What is the primary purpose of portfolio categorization?

The primary purpose of portfolio categorization is indeed to group projects for resource allocation. This approach allows organizations to systematically organize their projects based on various criteria such as strategic alignment, resource requirements, risk levels, and overall impact. By categorizing projects, portfolio managers can more effectively allocate resources, ensuring that they are assigned to the highest priority projects that align with organizational goals.

This grouping helps in identifying which projects can share resources or expertise and facilitates better planning and coordination. For instance, projects that require similar resources or have overlapping objectives can be managed effectively by pooling resources, thereby optimizing efficiency and improving the utilization of available assets.

Additionally, this method aids in monitoring and managing the overall project portfolio, ensuring that the right balance is maintained between different types of projects—whether they are exploratory, operational, or innovative—while focusing on strategic outcomes. Consequently, a well-structured categorization process is fundamental to maximizing the value derived from the portfolio.