23
Governance
Study Hints
The Governance questions on the PfMP
®
certication exam constitute 20% of the
exam or 34 questions.
These questions are part of the Portfolio Governance Management Knowledge
area as well as in the Dening, Aligning, and Monitoring and Controlling Process
Groups in The Standard for Portfolio Management—Third Edition (2013). There
are ve processes in Portfolio Governance Management:
1. Develop Portfolio Management Plan
2. Dene Portfolio
3. Optimize Portfolio
4. Authorize Portfolio
5. Provide Portfolio Oversight
The rst two processes are from the Dening Process Group, Optimize Portfolio
is in the Aligning Process Group, and the last two are in the Authorizing and
Controlling Process Group.
Effective governance is necessary for portfolio success. Some type of oversight
group, such as a Portfolio Review Board, is required for decision making and to
ensure the investments analysis is performed to achieve performance targets for
the organization.
As the portfolio management plan is developed, it focuses on alignment with
the portfolio strategic plan, the charter, and the roadmap. It also draws upon
portfolio process assets, organizational process assets, and enterprise environ-
mental factors. As with any plan, it is not a one- time undertaking and is an
iterative. This plan also includes as subsidiary plans the performance, risk, pro-
curement, and communications plans. The overall purpose of the plan is to show
how the portfolio is dened, organized, optimized, and controlled. Since this
plan is critical, it is developed by using a number of tools and techniques. For
example, elicitation techniques are used to determine requirements from a vari-
ety of sources such as using focus groups and brainstorming sessions, interviews,
24 ◾ PfMP® Exam Practice Tests and Study Guide
surveys to involve more stakeholders, and collaboration techniques to poll inputs
as a team for consensus, Another useful technique is portfolio organizational
structure analysis, as roles and responsibilities for portfolio management need to
be determined and assigned.
The portfolio management plan then includes a number of key sections as
it explains the governance model to be used, how portfolio oversight will be
conducted, describes how the portfolio manager will respond to changes in
strategy at the organizational level, and how change control and management
will be handled. It also focuses on how the portfolio will be balanced so the mix
of components is optimized, and resources are allocated effectively. It further
describes any necessary compliance with legislation and the use of the portfolio
prioritization model.
Also in the Dening Process Group, an up- to- date list of components in the
portfolio is prepared and maintained in the Dene Portfolio process. The goal
is to ensure resources and investments are focused on those components which
have the greatest business value. The portfolio tends to be set up in organization
areas and by doing so, common evaluation lters can be developed for evalu-
ation, selection, and prioritization. Qualitative and quantitative information is
gathered for each component in the portfolio enabling the organization to bal-
ance investments and risks. This process focuses on an evaluation and denition
process to promote benets to be realized by components that are strategically
aligned. This process requires a portfolio inventory, which includes descriptive
information about each category in the portfolio. Specic evaluation criteria to
best support the overall organizational strategy also are determined. Therefore,
components are assigned to categories, and weighted ranking and scoring tech-
niques are used. The goal of the scoring models is to evaluate components
in a comparable way for effective decision making by the governance over-
sight group.
Moving to the Aligning Process Group, the Optimize Portfolio process optimizes
and balances the portfolio with the goal of performance and value delivery. It
evaluates trade- offs of portfolio objectives, managing risks versus return, and
balancing short- term and long- term goals. Then, limited resources are balanced
across the portfolio reecting the priorities that are set. Components are bal-
anced with one another in the same category to address different concerns and
strategies. Capacity and capability analyses, quantitative and qualitative analyses,
weighted ranking and scoring techniques, graphical analysis methods are used.
Review Figures5-11 and 5-12 for examples.
In Monitoring and Controlling, the focus shifts as the portfolio is ofcially
authorized, components are activated, and changes are communicated to affected
stakeholders. Resources are ofcially allocated to these components. A portfo-
lio management information system is used. The Portfolio Oversight process
monitors the portfolio to ensure continual alignment and to assess if changes
are required for greater business value. The Portfolio Oversight Group and the
Governance ◾ 25
portfolio manager review information on the components, governance meetings
are held, and changes are made based on the results if there are updates to
the portfolio.
Following is a list of the major topics in the Governance domain. Use this
list to focus your study efforts on the areas that are most likely to appear on
the exam.
26 ◾ PfMP® Exam Practice Tests and Study Guide
Major Topics
Portfolio governance management purpose
Dening Process Group
Aligning Process Group
Monitoring and Controlling Process Group
Develop Portfolio Management Plan process
◾ Purpose
◾ Inputs
− Portfolio strategic plan
• Organizational risk tolerance
• Communication strategy
• Performance strategy
− Portfolio charter
• Scope, resources, timeline
• Stakeholder communications requirements
• Performance expectations
• Key risks, dependencies, constraints
− Portfolio roadmap
• High- level strategic direction
• Extended timelines
• Dependencies
− Portfolio process assets
• Policies, procedures, knowledge bases
• Performance information
• Decisions and open issues
• Ongoing and planned tasks
− Organizational process assets
• Policies, procedures, knowledge bases
− Enterprise environmental factors
• Governance processes
• Corporate, economic, governmental variables
◾ Tools and techniques
− Elicitation techniques
• Facilitation—focus groups and brainstorming
• Surveys—interviews and observations
• Collaboration—polls for consensus
− Portfolio organization structure analysis
• Roles and responsibilities
− Integration of portfolio plans
• Risk, communications, performance
Governance ◾ 27
◾ Outputs
− Updates to the portfolio strategic plan and portfolio process assets
− Portfolio management plan
• Governance model
• Portfolio oversight
• Managing strategic change
• Change control and management
• Balancing and managing dependencies
• Subsidiary plans—performance, communications, risk, and procurement
• Compliance management
• Portfolio prioritization model
Dene Portfolio
◾ Purpose
◾ Inputs
− Portfolio strategic plan
• Alignment with strategy
• Prioritization model
− Portfolio charter
• Identies the portfolio
− Portfolio
• Portfolio components
− Portfolio roadmap
• Summarizes strategic objectives
• Identication, categories, ranking and scoring techniques
− Portfolio management plan
• Management approach
• Guidance to evaluate components
− Portfolio process assets
• Templates, tools, data, information and guidance
◾ Tools and techniques
− Evaluation criteria
− Portfolio component inventory
• Descriptors and evaluation criteria
− Portfolio component categorization techniques
− Weighted ranking and scoring techniques
• Single criterion
• Multiple criteria weighted ranking
• Multi- criteria scoring model
◾ Outputs
− Updates
• Portfolio
• Roadmap
• Portfolio management plan
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