A portfolio can be perfectly aligned to internal strategy and still invest in work that customers do not value enough.
Project organisations usually involve customers at the project level.
Requirements are gathered. Users review prototypes. Customer feedback informs design. Contractual acceptance criteria are negotiated. Marketing may support product development.
Yet the portfolio decision often remains internally framed.
Executives decide which projects to fund using strategy, cost, risk, resources and financial return, while customer knowledge arrives indirectly through the business cases of individual initiatives.
Martin Voss's 2012 conceptual study challenges this separation. It proposes integrating the management of customer relationships with project portfolio management and asks whether customer considerations should influence which projects are prioritised, added, removed and resourced.
The proposition is important because the portfolio determines where the enterprise will build future value.
Customer insight belongs before delivery begins.
The Strategic Context
Portfolio management is often described as a hub connecting projects with organisational strategy and operations.
For customer-facing portfolios, another connection matters:
projects → offerings → customer relationships → enterprise value.
A portfolio of product-development, service, infrastructure or customer-specific projects can affect multiple customers simultaneously.
One project may strengthen a strategic relationship.
Another may solve a narrow requirement for a low-value segment.
A third may create a platform that benefits many customers.
A fourth may absorb scarce engineering capacity for a customer whose future strategic value is limited.
Project-level economics alone may not reveal these differences.
The organisation needs to understand both the project portfolio and the customer relationship portfolio.
Related article: Portfolio Management Is Capital Allocation in Action
What Leaders Commonly Misread
The first mistake is assuming the customer is already represented because projects contain customer requirements.
Requirements tell the team what a particular project needs to deliver.
They do not necessarily tell executives whether the portfolio is investing in the right customers, problems or relationships.
The second mistake is equating customer voice with customer control.
Customer integration does not mean allowing individual customers to dictate enterprise investment.
Leadership remains responsible for portfolio balance and long-term strategy.
The third mistake is treating marketing or sales information as anecdotal.
Customer-facing functions hold information about demand, relationship health, unmet needs, adoption and competitive alternatives. When this information remains disconnected from PPM, investment decisions lose market context.
The fourth mistake is optimising the project portfolio and customer portfolio separately.
Voss draws on earlier relationship research to argue that separate optimisation does not necessarily maximise overall business performance.
The fifth mistake is assuming all customer input is equally valuable.
A strategic customer, lead user, low-margin volume customer and occasional buyer can provide very different information and value.
Portfolio governance needs representation, not noise.
Reframing the Issue
The correct question is not:
Should customers choose our projects?
It is:
How should reliable customer intelligence enter portfolio decisions without surrendering enterprise judgement?
This is a cross-functional integration problem.
Voss's conceptual framework uses a customer representative, often the marketing function, as the connection between the customer relationship portfolio and PPM.
The exact organisational mechanism can vary.
In some businesses the relevant voice may come from:
- marketing;
- sales;
- key account management;
- customer success;
- product management;
- service operations;
- an internal-user representative.
The important requirement is that customer knowledge is systematically present where portfolio choices are shaped.
Customer Integration Across the Portfolio Cycle
Voss structures PPM into four interdependent phases:
- portfolio structuring;
- resource management;
- portfolio steering;
- value capturing.
The paper proposes that customer integration can occur across all four, but not necessarily with the same intensity.
This distinction is strategically useful.
Portfolio structuring
This is where customer knowledge can have the greatest leverage.
Leadership is deciding:
- which opportunities deserve investment;
- which customer problems are material;
- which markets matter;
- which projects should be prioritised.
If customer insight enters only after selection, the organisation may execute the wrong concept more efficiently.
Resource management
Customer value can inform how scarce capacity is distributed.
This does not mean resources automatically follow the largest customer.
The portfolio should consider strategic relationship value, future potential, commitments and broader enterprise economics.
Portfolio steering
As projects evolve, customer information can reveal whether assumptions remain valid.
Changing demand, adoption signals or relationship risks may justify reprioritisation.
Value capturing
After delivery, the organisation should learn whether projects created customer and enterprise value.
That evidence should inform future portfolio selection.
Related article: From Outputs to Enterprise Value: The Strategy-to-Delivery Chain
Why Customer Integration Can Improve Decision Quality
Customer-connected PPM can reduce several strategic risks.
Building products customers do not sufficiently value
A technically impressive project can succeed in delivery and fail commercially.
Over-investing in loud customers
Without a portfolio view, the most influential customer can pull resources into bespoke work that weakens broader strategy.
Missing platform opportunities
Customer needs that appear different at project level may share an underlying capability.
Portfolio-level customer insight can reveal common investment themes.
Damaging relationships through local optimisation
A project may meet its budget by reducing service, quality or flexibility in ways that weaken a valuable relationship.
The project can be locally successful while the customer portfolio loses value.
Evidence From the Later Empirical Study
Voss's 2012 paper is conceptual and explicitly states that the model requires empirical testing.
The later Voss and Kock study provides related empirical evidence from 174 medium and large organisations in Germany, Switzerland and Austria. It found both relationship value for the customer and relationship value from the customer positively associated with project-portfolio success.
This does not prove every proposed customer-integration mechanism in the 2012 framework.
It does strengthen the case that customer relationship value belongs within portfolio thinking.
Related article: A Customer Is More Than Revenue: Managing Relationship Value Across the Project Portfolio
Decision Framework
Use a Customer-Connected Portfolio Test.
1. Representation
Who brings credible customer knowledge into portfolio decisions?
2. Strategic relevance
Which customers, segments or user groups matter to the enterprise strategy?
3. Value hypothesis
What customer outcome is the project expected to improve?
4. Portfolio effect
Does the investment strengthen one relationship at the expense of others or create reusable capability?
5. Evidence
What customer behaviour, feedback or market data supports the decision?
6. Learning loop
How will realised customer outcomes affect future portfolio choices?
The test prevents customer orientation from becoming an abstract cultural value.
It becomes part of investment governance.
A Hypothetical Manufacturing Example
Consider a hypothetical industrial manufacturer with ten product-development projects.
Three projects originate from requests by one high-volume customer.
Four target recurring needs across several medium-sized customers.
Two are internally proposed technology upgrades.
One explores a new service model.
If projects are assessed only through forecast revenue, the large customer's initiatives may dominate.
A customer-connected portfolio review would also ask whether those projects create reusable capability, strengthen strategic dependence, improve margin, open adjacent markets or consume engineering capacity that could solve broader customer problems.
The result might still favour the large customer.
But the decision would be based on relationship and portfolio economics rather than sales volume alone.
From Strategy to Execution
Immediate action: identify how customer information currently enters project-selection and prioritisation decisions. Map gaps between customer-facing functions and the portfolio office.
Medium-term capability building: create structured interfaces between PPM and customer relationship management. Standardise a small number of customer-value fields in major investment proposals without turning business cases into marketing reports.
Long-term strategic positioning: connect project portfolio choices with product, market and customer portfolio strategy. The enterprise should understand which investments strengthen future relationships and which simply satisfy today's requests.
Signals to Monitor
Watch for customer satisfaction appearing only after project delivery; project proposals containing revenue forecasts but little evidence of customer need; customer-facing teams learning about portfolio priorities after decisions are made; bespoke projects consuming disproportionate scarce capacity; strategic customers repeatedly surprised by delivery choices; and portfolios where internal efficiency projects dominate despite customer-value problems being strategically significant.
Another warning sign is when "voice of customer" exists as a workshop activity but not as an input to capital allocation.
Questions for the Leadership Team
- Who represents customer knowledge when we choose projects?
- Which customer problems receive the largest share of portfolio investment?
- Are we allocating resources to the loudest customers or the most strategically valuable relationships?
- Which projects create capabilities that benefit multiple customer relationships?
- What customer evidence would cause us to stop or redesign an initiative?
- Do customer outcomes feed back into future portfolio prioritisation?
- Where are internal priorities and customer value currently in tension?
Closing Perspective
Customer orientation should not begin after a project has been authorised.
Portfolio management shapes the future products, services and capabilities the enterprise will offer.
If customer knowledge is absent from those choices, the organisation risks becoming strategically aligned to itself.
The objective is not customer control of the portfolio.
It is investment discipline informed by the people and relationships that ultimately determine whether the value proposition works.
About EraNorth Insights
EraNorth Insights publishes practical analysis on strategy, projects, operations, transformation and decision intelligence for professional and organisational use. About EraNorth.