Monday, November 27, 2023

Portfolio Management and Benefits Dependency Map


While interacting with aspiring Portfolio Management Professionals (PfMP), some of the questions that come-up are these:

  • Why should a Portfolio be worried about benefits and benefits management?
  • Is not benefits management part of a Program with a dedicated domain?


Also, in the PMBOK Guide, 6th edition as well as 7th edition, benefits management has been informed in many places! Indeed, in the PMBOK Guide, 6th edition aspiring Project Management Professionals (PMP) specifically need to know about the Project Benefits Management Plan, which acts as input while building the project charter.

In addition, (Project/Product) Managers and Scrum Master speak mostly in terms of features, not benefits! In this article we will understand the importance of benefits and its significance in portfolio management. 

Features Vs. Benefits

First the key distinction between features and benefits:

A feature is something available in a product or service, whereas a benefit is something you gain from the product or service.

Let's take a few examples to understand:

  1. A chatbot in a Web-Site is a feature, but the 40% reduction in customer response time due to the chatbot is a benefit.
  2. Spell-check is a feature in a word-crunching software, but error-free document built with the software is a benefit. 
  3. Taking a day-to-day example, reverse-osmosis (RO) in a water-purifier is a feature, but drinkable and much better quality water because of the RO are benefits.

So, while features are needed and prioritized depending on the framework/methodology followed, customers or buyers only understand in terms of benefits. Isn’t it? 

For example, when you buy a water-purifier with RO functionality, your first question is this – “how does it benefit me?” You, as a customer, are not much worried about the technicalities or nitty-gritties of RO, but really care about the benefits before you make the purchase decision. In fact, for any product you buy, you actually look for benefits coming from the features provided in the prouct!

So, benefits are important not only for project or program management, but also portfolio management. 

Benefits Realization and Portfolio Manager

As a portfolio manager, you need to clearly know both the fiscal and non-fiscal benefits to your organization. Of course, you must have a sound understanding of your organization’s vision, mission, goals, strategies and associated objectives. This will help you to understand not only benefits management, but also aid in benefits realization and optimization of benefits realization. 

Specifically considering portfolio benefits, portfolio value is delivered when benefits coming from portfolio components (e.g., projects, programs, operations) are realized in the hands of portfolio beneficiaries such as customers. Value is generated when beneficiaries use the benefits. And I can’t emphasize the below figure enough.  

As shown above, benefits translate to value. And it’s this value that your organization gets when the customer pays for its worth.

Now, a portfolio manager must understand how to relate an organization's strategic goals, objectives (or simply strategic objectives) and priorities with the portfolio component plans such as project or program management plan to achieve the organization’s strategic objectives. 

But why and how so?

The answer to it lies in the Benefits Dependency Map (BDM). The benefits dependency map is also called the Benefits Break-down Structure (BBS).  

The Benefits Dependency Map 

The vision (future state) and mission (purpose) of an organization along with the strategic objectives of an organization are documented in the Organization's Strategic Plan. Some of these strategic objectives are met by a portfolio and they are documented in the Portfolio Strategic Plan.

When you build the BDM/BBS, your starting point will be from the vision, mission and strategic objectives leading to benefits. This is shown below. 

As shown in the above figure, the vision and mission lead to the strategic objectives of an organization. Each strategic objective of an organization will be met when the benefits are delivered. In our case:

  • Strategic Objective 1 is achieved when Benefit 1, Benefit 2 and Benefit 3 are delivered.
  • Similarly, Strategic Objective 2 and Strategic Objective 3 will be achieved when the associated benefits are delivered.

These are noted in the Portfolio Benefits Realization Plan and/or the Portfolio Performance Variance Report, which is one of the key Portfolio Reports

But then, who delivers these benefits? 

The benefits are delivered by the portfolio component programs and component projects. 

Remember that a program is a set of interrelated projects or subprograms managed together to give you benefits, which is otherwise not possible if you manage them independently. And a project is a temporary endeavor which gives a unique product, service or result (output).

So, we are going to expand our previous BDM figure.

"How-Why" Logic of Benefits Dependency Map

I’ve expanded the previous, initial-cut BDM to include the outcomes and outputs. It’s depicted below.

As shown above:

  • Benefit 1 will be achieved with one outcome coming from the output, i.e., from a project, program or subprogram.
  • Benefit 2 will be achieved with three outcomes coming from three outputs – again from project or program.
  • Benefit 3 will be achieved with two outcomes coming from two outputs – again from project or program.

As you move from left to right in the above BDM, the question is "how", i.e., how will this strategic objective be met with these benefits? But when you move from right to left, the validity of the BDM is verified by asking the question “Why?”. For example, why should we take this component project. 

This "how-why" logic helps to structure the map. This also clearly shows the link between your organization's delivery capability with projects and strategic objectives.

To know more on benefits, outcomes and outputs, you can refer to this article of Fundamentals of Value-Driven Delivery. Though this linked article is with respect to projects using Lean/Agile approaches such as Scrum or Kanban, the fundamental concepts are very much applicable for waterfall or hybrid projects.

Final Words

So, there it is! 

At the portfolio level, we also talk about benefits, benefits management and benefits realization, because only at the portfolio level we make decisions on which component to take, drop, suspend or resume based on the expected benefits from the components. 

These benefits help in achieving the organization’s strategic business objectives, which in turn helps in meeting the vision and mission of the organization. 


References

[1] NEW Book – I Want To Be A PfMP, the plain and simple way, by Satya Narayan Dash

[2] The Standard for Portfolio Management, by Project Management Institute (PMI)




Sunday, November 12, 2023

From PMP, PgMP to PfMP: Project and Program Risk Management Vs. Portfolio Risk Management


Project and Program Risk Management when compared with Portfolio Risk Management will have many fundamental differences. Indeed, there are a large number of differences that you have to know, if you are coming from a project management or program management background. 

Many of my course and/or book subscribers are Project Management Professionals (PMP®), Risk Management Professionals (RMP®) and some of them want to pursue Portfolio Management Professional (PfMP®) certification. There are also aspiring PfMPs, who don’t have any other formal project or risk management certifications, but they understand risk management. As I spoke in a recent international webinar one can directly go for PfMP, without being a PMP or (Program Management Professional (PgMP®).

In this article I’ll elaborate on a number of differences between project risk management and portfolio risk management. To have a basic understanding of portfolio risk management, I'd recommend that you read the following article.

PfMP Exam Prep: Fundamentals of Portfolio Risk Management

This article is for both PMPs or PgMPs who want to be PfMPs and also for professionals and practitioners who directly aspire to be PfMPs. Again, you need NOT be a PMP, PgMP (or RMP) to be a PfMP as this article informs.

Now, let's see the differences. These are fundamentals and will be very useful for your PfMP exam.

Difference  1: The Definitions

The differences start with the definitions. And the differences can’t be more contrasting! 

The definition of a project risk is as follows:

An individual project Risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.

On the other hand, the definition of a portfolio risk is:

A portfolio risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more strategic business objectives of a portfolio.

Did you notice the differences? While the former is about project objectives, the latter is about strategic business objectives. These can also be with respect to the success criteria of the portfolio, which are documented in the Portfolio Charter.

Difference – 2: Risks and Components

A project will have deliverables, whereas a portfolio can have components such as projects, programs, operations, business cases etc. 

Project risks (individual or overall) are ONLY about the project or any other sources of uncertainties impacting the project objectives. You can learn more on individual and overall project risks in this article.

On the other hand, in portfolio risk management, we consider risks arising out of the components. For example, when a project risk can’t be addressed at the project level and the project manager believes it can be addressed at the portfolio level (and it’s accepted at that level), then the risk will be escalated and managed at the portfolio level.

In fact, in portfolio risk management, we build the Portfolio Risk Component Chart, which is not applicable in project risk management.

Difference – 3: Interdependencies

In a portfolio, the components will have interdependencies, which can be visualized with Portfolio Roadmap. Risk management becomes critical and crucial when there are interdependencies among high-priority components. In such a scenario, the cost of failure of a portfolio component can significantly impact other components.

In project management, however, we don’t have any interdependencies among components, though there can be dependencies among the deliverables. These will be addressed by overall project risk. Remember that overall project risk is the effect of uncertainty on the project as a whole, arising from all sources of uncertainty including individual risks. 

Difference – 4: Maximizing Opportunities, Minimizing Threats Vs. Maximizing Financial Value

Project risk management is primarily about increasing the probability and/or impact of positive risks and decreasing the probability and/or impact of negative risks in order to optimize/increase project success. One can also say project or program risk management is concerned mostly about risks that arise with a project or program. 

However, a portfolio will have components such as projects and programs. Hence, a portfolio is concerned about:

a) Maximizing portfolio’s financial value,

b) Tailoring its fit into organizational strategy, and 

c) Balancing the portfolio components.

One can also say that portfolio risk management is about increasing the probability and/or impact of positive risks and decreasing the probability and/or impact of negative risks in order to increase the portfolio value, strategic fitness and balance of the portfolio. 

Again, can you notice the differences? Aren’t they very different?

Difference – 5: Contingency Reserve

I’ve written a number of articles on contingency reserve and management reserve. I’ve also informed the myths and facts about these reserves

Specifically considering contingency reserve, contingency reserve is at the individual project level. The earlier linked article informs more on its calculation, which happens during quantitative risk analysis.

However, for portfolio management, you as the portfolio manager have to provide contingency reserves across a pool of component projects and programs. 

Difference – 6: Equity Protection

This is another term, which you will come across for the first time in portfolio management, unless you have some prior understanding in financial management. Usually, it’s by financial asset management or insurance companies.

As noted, Equity Protection is a distinct concept in Portfolio Risk Management. This for all constituent projects and programs. The portfolio management holds an aggregate contingency reserve for all the components. These are usually for risks with low probability, but high impact. 

In project or program risk management, we don’t have any such concepts of equity protection. In portfolio management, equity protection can be for both threats (negative risks) and opportunities (positive risks).

Difference – 7: Risk Management Processes

On of the biggest confusions for professionals coming with PMP, PgMP or RMP certification is with respect to the risk management processes and how they interact with each other.

In project risk management, going by the PMBOK® Guide, one can find seven processes, which are:

  • Plan Risk Management,
  • Identify Risks,
  • Perform Qualitative Risk Analysis,
  • Perform Quantitative Risk Analysis,
  • Plan Risk Responses,
  • Implement Risk Responses, and
  • Monitor Risks.

However, considering the Standard for Portfolio Management®, there are only two processes! 

  • Develop Portfolio Risk Management Plan, and 
  • Manage Portfolio Risks.

Now, as an aspiring PfMP you may be thinking the risk management planning happens in Develop Portfolio Risk Management Plan process. You are right! But then:

  • What about risk identification, qualification and quantification?
  • Where the risk responses are planned and implemented?
  • How to monitor so many risks (because we are also considering component risks)? 

This is where the understanding has to be very clear. Briefly put risk management planning, qualification, quantification, response planning and implementation as well as risk monitoring (controlling is the word used in Portfolio Management Standard) are covered in the above two processes of portfolio management. There are some overlaps, too! These are covered in-depth with a number of diagrams in my new book: I Want To Be A PfMP.

There are many other differences such as with respect to Risk Register, Issue Register (and the processes in which they are created), risk owner, risk response/action owners as analysis such as Monte Carlo analysis, among others. These are also covered in the book.

Nevertheless, I believe with the above seven differences between project/program risk management and portfolio risk management, you have understood the basics. As you would have realized by this time, they are quite different, though the foundational aspects of risk management permeate in all – be it project risk management, program risk management or portfolio risk management. 


References:

[1] NEW Book - I Want To Be A PfMP, The Plain and Simple Way, by Satya Narayan Dash

[2] Book - I Want To Be A PMP, The Plain and Simple Way, 2nd editionby Satya Narayan Dash

[3] Book - I Want To Be A RMP, The Plain and Simple Way, 2nd editionby Satya Narayan Dash

[4] Article – PfMP Exam Prep: Fundamentals of Portfolio Risk Management, by Satya Narayan Dash

[5] Standards for Portfolio Management (multiple portfolio management standards referred), by Project Management Institute (PMI)



Sunday, November 05, 2023

Upcoming Webinar: 5 Must-Dos (Knows) To Be A PMI Portfolio Management Professional (PfMP)


In a recent article on benefits of Portfolio Management Professional Certification (PfMP), I outlined top reasons of having this certification. At a high-level, they are:

  1. PfMP certification is the highest-level credential offered by PMI. It shines in your resume.
  2. With Portfolio Management, you are directly responsible for achieving your organization's strategic business objectives.
  3. Project and Program Management are about “doing the work right”, whereas Portfolio Management is about “doing the right work”.
  4. The PfMP credential is considered to be an elite certification by top professionals.
  5. With the right book and/or course, you will know hands-on portfolio management in the real-world.
  6. Without strategic execution, organizations just fire and forget. PfMP ensures that you fire the bullets and ensure that the bullets meet the target.
  7. You need not be a PMP or PgMP to be a PfMP. But if you are a PfMP, you will know PMP and PgMP content to an extent.
  8. You will know governance at the highest level. There is a dedicated knowledge area: Portfolio Governance Management.
  9. If you are a PMP, RMP and/or ACP, then your understanding of Risk Management will be very helpful for Portfolio Risk Management.
In another recent article, I wrote doing only project or program management, but avoiding or not knowing portfolio management is like putting the cart before the horse! 

Can you move your wagon properly with that approach? 

Of course, you can’t! An organization is also similar. Without knowing the vision, mission, goals and strategic objectives of an organization and doing random projects and programs doesn’t take the organization forward. 

However, to be a PfMP certified professional, it’s easier said than done. You not only need to have real-world portfolio management experience, you need to have a strategic mindset. As a matter of fact, there is a dedicated knowledge area named Portfolio Strategic Management.

The below PMI fact file gives the following numbers on various certifications.

As you can see, while PMP, ACP, RMP, PgMP and PBA are in large numbers, PfMP is not much because many organizations don’t know how to pursue strategic management and get value out of it.  Also, the number tells PfMP is truly an elite certification. 

At this stage I must say that the PfMP certification is achievable. You too can do it! As noted earlier in one of the top reasons, with PfMP certification you are going to operate at the highest level of the organization pursuing strategic management.  

In my upcoming webinar conducted by Microsoft Project User Group (MPUG), we will discuss the followings:

  • Why should you pursue PfMP?
  • What’s the value of PfMP as you grow in your career?
  • PfMP Exam Domains
  • PfMP Exam Content Outline (ECO)
  • Five Must-Dos (Knows) to be a PMI-PfMP

On the first four items, we will have a brief discussion. On the final point of Five Must-Dos to be a PfMP, we will have a detailed discussion. 

Event Details

Date: 8th November, 2023, Wednesday

Time: 12 PM to 1 PM EST (10:30 PM to 11:30 PM IST)

Registration Link: https://www.mpug.com/event/5-must-dos-or-must-knows-to-be-a-pfmp/


Hope you join me in this unique event.


Thursday, October 26, 2023

A Comprehensive Guide to Achieve PfMP Certification: ‘I Want To Be A PfMP’ Book by Satya Narayan Dash

By Shahpour Kakaei, PgMP, PMP, ACP, RMP, ITIL, Attended Harvard Business School



Introduction

I Want To Be A PfMP by Satya Narayan Dash is an exceptional book that serves as a comprehensive guide for professionals aspiring to achieve the Professional in Portfolio Management (PfMP) certification. Recently released, this book offers valuable insights, practical advice, and a structured approach to help individuals navigate the complex world of portfolio management.

Engaging and Informative Content

Dash's book stands out due to its engaging writing style and the author's ability to simplify complex concepts. The content is well-structured, making it easy for readers to follow along and grasp the key principles of portfolio management. Dash's extensive experience in the field shines through, as he provides real-world examples and case studies that further enhance the book's practicality.

PfMP Book–I Want To be A PfMP, Why to Go for It?

Following are the key aspects of the book.

1) Comprehensive Coverage

The "I Want to be a PfMP" book covers all aspects of the PfMP certification process, from understanding the portfolio management framework to preparing for the exam.

Dash leaves no stone unturned, addressing topics such as portfolio governance, strategic alignment, risk management, and resource optimization. The book also delves into the five domains of portfolio management, providing a holistic understanding of the subject matter.

2) Practical Tips and Techniques

One of the book's greatest strengths lies in its inclusion of practical tips and techniques. Dash offers valuable advice on how to effectively manage portfolios, align them with organizational objectives, and overcome common challenges. The author's emphasis on the importance of strategic thinking, financial management, and stakeholder engagement adds a unique dimension to the book, making it more than just a study guide.

3) Clear and Concise Language

Dash's writing style is clear, concise, and accessible to both experienced portfolio managers and those new to the field. The author avoids unnecessary jargon, ensuring that readers can easily comprehend and apply the concepts discussed. This approach makes the book an excellent resource for self-study or as a reference guide for professionals already working in portfolio management

Below topics are helped that will help you the most:

  • Strategic management, governance management, process interactions, ITTOs and their highlighting, key aspects of every process etc.
  • Practical Exercises and Exam Preparation:
    To further enhance the learning experience, "I Want To Be A PfMP" book includes practical exercises and sample questions that mirror the PfMP certification exam (chapter end questions, full length questions). These exercises allow readers to apply the knowledge gained and assess their understanding of the material. Dash's guidance on exam preparation strategies, including study plans and test-taking tips, is invaluable for those seeking to pass the PfMP certification exam with confidence.
  • Video sets: A number of videos are given in addition of the book context, which among them the videos of  Chapter 3, 4, 6 and 8 ( on subjects of “Portfolio Management Processes, and ITTOs”, “Earn Value Management”, Monte Carlo Analysis” and “Risk Management”) are very helpful to better understand these subjects. 

Other areas, which I found helpful are:  

  • Practical tools snapshots of MS Project-Portfolio Management, Primavera Portfolio Management (Portfolio Efficient Frontier), Primavera Risk etc, along with the videos. 
  • Examples with real-world roadmap, key contents of documents etc. 
  • The exam tips, revision tips and also set of tips in the end are very helpful.

Chapters in the Book – I Want To be A PfMP

The book has multiple chapters - from Welcome, Chapter 1 to Chapter 10. The last two chapters specifically regarding a complete set of PfMP Exam preparations questions/answers and tips. 

Each chapter provides full details of the chapter subject (as noted earlier along with flow and interactions of processes) which are unique and can’t be found so comprehensive and simplified in other similar references for PfMP preparation.  

Conclusion

I Want To Be A PfMP book by Satya Narayan Dash is an outstanding one that provides a comprehensive and practical guide to achieving the PfMP certification. 

Dash's expertise, combined with his engaging writing style, ensures that readers gain a deep understanding of portfolio management principles and their application. 

Whether you are a seasoned portfolio manager or aspiring to enter the field, this book is an essential resource that will undoubtedly contribute to your professional growth.

Brief Profile: Shahpour Kakaei, BD and Operations Manager, AWITEL INC, Canada


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If you are want to buy or have any queries on  this book, please send an email to managementyogi@gmail.com

New Book Available for PfMP Exam:


Articles Referring to the PfMP Book:


Thursday, October 19, 2023

Top Nine Reasons To Go For PMI-PfMP Certification


While interacting with aspiring Portfolio Management Professionals (PMI®-PfMP®), a number of questions come up. Usually, the frequent ones are the followings:

In this article, I’ll outline 9 top reasons to go for PfMP certification. There can and will be other reasons. If you know and want to share your thoughts, please do so in the comment section of this article.

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Reason – 1: PfMP certification is the highest-level credential offered by PMI. It shines in your resume.

The Project Management Institute (PMI®) is a leading management institute recognized within the professional management community. 

There are many certifications offered by PMI such as PMP, RMP, ACP, PBA, CAPM, PgMP. But the highest one is PfMP. Hence, have no doubt in your mind that it’s considered to be the top-most certification offered by PMI. 

Reason – 2: With Portfolio Management, you are directly responsible for achieving your organization's strategic business objectives.

Strategic management can make or break an organization. This is where it all begins! This is where the organizational leadership plans to realize the vision and mission of the organization. 

In an organization, at any given time, a portfolio represents a collection of selected components such as projects, programs, operations and other work. In addition, only a portfolio reflects one or more organizational strategies and objectives for that point in time.

With PfMP certification, you can helpin fact, driveyour organization achieve its strategic business objectives. 

Reason – 3: Project and Program Management are about “doing the work right”, whereas Portfolio Management is about “doing the right work”.

Can you see the difference? In no way, I’m diluting the importance and significance of project and program management. They are extremely important. However, they are typically tactical in nature. With them, you do the execution part rightly. 

On the other hand, portfolio management is about doing the right work! You can also say, with portfolio management, you are identifying, categorizing, evaluating, selecting, prioritizing and also authorizing the right work. 

You can also say: Project and Program Management are the “execution work”, whereas Portfolio Management is the “thinking work”.

Reason – 4: The PfMP credential is considered to be an elite certification by top professionals.

The first point informs that it’s the highest-level certification offered by PMI. In addition, as I’ve seen, PfMP certification is considered to be an elite-level certification. The top professionals in the organizations, including directors, vice presidents, C-suite executives and entrepreneurs want to pursue those certifications.

I’ve interacted with quite a few PfMP, who are senior executives in the organization. Indeed, they respect and value the PfMP certification. 

Reason – 5: With the right book and/or course, you will know hands-on portfolio management in the real-world.

As the saying goes: “Books and friends, few but good.”

Good books and material are not only easy to read and follow, but also great friends and guides. The right book/material will teach you the practical aspects of portfolio management. For example:

  • How do you prepare a Portfolio Roadmap?
  • How to build a Portfolio Benefits-Realization Plan?
  • How to create a Portfolio Efficient Frontier Chart?
  • How to manage portfolio risks with hands-on software tools?

In my PfMP Exam Prep Book – I Want To Be A PfMP, the plain and simple way, you will learn many such software tools and their applicability in the real-world.

Reason – 6: Without strategic execution, organizations just fire and forget. PfMP ensures that you fire the bullets and ensure that the bullets meet the target.

Ever worked in an organization, where everyone is running around, doing a lot of “work” but the organization is still struggling and accomplishing a little? 

Ever worked in an organization but there is no focused vision, mission or passion, other than just making some profit?

In addition, you might have worked in organizations, where some initiatives are taken and possibly completed, but there is no impact on the margin or organization direction.

Such organizations lack strategic intent, direction, and execution. In such organizations, it’s fire first and then aim! You don’t accomplish anything with that. 

Strategy formulation takes time to build and has to be continuously visited and re-evaluated as strategic changes will happen, inevitably. With portfolio management, you ensure strategic management happens in the right way.

Reason – 7: You need not be a PMP or PgMP to be a PfMP. But if you are a PfMP, you will know PMP and PgMP content to an extent.

The Project Management Professional (PMP) from PMI is a very well-known certification and is highly sought after by many organizations. Considering Project Management Body of Knowledge (PMBOK) 6th edition, it has a perspective on project management with 10 knowledge areas, 5 process groups and a number of processes. 

Another certification, which has seen adoption is the Program Management Professional (PgMP) certification. The current edition for program management informs about 5 domains in the Standard for Program Management, 4th edition, including a number of program activities.

The Portfolio Management Professional (PfMP) certification, on the other hand, while focused on portfolio management also touches upon areas of project, program and operation management. After all, projects, programs and operations will be components inside a portfolio.

Another advantage is this: you need not be a PMP or PgMP to be a PfMP as noted in the headline. So, you can directly aspire to be a PfMP and also learn to certain extent about project and program management. 

Reason – 8: You will know governance at the highest level. There is a dedicated knowledge area: Portfolio Governance Management.

For your PfMP exam, you have to prepare with multiple performance domains (process groups) as well as knowledge areas. Portfolio Governance Management is one the key process groups, and you will get 20% of questions.

With this knowledge area, you will understand the importance of portfolio governance, identification, categorization, selection of portfolios as well as selection, prioritization, balancing and authorization of portfolio and/or its components.

In my view, it’s the most significant knowledge area to really understand portfolio management.

Reason – 9: If you are a PMP, RMP and/or ACP, then your understanding of Risk Management will be very helpful for Portfolio Risk Management. 

While the PMP exam tests your risk management understanding to a considerable extent, the RMP exam, in fact, thoroughly tests your risk management understanding, various simulation techniques with real-world tools, and a number of advanced risk management concepts. 

If you are a PMP, ACP and/or RMP, then your understanding of risk management will be 100% applicable for the PfMP exam. You can apply your learning and competency while preparing for the PfMP exam. 

Risk Management is not an easy area to understand, but your earlier learning will help with the right material and content. 

Video Brief: Top 9 Reasons to Go for PfMP

For quick understanding, I've prepared a video [Duration - 10m: 09s] in support of this article. You can watch the videos to learn a few more points about the value of PfMP certification.



Final Words

If you want to be in the driver seat of the organization formulating strategies, ensuring strategies are met, strategic changes are incorporated with the right projects, program and operations, and your organization meets the vision, mission, goals and strategic objectives, PfMP certification is best suited for you.

There is a reason it’s considered to be a top-most certification offered by PMI in the domains of project-program-portfolio (PPP) management. This is primarily because you actually ensure the organization ship moves in the right direction in the turbulent marketplace sea. 

If you are considering your career and growth opportunities, this certification provides an enormous amount of knowledge and real competency. And as noted in the first reason, it does shine on your resume, too!

Finally, with portfolio management, you are or may come directly into playing leadership roles in an organization. Leadership is extremely important and it also fundamentally changes you to the core.


Book Available for PfMP Exam:

Saturday, October 14, 2023

20 PMI-PfMP Free Questions and Answers (Part - 2)


This post is in continuation of the earlier series of questions for the PfMP® examination. I would strongly recommend that you take both the parts together when you try to attempt the questions. 

These are not verbatim questions from the PfMP exam. Nevertheless, a lot of thought, understanding and also pain have gone in preparing the questions. 

These questions cover the areas needed for the exam. The questions are based on the Standard for Portfolio Management, Standard for Risk Management in Portfolios, PfMP Examination Content Outline (ECO) and other reference books (PMI list) for the PfMP exam.

In this part, we will have the final 10 questions of the series.

These questions are from the newly released book:

I Want To Be A PfMP, the plain and simple way

Again, I sincerely hope you enjoy doing these PfMP questions. and it helps in your PfMP exam preparation.

[This series: Part - 1] 

Subscribe to the site (top-right corner) for fresh updates.


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PMI-PfMP QUESTIONS (Part – 2)


Question – 11: After authorizing the portfolio components, you have documented the governance decision in the portfolio reports. Now, you want to communicate the decisions to the key stakeholders. Which tool or technique will be most effective?
A Portfolio authorization technique
B Portfolio management information system
C Portfolio review meetings
D Communication requirements analysis 


Question – 12: You are doing a number of surveys and also conducting questionnaires with stakeholders to provide monitoring and control for the portfolio. This is known as:
A Elicitation
B Requirement gathering
C Using communication methods
D Employing communication vehicles


Question – 13: While optimizing the portfolio, you want to know the top risks associated with the portfolio components and any potential issues that may arise due to implementation. Which one will help you the most for this analysis?
A Portfolio risk reports
B Portfolio issue reports
C Portfolio capacity reports
D Portfolio performance reports


Question – 14: The portfolio strategic plan has:
A Portfolio vision, goals, objectives, success criteria, scope and resources

B Measurable goals and objectives, portfolio benefits, key risks, assumptions, constraints, and dependencies

C High-level scope, high-level budget, key and initial stakeholders, assumptions and constraints, high-level risks

D Governance model, prioritization model, portfolio oversight, portfolio structure


Question – 15: Portfolio management is not only getting the right components and related investment decisions, but also considering the risks involved and building a risk-adjusted portfolio. For this, a portfolio manager can use many investment choice-tools, but:
A Market-payoff variability analysis
B Probability or probabilistic analysis
C Performance variability analysis
D Time-to-market variability analysis


Question – 16: Traffic light colors such as red, yellow, green, and blue, along with milestone markers are used to display component status for the entire portfolio. This report is:
A Portfolio Resource Utilization Report
B Portfolio Performance Variance Report
C Portfolio Funnel Chart or Burndown/Burnup Chart
D Portfolio Resource Capacity and Capability Report


Question – 17: You are taking raw data or information without full context and putting them into reports with context, which hold values for the recipients. It's:
A Qualitative and Quantitative (Q&Q) Analysis
B Capability and Capacity (C&C) Analysis
C Communication Requirement Analysis
D Stakeholder Analysis


Question – 18: Your sponsor is concerned about all the portfolio risks, including the various sources of uncertainties. A colleague, who is a certified PfMP has advised you to develop a portfolio risk exposure chart, because this chart shows:
A Internal risks and external risks
B Portfolio risks, Component risks and Overall risks
C Structural risks and Execution risks
D Technical risks, Management risks and Portfolio risks


Question – 19: As you pre-screen, identify and categorize the portfolio components, you are using a number of component descriptors. However, which one of the following is not a portfolio component descriptor?
A Quantitative benefits
B Qualitative benefits
C Alignment for strategy 
D Portfolio component customer


Question – 20: Currently, you are developing a key deliverable which provides the high-level graphical timeline, mapping of portfolio components, and internal and external dependencies. For this purpose, you are looking for a simple prioritization model with criteria such as strategic alignment, financial benefits, financial costs, risk, and dependencies. What should you do?
A Check the Portfolio Charter
B Take the prioritization model from the Portfolio Management Plan
C Refer to the prioritization model the Portfolio Strategic Plan
D Seek guidance from the Portfolio Governing Body



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The question set is available in the embedded document below. The answers are also part of this document.

For all answers with detail explanation, subscribe to this site and send a mail (from your GMail id) to managementyogi@gmail.com.



Book for PfMP Exam Prep:
 

Monday, October 09, 2023

20 PMI-PfMP Free Questions and Answers (Part - 1)

 

The Portfolio Management Professional (PfMP®) is the highest-level certification offered by the Project Management Institute (PMI®). 

In fact, it is an elite certification. Very few have earned this certification.

To earn this certification, you need the right content, material, course of action and above all, high-quality questions, which will test your ability and understanding with respect to portfolio management.  

In this post series, we will have 20 PMI-PfMP questions. These questions are prepared with inputs from successful PfMPs, current portfolio management practitioners, and referring to practices used by portfolio management software tools. 

The Standard(s) for Portfolio Management, the Standard for Risk Management in Portfolios, the PfMP Exam Content Outline (ECO) and certain other key reference books have been primarily referred to prepare the questions.

To answer these questions, you need to have:

  • Solid foundation on Portfolio Management, which is based upon the Standard for Portfolio Management from PMI. 
  • Sound understanding of portfolio management process interactions, across the process groups and knowledge areas. 
  • Absolute clarity on various inputs, tools and techniques (ITTOs) of the various portfolio management processes. 
  • Real-world portfolio management experience.
  • Ability to apply portfolio management theory/concepts in various contexts, scenarios and situations.

This is the first of the series, where you will have 10 questions. The next part will have another set of 10 questions.

These questions are from the newly released book:

I Want To Be A PfMP, the plain and simple way

I sincerely hope you enjoy doing these PfMP questions. And it helps in your preparation for the PfMP exam.

[This series: Part - 2 ] 

Subscribe to the site (top-right corner) for fresh updates. 


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PMI-PfMP QUESTIONS (Part – 1)


Question – 1: The key deliverables in portfolio management processes are:
A Portfolio Strategic Plan, Portfolio Management Plan, Portfolio Risk Management Plan, Portfolio Performance Management Plan

B Portfolio Strategic Plan, Portfolio Charter, Portfolio Roadmap, Portfolio Management Plan, Portfolio

C Portfolio Charter, Portfolio Management Plan, Portfolio Strategic Plan, Portfolio Risk Register, Portfolio Issue Register/Log, Portfolio Benefits Realization Plan

D Portfolio Documents, Portfolio Process Assets, Portfolio Reports, Portfolio Management Plan


Question – 2: A new portfolio manager has joined the PfMO and currently struggling to take the portfolio and its components to authorization. As you are a certified PfMP, she approaches you understand the proper sequence of steps of components till authorization. Which one of the following would be your advice?
A Identification, Selection, Prioritization, Scoring, Balancing and Optimizing of portfolio components

B Pre-screening, Identification, Selection, Balancing, Evaluation, Authorizing of portfolio components

C Identification, Categorization, Scoring and Ranking, Evaluation, Selection, Prioritization, and Balancing of portfolio components

D Pre-screening, Selection, Identification, Categorization, Balancing and Authorization of portfolio components


Question – 3: To manage supply and demand you are determining what would happen if human, equipment, or funding was increased or decreased, or if constrained resources were not available. This is an example of:
A What-if analysis
B SWOT analysis
C Comparative advantage analysis
D Scenario analysis


Question – 4: Your organization is quite new into organized portfolio management and the current software system available is not robust. The strategic management head wanted your view on it. You suggest to proceed because in a less mature organization, the Portfolio Management Information System (PfMIS) is a:
A A set of automated and/or manual tools
B A document depository with version and configuration control systems
C A collection of spreadsheets or other portfolio documents
D A set of systems, processes and tools


Question – 5: After you complete the ‘communication requirements analysis’ while developing the Portfolio Communication Management Plan, you document them in a:
A Stakeholder Communication Strategy Matrix
B Stakeholder Matrix
C Communication Matrix
D Stakeholder Engagement Matrix


Question – 6: You want to find out the gaps in investment within the portfolio as a whole. Which T&T will be used?
A Qualitative analysis
B Quantitative analysis
C Monte Carlo simulation
D Investment choice analysis


Question – 7: A portfolio manager (PfM) is analyzing to define the benefits that will be provided by the portfolio components and compare it to the costs of the portfolio components to build a chronological view of components. Benefits may be qualitative or quantitative. What is the PfM doing? 
A Cost-benefits analysis in Develop Portfolio Roadmap process
B Cost-benefits analysis in Optimize Portfolio process
C Cost-benefits analysis in Manage Portfolio Value process
D Cost-benefits analysis with Portfolio Efficient Frontier in Optimize Portfolio process


Question – 8: In a meeting, the portfolio sponsor suggested adding, modifying as well as terminating (cancellation) some of the components due to strategy updates. You, the portfolio manager, is not very sure and want to compare the pre-existing components with the new components to ensure strategic alignment. What analysis will help you?
A Strategic alignment analysis
B Stakeholder analysis
C Gap analysis
D Value measurement and scoring analysis


Question – 9: A portfolio manager is checking the components available and deciding whether the component should be part of the portfolio. To be part of the portfolio, components should have a minimum size or budget of $500,000. What is the portfolio manager doing?
A Using the weighted ranking and scoring technique
B Applying the portfolio component categorization technique
C Identifying and categorizing the portfolio components
D Using the T&T of portfolio component inventory


Question – 10: Currently, you are checking a list of portfolio components which are to be deactivated and terminated. With it, you want to return the remaining funding and resources to be returned to the resource pool and funding of the organization. What are you doing?
A Building a balanced, optimized and approve set of components for the portfolio
B Applying authorization techniques for the portfolio and its components
C Clearly defining the portfolio components and segregating the active and inactive components
D Authorizing the portfolio and/or its components

[This series: Part - 2 ] 

Subscribe to the site (top-right corner) for fresh updates. 

 

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The question set is available in the embedded document below. The answers are also part of this document.

For all answers with detail explanation, subscribe to this site and send a mail (from your GMail id) to managementyogi@gmail.com.



Book for PfMP Exam Prep: