizational strategy and resources.