Many construction firms excel at delivering individual projects but fall short when it comes to true portfolio management. While focusing on project execution is essential, the absence of strategic portfolio management (SPM) means organizations often miss opportunities to align projects with business goals, prioritize investments effectively, and manage risks at scale. This oversight can result in wasted resources, fragmented data, and missed strategic objectives.

The Gaps in Construction Portfolio Management

1. Complex Resource Management

Balancing labor, equipment, and materials across multiple projects is a major challenge. According to a KPMG Global Construction Survey, only 69% of innovative leaders in engineering and construction have integrated their project management systems with multiple tools for projects and portfolios. This integration is crucial for effective crew and asset management across a portfolio, yet many firms still operate in silos, leading to inefficiencies and missed opportunities⁵.

2. Fragmented Project Data

Information silos are a persistent and costly problem in construction. Data scattered across teams and platforms makes it difficult to get a real-time, holistic picture of portfolio health. This fragmentation not only delays decision-making but also reduces the accuracy of reporting and can result in lost profits and missed savings opportunities⁴.

3. Project Misalignment

Projects managed in isolation often fail to support broader business strategy. Industry research shows that approximately 80% of project managers believe project portfolio management is a critical factor in influencing business success, underlining the importance of aligning projects with organizational goals¹.

4. Inadequate Risk Management

While project-level risk management is common, many organizations overlook portfolio-wide risks. The construction industry, a $10 trillion global market, is notorious for its high-risk, capital-intensive projects. Without a portfolio perspective, systemic issues can go unnoticed, leading to cost overruns and delays^2,5.

5. Inconsistent Project Prioritization

Without a standardized framework for prioritizing projects, organizations may fund the wrong initiatives, leading to minimal strategic value and inefficiencies. Nearly 10% of every dollar is squandered due to poor project performance, often because of misaligned or poorly prioritized projects¹.

The Power of Strategic Portfolio Management

Strategic portfolio management addresses these gaps by providing a holistic, data-driven approach to construction project oversight:

• Alignment with Business Goals: SPM ensures every project is directly tied to the organization’s long-term objectives, maximizing ROI and strategic impact.
• Prioritization and Resource Optimization: By evaluating the entire portfolio, organizations can prioritize projects that deliver the greatest value and allocate resources where they are needed most.
• Enhanced Risk Management: SPM enables continuous risk evaluation across the portfolio, allowing for proactive adjustments and mitigation strategies.
• Better Decision-Making: With a single source of truth and comprehensive analytics, leaders can make informed decisions, adapt to disruptions, and respond quickly to changing market conditions.
• Improved Project Controls: Integrated project controls, budgeting, and forecasting help keep projects on track and within budget, reducing the likelihood of overruns.

Real-World Impact

Organizations that implement strategic portfolio management see measurable benefits. For example, KPMG found that 66% of projects managed by innovative leaders with integrated portfolio management systems came within 90% of the planned schedule⁵. Additionally, more than 85% of project managers now work on multiple projects simultaneously, highlighting the need for portfolio-level oversight and prioritization¹.

Moving Forward

Strategic portfolio management is not just about technology, but about transforming how construction organizations plan, prioritize, and execute their work. By adopting SPM, firms can bridge the gap between strategy and execution, ensuring that every project contributes to long-term business success and that investments are protected in an increasingly competitive, high-stakes industry.

References

1. 25 project management statistics to guide your plans in 2025 – Content Snare
2. Benefits of Construction Project Portfolio Management – Hexagon
3. Construction Industry Statistics 2025 – BizPlanr.ai
4. The Cost Of Information Silos In Construction – eSUB
5. Benefits of Construction Project Portfolio Management – Hexagon (blog)