What does portfolio variance represent in project portfolio management?

In project portfolio management, portfolio variance specifically refers to the difference between planned and actual outcomes. This concept is essential for assessing the performance and risk of the portfolio as a whole. It provides insights into how well the projects within the portfolio are aligned with strategic goals and expectations. Variance analysis helps managers understand where discrepancies arise, whether in terms of cost, schedule, or project outcomes, allowing for informed decision-making and adjustments.

By monitoring and analyzing variance, project managers can identify trends, uncover underlying issues, and implement corrective actions, ensuring that the portfolio remains on track to deliver its intended value. This focus on comparing planned versus actual results is crucial for effective management and strategic alignment within the project portfolio.