The Strategic Program Management* questions on the PgMP® certification exam constitute 15% of the exam or 25 questions.
These questions relate to the Program Strategy Alignment domain within the Standard for Program Management—Third Edition (2013). The emphasis is to ensure that the program initially supports and continues to support the organization’s overall strategic goals and objectives.
Before the program is chartered, this area is important to make sure the program should be pursued in the organization. Therefore, time and attention are needed to perform an initial assessment of the program by defining its objectives and requirements to make sure they are in alignment with the organization’s goals and objective. A high-level roadmap or timeline for the program also should be part of its business case before the program is officially approved. A mission statement should describe why the program is important. Also, justification for the funds that will be required is needed. Exam questions will emphasize key parts of the program’s business case.
Before the program is approved, the sponsor must identify key stakeholders who will be involved in and/or affected by the program and consult with them to make sure the program is one that supports organizational objectives, is feasible, is in line with the organization’s priorities as stated in its portfolio, and is aligned with the organization’s strategic plan. Exam questions may focus on key stakeholders and how to best ensure their support for the program.
Specific benefits for the program also should be part of the business case and are part of this domain even though benefits management is another domain in the exam. Benefits are the outcomes of the program and in identifying them, a cost-benefit analysis, market analysis, and other research should be conducted. By doing so, a high-level scope statement can be prepared along with a high-level benefits realization plan. It is important to keep in mind that programs are established because through a program greater benefits can be delivered than if the projects, subprograms, and other work in the program were managed in a standalone fashion. A benefit means an improvement to the running of the organization, and benefits can be either tangible ones, which can be quantified, or intangible ones, which are qualitative and more difficult to measure. Both types of benefits should be documented and included in the program’s business case. Some benefits will be realized while the program is under way, while others may not be realized until the program has been completed or even after the program has ended.
As well, there are more constraints when managing a program than a project, and these constraints, such as regulations, standards, sustainability, cultural considerations, geographical considerations, politics, and ethical concerns, must be considered before a program is approved. Questions will focus on the impact of the various constraints that will affect the program to help decision makers decide whether or not to approve it.
This domain introduces the program roadmap, which is progressively elaborated during the program, but serves as a graphical, chronological representation of the program’s intended direction. The roadmap is helpful to determine whether the program should be approved and also to review it periodically as one way to determine whether or not the program remains aligned with organizational strategies.
Within this domain, environmental assessments often are conducted, including analysis used to assess the business case and the initial program plan. These analyses include comparative advantage analysis; feasibility studies; strength, weakness opportunity, and threat (SWOT) analysis; assumptions analysis; and use of historical information. Enterprise environmental factors require consideration.
Strategic program management also involves evaluating integration opportunities, which means considering resource requirements, facilities, finances, assets, processes, and systems in the various program activities, including the non-project work, so they are aligned and integrated across the organization.
Once the program is approved, then the initiation process begins.
This area covers a substantial volume of material. You should study the contents regarding the Program Strategy Alignment domain in the Standard, but recognize now it contains a far broader treatment.
Following is a list of the major topics in the Strategic Program Management domain. Use this list to focus your study efforts on the areas that are most likely to appear on the exam.
Project, program, and portfolio definitions
Program management definition
Subprogram, component, and program activities
Business value
Relationships between—
Program factors
Organizational strategy and program alignment Strategic planning
Initial program assessment
Program business case
Program mandate
High-level program plan
Program roadmap—high level
Program objectives
Integration opportunities and needs
INSTRUCTIONS: Note the most suitable answer for each multiple-choice question in the appropriate space on the answer sheet.
Program A NPV at |
Program B NPV at |
Program C NPV at |
Program D NPV at |
---|---|---|---|
5% = $2,399 |
5% = $2,105 |
5% = $6,400 |
5% = $4,065 |
10% = $3,112 |
10% = $1,254 |
10% = $3,275 |
10% = $1,852 |
15% = $1,402 |
15% = $1,001 |
15% = $1,679 |
15% = $925 |
NPV = Net Present Value
Program A IRR |
Program B IRR |
Program C IRR |
Program D IRR |
---|---|---|---|
42% |
40% |
36% |
33% |
IRR = Internal Rate of Return
Based on this information, you recommend that your company select—
1. | a | b | c | d |
2. | a | b | c | d |
3. | a | b | c | d |
4. | a | b | c | d |
5. | a | b | c | d |
6. | a | b | c | d |
7. | a | b | c | d |
8. | a | b | c | d |
9. | a | b | c | d |
10. | a | b | c | d |
11. | a | b | c | d |
12. | a | b | c | d |
13. | a | b | c | d |
14. | a | b | c | d |
15. | a | b | c | d |
16. | a | b | c | d |
17. | a | b | c | d |
18. | a | b | c | d |
19. | a | b | c | d |
20. | a | b | c | d |
1. d. | Greater benefits would result The purpose of managing projects, subprograms, and program activities as a program is to realize more benefits than if they were managed individually. PMI®, The Standard for Program Management, 2013, 4 |
2. d. | Benefits and outcomes may affect the entire organization Organizations initiate programs to deliver benefits and accomplish agreed-upon outcomes that may affect the entire organization. PMI®, The Standard for Program Management, 2013, 26 |
3. a. | Timelines As an organization manages its portfolio, programs are influenced by portfolio needs, one of which is timelines. Others include organizational strategy and objectives, benefits, funding allocations, requirements and constraints. PMI®, The Standard for Program Management, 2013, 10–11 |
4. b. | Exploit strategic opportunities for change To maximize the program’s realization of benefits for the organization, it is necessary to exploit strategic opportunities for change. PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 7 |
5. c. | Have a business case and a program mandate Before a program can be chartered, the business case and program mandate must be approved by organizational leadership. PMI®, The Standard for Program Management, 2013, 28 |
6. d. | Prepared a feasibility study The feasibility study builds on the business case, organizational goals, and existing initiatives to assess the organization’s finance, sourcing, complexity, and constraint profile; therefore, it contributes to the information available to decision makers in program selection. PMI®, The Standard for Program Management, 2013, 31 |
7. c. | Has an emphasis to harmonize project and program components Organizational Project Management is a strategy executing framework that uses project, program, and portfolio management and organizational enablers to predictably and consistently deliver organizational strategy. In program management, the emphasis is to harmonize project and program components and control interdependencies to realize benefits. PMI®, The Standard for Program Management, 2013, 7–8 |
8. a. | Program plan A program plan is prepared in Program Strategy Alignment. Among other things, it defines how and when the goals of the program will be pursued in each program component. PMI®, The Standard for Program Management, 2013, 29 |
9. b. | Intrinsic benefits This scenario is an example of an internal program. The business case contains a number of items, one of which is intrinsic and extrinsic benefits. As an internal program, intrinsic benefits should be part of the business case. PMI®, The Standard for Program Management, 2013, 28 |
10. c. | A catalyst for change Internal programs, such as the one in this question, are enterprise-wide process improvement programs and are undertaken by the organization as a catalyst for change. PMI®, The Standard for Program Management, 2013, 27 |
11. a. | A program vision The vision describes the future state of the program. It also acts as a constant reminder of the objectives of the program and its intended benefits. PMI®, The Standard for Program Management, 2013, 28 |
12. b. | Benefits Program selection criteria and materials may range from vague and informal to detailed, specific, and formal. Programs are established to deliver more benefits than if the projects, subprograms, and other work were managed as standalone activities. PMI®, The Standard for Program Management, 2013, 4 PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 6 |
13. b. | Regulatory issues In considering whether to select or approve a program, in this situation, regulatory approval would be required; therefore, the objectives must be evaluated relative to regulatory and legal constraints. PMI®, The Standard for Program Management, 2013, 31 PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 6 |
14. b. | What are the funding requirements? Enterprise environmental factors influence the selection decision even if they are outside of the program; funding is a key example. PMI®, The Standard for Program Management, 2013, 30 PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 6 |
15. b. | Define your program mission statement The mission statement describes the purpose of the program and states the reason the program exists. PMI®, The Standard for Program Management, 2013, 28 PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 6 |
16. a. | Show “what-if” analysis Comparative advantage analysis is used to assess the validity of the business case. The business case includes analysis and comparison against real or hypothetical efforts, including “what-if” analysis to show how the program’s objectives and intended benefits may be achieved by other means. PMI®, The Standard for Program Management, 2013, 31 |
17. b. | Identify and receive commitment of key resources needed for planning Once the organizational leadership has approved the program, it then is necessary to identify and evaluate integration opportunities and needs. This identification includes human capital and human resource requirements as resources will be needed in initiating the program and for planning it. The people who will plan the program will not necessarily end up on the core program team. PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 6 |
18. c. | Helps to develop the program charter SWOT analysis is a type of environmental analysis that can be conducted. It provides information useful in developing the program charter and program plan. PMI®, The Standard for Program Management, 2013, 31 |
19. c. | Program C In using net present value (NPV) as a selection criterion, a dollar one year from now is worth less than a dollar today. The more the future is discounted (higher discount rate), the less the NPV of the program. If the NPV is high, then the program is rated high. In this situation, you would select Program C. PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 6 Milosevic, Dragan Z. 2003. Project Management ToolBox: Tools and Techniques for the Practicing Project Manager. Hoboken, NJ: John Wiley & Sons, Inc., 42–44 |
20. a. | Program A The Internal Rate of Return (IRR) is the discount rate where the NPV for the cash flow is zero. There is no closed-form formula for it. IRR is computed iteratively and “hone’s in” on the exact discount rate that produces a NPV of zero. Most spreadsheet software can calculate it. Given the data in this question, Program A is superior to the others. While the IRR discounts future values, it does not consider the size of a program. PMI®. Program Management Professional (PgMP)® Examination Content Outline, April 2011, 6 Milosevic, 2003, 44–45 |
*Please note that Strategic Program Management is titled Program Strategy Alignment as a domain described in The Standard for Program Management—Third Edition (2013); (hereafter referred to as The Standard); however, we are using the term Strategic Program Management in this book since it is one of the five domains in the Examination Content Outline (2011) that makes up the exam. Nonetheless, a wealth of information from The Standard appears in the questions in this part of the exam.
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