48 ◾ PfMP® Exam Practice Tests and Study Guide
portfolio mix to reach these goals are assessed, The benets of each component
also are emphasized and tracked for the optimum value Another area of empha-
sis is providing the governance group and other key stakeholders with metrics to
determine if the organizational strategy will be met. As well, the metrics provide
sponsors and component managers the details on how their components are
doing in the context of others in the portfolio as the goal is to ensure the port-
folio consists of the components that will create the greatest value given avail-
able resources.
Selection of appropriate metrics is based on the areas of importance to each
organization, and a goal is to have a few key metrics that can be easily analyzed
and used. They are ones that follow the SMART (specic, measurable, attainable
realistic and time based) approach. It therefore is useful to have an easy- to- use
portfolio management information system and to focus on capacity and capabil-
ity analysis
As the plan is prepared, a number of people are involved, and templates and
examples are included for performance measures and targets. These key perfor-
mance indicators (KPIs) then report on the progress of the portfolio as well as
future indicators.
In the Aligning Process group, managing supply and demand is critical.
Review Figure6-4 in The Standard and recognize the usefulness of a mas-
ter schedule of resource allocation. Supply, as used in The Standard, involves
resource capacity, recognizing resources are more than just people, while
Demand is the resource requirements from proposed and existing components
in the portfolio. It is essential to minimize unused capacity and demand, and
balance resources according to priorities since resources are constrained in most
organizations. Optimal monitoring of the supply and demand then is critical to
portfolio success. Scenario analysis, quantitative and qualitative analysis, and
capability and capacity analysis are used, and through this process updates to the
portfolio are expected.
This knowledge area also involves Managing Portfolio Value, and it is
expressed in different ways by organizations. A best practice is to use a value
measurement framework to organize how value will be created and measured,
considering both tangible and intangible metrics. The expected value from each
component in the portfolio is measured throughout its life cycle to see if changes
are warranted to achieve greater benets. The objective is to ensure through
the current work is in the portfolio, objectives are being achieved, and value
estimates are established, focusing on continuous improvement of the value
measurement framework, Recommendations for change to the portfolio manage-
ment mix are expected through this process. Study Figure6-9 as an example of
a performance variance report that may be used, along with Figure6-10 for a
benets realization plan. Changes in weighting for scoring performance also may
be necessary, as shown in Figures6-11 and 6-12. Value scoring and measurement
analysis and benets realization analysis are used. Not to be overlooked is the
usefulness of the portfolio efcient frontier, as shown in Figure6-13 as a tool to