What is Service Portfolio Management?

What is Service Portfolio Management?

Service portfolio management is the governance processes of the service portfolio. The process is one by which a service provider can manage their investments across the service lifecycle by taking into account every service in terms of the business value provided by it.

A service provider makes use of service portfolio management to control the entry of any service into the service portfolio by tracking any investment in services through its entire lifecycle starting from the development till the delivery and retired stages.

Purpose of Portfolio Management

  • The main purpose of service portfolio management is to make sure that the service provider has a proper mix of services to meet their overall service strategy.

  • Service portfolio management ensures that the entry or exit of service from any stage is dependent on the approval of funding. It also required an appropriate financial plan to recover the costs or to generate a required level of profit, depending on the nature of the service provider’s organization.

Objective of Portfolio Management

The objectives of service portfolio management are:

  • To enable a service provider to investigate and make decisions regarding which services need to be provided and which of them need to be retired. This is based on risk analysis and the potential return which can be obtained.

  • To document every service planned and operated by the service provider for future reference.

  • To manage a definite service portfolio which includes a clear articulation of the business needs that are addressed by each service and the business needs it supports.

  • To run every new service through a set of activities and procedures which are standardized to ensure that the relevant information for management, service delivery, and support is documented and provided to the appropriate management processes.

  • To evaluate the degree to which each and every service of theirs enables the service provider to achieve their service strategy.

  • To control the services being offered under different conditions and investments.

  • To review each service under the Continual Service Improvement Process.

  • To provide an information base for a service catalog through the service portfolio.

  • To track every investment in service throughout each services lifecycle.

Scope of Portfolio Management

The scope of service portfolio management encompasses the following:

  • Services which are planned to be delivered

  • Services which are presently being delivered

  • Services which have been withdrawn from service

For an internal service provider, their execution of service portfolio management requires them to work closely with each business unit in the organization to assess the service investment and returns.

For an external service provider, their execution of service portfolio management required them to be able to evaluate each service more overtly as each service should generate profit directly or support the services which are generating profit.

Roles And Functions of Portfolio Management

Static Process Roles

  • Service Portfolio Process Manager

    The service portfolio process manager has to manage the entire process and is responsible for its effectiveness and efficiency.

  • Service Portfolio Process Owner

    The service portfolio process owner is the process initiator and is accountable for defining the strategic goals of the process and allocating all the resources required for the process

  • Service Portfolio Management Team

    The service portfolio management team is the team associated with the service portfolio management process.

Dynamic Process Roles

  • Service Agent

    The Service Agent attribute of each service record consists of the role which is responsible for the present activity within the process of Service Portfolio Management. The Service Agent can be changed by a functional escalation if the rules permit it.

  • Service Owner

    The Service Owner attribute of each service record consists of the role which is presently accountable for the service.

  • Service Sponsor

    The Service Sponsor is the person or board responsible for the budget and specific costs related to a service.

  • Requirements Requestor

    The requirements requestor consists of a person or a group of people who are expressing the new demands which need to be fulfilled by the IT service provider.

  • Service Design Team

    The service design team is the one associated with all the tasks in the context of designing a service.


The following benefits are offered by Service Portfolio Management:

  • Service portfolio management allows the business to make the right decisions with regards to investment and de-investment in services, thus ensuring that such decisions are made on the basis of a strong business case.

  • It provides a meaningful and cost-effective alignment between the IT services and strategic goals for the business.

  • Service Portfolio Management provides a shift in attitude towards IT, which is now viewed as a value-generating component instead of being considered as an inevitable expense.

  • It leads to an increase in the ability of the company to cater to the end users.

  • The organization is provided with an insight into the difference that the IT service would create and the impact it would have on the business.

  • It helps to give increased attention and focus to the services which are the most valuable and profitable, thereby increasing the productivity of employees.


The main principle of service portfolio management is to enable a service provider to understand the following:

  • The services provided by service portfolio management

  • The investments made in those services

  • The strategy and objectives of each service in terms of business value.

With this understanding, the service provider can control and manage decisions about its service throughout the service lifecycle.

Process Activities

There are 4 major phases of activity in service portfolio management:

  1. Define

    This phase involves collection and validation of the entire inventory consisting of all the existing and proposed services, including their business cases.

  2. Analyze

    During the analyzing phase, the services which are required for the service provider to achieve its strategy are identified. In addition to that, identification of how well the existing service portfolio meets these and how to prioritize and balance supply and demand is also made.

  3. Approve

    Each service in the service portfolio along with the level of investment associated with it needs to be approved. All changes made to services in the service portfolio also need approval. Even when services are being retired, an approval is required.

  4. Charter

    In order to authorize each project to build, enhance or retire a service, a charter is required. The purpose of the charter is to document the scope of the project and the terms of reference in addition to the approval decisions related to agreed changes to the service portfolio.


The following challenges can be encountered by service portfolio management:

  • A lack of access to information which is required for business.

  • Absence of formal project management or change management.

  • A service portfolio which is focused only on the service provider’s aspect of its services.

  • Absence of a project or customer portfolio.


Some of the risks faced by service portfolio management are:

  • Customer pressure can lead to ill-informed decisions regarding which services to offer and invest in.

The services being offered cannot be measured adequately.

Overall the service portfolio management ensures enterprises take correct decisions in the form of investment, justifying the business case, and having a clear understanding or expected ROI. Service portfolio management analyzes all the critical aspects required to provide high-quality IT services to the customers and investments required to build, operate and deliver the same.

Request for Training

Phone number ( required * )

You may select multiple Courses
Live virtual classroom
Select your preferred mode of contact

By clicking "Submit", you agree to our Terms of Conditions, Privacy Policy.
© 2021 Invensis Inc.
  • PMI®, PMP®, CAPM®, PMI-ACP®, PMBOK® and the PMI Registered Education Provider logo are registered marks of the Project Management Institute. Inc.
  • ITIL® is a registered trade mark of AXELOS Limited, used under permission of AXELOS Limited
  • PRINCE2® is a registered trademark of AXELOS Limited, used under permission of AXELOS Limited
  • PRINCE2 Agile® is a registered trademark of AXELOS Limited, used under permission of AXELOS Limited
  • AgileSHIFT® is a registered trademark of AXELOS Limited, used under permission of AXELOS Limited
  • The Swirl logoTM is a trade mark of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved
  • DevOps Foundation® is registerd mark of the DevOps institute
  • COBIT® is a trademark of ISACA® registered in the United States and other countries
  • CSM, A-CSM, CSPO, A-CSPO, and CAL are registered trademarks of Scrum Alliance
  • Invensis Learning is an Accredited Training Provider of EXIN for all their certification courses and exams