28 ◾ PfMP® Exam Practice Tests and Study Guide
Optimize Portfolio
◾ Purpose
◾ Inputs
− Portfolio
• Active components and inactive ones for resource allocation
− Roadmap
• ‘To- be’ state to guide optimization
− Portfolio management plan
• Approach to dene, optimize, and authorize components
− Portfolio reports
• Risks resource pool data, capability and capacity
− Portfolio process assets
• Data, tools, templates, information
◾ Tools and techniques
− List of components for prioritization
− Capability and capacity analysis
• Human, nancial and asset
− Quantitative and qualitative analysis
• Cost- benet
• Spreadsheets—resource loading or cash ow
• Scenario
• Probability
• Strengths, weaknesses, opportunities, and threats (SWOT)
• Market/ competitor
• Business value
− Graphical analysis
• Risk vs. return
• Pie charts
• Bubble graphs
◾ Outputs
− Updates
• Portfolio
• Roadmap
• Portfolio management plan
• Portfolio reports
• Portfolio process assets
Authorize Portfolio
◾ Purpose
◾ Inputs
− Portfolio
• Previous approved components requiring authorization
Governance ◾ 29
− Portfolio management plan
• Process to authorize components and allocate/ reallocate resources
− Portfolio reports
• Financial, resources, governance decisions
• Resources—human, shared assets, nancial
◾ Tools and techniques
− Authorization technique activities
− Portfolio management information system
• Show components with assigned resources
◾ Outputs
− Updates
• Portfolio
• Portfolio management plan
• Portfolio process assets
− Reports
• Resources, assets, governance decisions
Provide Portfolio Oversight
◾ Purpose
◾ Inputs
− Portfolio
• Current or planned components and organizational strategy
− Roadmap
• Integrated view of strategy
− Portfolio management plan
• Overall portfolio approach to meet organizational strategy
− Portfolio reports
• Performance, resource capability/ capacity, risks/ issues, nancial
− Portfolio process assets
• Policies, processes, procedures, knowledge bases
• Historical performance information, governance decisions, open issues
◾ Tools and techniques
− Portfolio review meetings
• At specied milestones or triggered by external events
− Elicitation techniques
• Compiling status reports, facilitating meetings, questionnaires, surveys
◾ Outputs
− Updates
• Portfolio
• Portfolio management plan
• Portfolio process assets
• Portfolio reports
Governance ◾ 31
Practice Questions
INSTRUCTIONS: Note the most suitable answer for each multiple- choice
question in the appropriate space on the answer sheet.
1. Your organization adopted a management- by projects culture ve years ago,
and at that time, the CEO set up an Enterprise Project Management Ofce.
Last year, it received the PMO of the Year Award. Now that the organization
is moving into portfolio management, the leader ship team decided to estab-
lish a Portfolio Management Ofce, and you were selected to manage it.
One reason why it felt a Portfolio Management Ofce should be set up even
though the EPMO was working so effectively is that:
a. It highlights the need for a centralized and structured Governance Board
and process
b. It assists the Governance Board by supporting component proposals and
evaluations
c. In addition to providing guidance on the practice of portfolio manage-
ment, it also supports component execution
d. It provides project and program process information to the Governance
Board
2. As you work to implement portfolio management in your global nancial
company, the members of the Portfolio Review Board and other key stake-
holders will not be collocated. Meetings will be virtual ones with a variety
of social media used for communications regarding the portfolio process,
the artifacts, component proposals, reports, and terminations. An example of
an enterprise environmental factor as you prepare the portfolio performance
plan is:
a. Organizational culture
b. Asset capacity
c. Managing compliance with legislation
d. Pre- determined risk prole
32 ◾ PfMP® Exam Practice Tests and Study Guide
3. Fortunately, your organization recognized that for portfolio management to
be effective, it needed to be managed by someone who was independent of
the PMO. It also established a Portfolio Oversight Group with the CEO as its
Chair and the heads of the Business Units as its members. While the group
has numerous functions, not to be overlooked is making governance deci-
sions in terms of:
a. Stage gates
b. Regulatory compliance
c. Risks and issues
d. Stakeholder management
4. One of the reasons your CEO is interested in setting up portfolio manage-
ment in your consulting company is that he came from a background in
new product development in which gate reviews were a common prac-
tice. However, portfolio management is a new concept in your consulting
company as its work is received through competitive bids on proposals or
through customer referrals. You also worked in portfolio management with
the CEO at the other organization so were hired as the portfolio manager.
You are establishing specic decision- making rights and authorities and roles
and responsibilities that are needed to manage progress based on:
a. Benet realization
b. Key performance indicators
c. Critical success factors
d. Portfolio risk
5. The Chief Financial Ofcer is a key stakeholder and is a member of your
company’s Portfolio Review Board. He ensures before each Board meeting
that tangible, accurate, and up- to- date nancial information is available as
portfolio selection and prioritization decisions are made The purpose for his
active involvement is to:
a. Compare project spending with the allocated budget
b. Ensure the projected nancial benets are quantiable and delivered
c. Provide value- for money analyses
d. Determine if the proposed component will provide sufcient benets to
then acquire external resources to perform it
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