Portfolio Management: Building An Agile Portfolio Roadmap with MS Project

In my previous articles related to Portfolio Roadmap (Part 1, Part 2), I wrote the following:

“A portfolio roadmap is crucial because it shows the strategic intent of the organization in a visual (graphical) way. Irrespective of the approach used in portfolio management such as predictive (waterfall), adaptive (agile), hybrid or any other, the roadmap acts as an information radiator.”

As you may have noticed, Portfolio Roadmap is also used in adaptive approaches. In this article, we will learn how to have Agile components, using the Scrum framework, in a portfolio roadmap.  

At this stage, I’d strongly recommend that you read the previous two linked articles on the Portfolio Roadmap. Going forward, I’m going to modify that roadmap to include Sprints. Hence, it’s important that you read both.

Our Scenario

For one of the component projects, Project F, the approach used is Agile, specifically Scrum. For Project F, we have three releases and each release will have a number of Sprints. This is depicted below.  

As shown in the above figure, there are many components in our portfolio. The Component Project F consists of three iterations or Sprints. The Sprint length is 4 weeks. The Portfolio Management Office (PfMO) directive is to show all the releases and the Sprints in the portfolio roadmap. 

The Agile Portfolio Roadmap will be similar to the Traditional Roadmap, but differ in visualization. In our case, as noted earlier, we want to have the component project, releases and Sprints.  That said, we will take the following steps. 

Add Agile Custom Flag

To distinguish between the agile and non-agile, we will add another custom Boolean flag - isAgile. This will be in addition to the existing custom flags for component projects, programs and operations.  

Format for Agile Project (Project F)

Next, using the above Boolean flag (isAgile), we will format the Agile related components in the Agile Portfolio Roadmap. The formatting can be done by going to Format tab > Bar Styles group > Format command.  

As shown above, I’ve added an Agile Task above:

• The appearance is with different color-coding.
• The conditions applied for the task have the isAgile (flag) enabled.

Now, we are going to add this custom isAgile field and enable it for Project F to be executed in Agile mode.  

As you can see, after I enabled the isAgile custom flag for Project F, the color coding changed. The project has been renamed to Project F (Agile Mode) to make it distinguishable.  

Add Releases to the Component Project (Agile Mode)

In this step, we are going to add the releases to the component project, which is executed in Agile mode. After you add them, we will get the following view. 

As shown above:

• Project F has three releases – Release 1, Release 2 and Release 3
• Each release has a 2-month duration. 
• Each release is highlighted in a separate color.
• Dependencies among the releases are shown.

You might be wondering about the reason for the change of color of Project F to blue. This is because Project F has now become a Summary Task. Hence, the respective color coding has been applied. 

If you want to keep the same color coding, then you have put the formatting condition below the Summary Task and made some changes to the algorithm.

Add Scrum Custom Flag

To show Sprints under the releases, you can add another custom Boolean flag isScrum, This flag can be added similarly to what we have done for isAgile custom flag.  

Format for Sprints (Project F)

Like we formatted for the releases (Agile mode), similarly, we have to format for the Sprints. You to change the conditions while formatting and applying the Boolean flag isScrum, which we just created.

Next, create the respective Sprints under the releases, and you can see them in the Agile Portfolio Roadmap. This is shown below. 

As shown above:

• Release 1 has three Sprints – Sprint 1, Sprint 2 and Sprint 3. Release 2 also has three Sprints – Sprint 4, Sprint 5 and Sprint 6.
• All the Sprints have different formatting and color-coding.
• Release 3 has no Sprint, and it retains the previous formatting and color coding.
• With Sprints, Release 1 and Release 2 became Summary Tasks, and hence, they retain the respective formatting and color coding.

Video Demonstration – Portfolio Roadmap 

To have a better understanding, the below video demonstrates further what we have learned so far [Duration: 05m:16s]. 

Conclusion

Sprints are mini-projects with 1 to 4 weeks of duration. As the Sprint length is short, then it’s not necessary to display it in the roadmap. But then, it depends on the organization’s mandate.

Nevertheless, Agile approaches are part of Portfolio Management and if you are preparing for the Portfolio Management Professional (PfMP®) certification exam, then you need to know them, but not extensively.

The Standard for Portfolio Management explicitly notes other approaches as part of Portfolio Management:

“The portfolio management plan (PfMP) may describe or refer to different methodologies or approaches which the organization applies to manage different classes or types of portfolio components, specified in the portfolio roadmap.”

To elaborate further, the PfMP should have sections or reference sections, where different methodologies to be applied are noted. These can be predictive, adaptive (iterative and incremental) or agile, or a hybrid model.

I hope this article gives your needed hands-on information to build an Agile Portfolio Roadmap.

References

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

[2] Article: Portfolio Management: Building and Managing A Practical Portfolio Roadmap – Part 1, by Satya Narayan Dash

[3] Article: Portfolio Management: Building and Managing A Practical Portfolio Roadmap – Part 2, by Satya Narayan Dash

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

Portfolio Management: Building and Managing A Practical Portfolio Roadmap with MS Project (Part – 2)

In the earlier part, we discussed the first set of steps needed to build a Portfolio Roadmap with a hands-on software tool, i.e., MS Project. There the following steps were informed:

• Step – 1: Add the Portfolio Components 
• Step – 2: Differentiate the Components 
• Step – 3: Format the Bar Styles for Components

The components, as informed in the previous part, can be projects, programs, operations, business proposals, among others. In this part, we will take the final steps:

• Step – 4: Apply the Bar Styles for Components
• Step – 5: Track Progress with Portfolio Roadmap

You will also learn to show the dependencies between the components and the importance of a portfolio roadmap. This part will end with a hands-on video demonstration.

I'd strongly suggest that you read this linked article, before proceeding further. For this part, we will start with Step - 4.

This series: Part – 1

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Step – 4: Apply the Bar Styles for Components

Now that we have customized the bar styles, we have to apply them into our Gantt Chart view to have the visualization. To do so, I’ll remove the earlier columns of Duration, Start and Finish, but add two new columns of isProgram and isOps. Remember we just added these two custom fields (columns).

Next, for each program component, the isProgram flag will be enabled and for each operation component, the isOps flag will be enabled. This will result in the following figure.  

As shown:

• For Program B, the isProgram flag is enabled, but isOps flag is disabled. It’s shown in green colored bars.
• For Business Area 1 Operations, the isOps flag is enabled, but isProgram flag is disabled. It’s shown in orange colored bars.

To have the name of the portfolio components on the right side of the bar, do ensure that the “Name” field is populated in the bar styles as shown below. 

Isn’t it a much better representation than the earlier one? 

The flag settings with bar style formatting is also very useful when the new portfolio components are added. You have to just enable or disable the flags and the color will automatically change. 

Step – 5: Track Progress with Portfolio Roadmap

Now, a portfolio, if completely new, can be authorized or some of its components can be authorized by the portfolio governing body. Assuming we have a new portfolio and it’s authorized the portfolio is in progress.

As the portfolio components are executed by the resources (financial, equipment, and human), we will have progress reported on the components. Let’s say few of the components are complete and we have to display the progress. For this purpose, we simply have to use the ‘% Complete’ column and show 100% completion. 

When visualized with completed portfolio components, we will have the following view.

As shown:

• We have three projects, Project A, Project B and Project C, which are complete.
• We have one program, Program A, which is complete.
• The completion is shown with a small horizontal line going inside the bar.

For a clear visualization of completion (a line going inside), I’ve increased the size of the bar by going to Format tab > Format group > Layout command and then changing the bar height to 18, instead of default 12.  

Dependencies in the Portfolio Roadmap

As we learned in the beginning, the portfolio roadmap also shows the dependencies among the components and/or across business areas. Dependencies can be easily shown by using the predecessor field of MS Project software.

For example, in the below figure, we have dependencies shown among multiple component projects and programs of the portfolio.  

Portfolio Component Grouping

The Standard for Portfolio Management, also informs that the completed portfolio components can be grouped and displayed on top of the roadmap. This also can be done with MS Project software. 

For this purpose, I’ll use the built-in Complete and Incomplete Tasks group, which can be seen by going to View tab > Data group and selecting this group from the Group drop down menu. In this grouping, we will change the ordering to Descending.

As shown above, only change the order to ‘descending’ and keep the rest of the formatting as it is. Now, when you apply the grouping, we will have the following view. 

Clearly, the components which are 100% complete are shown on top, whereas the ones not complete, or yet to be started are shown towards the bottom of the above view.

Importance of Roadmap *** NEW ***

The importance of portfolio can be understood by the below top points:

1. Shows both internal dependencies among portfolio components and can also show external dependencies. In fact, in your portfolio review meeting (governance meetings), this will be one of the first artifacts to be shown. 
2. Shows the milestones and hence important for portfolio value delivery. Milestones are significant events in the portfolio’s timeline. Any delay in a portfolio component’s closure and subsequent benefits realization can have ripple effects on portfolio management.  
3. Helps in defining the portfolio components, i.e., used specifically in identification, categorization, scoring and ranking of portfolio components. 
4. Clearly identifies the classes or types of portfolio components. This way, if some of the components are executed in Agile (Adaptive) mode, they can be represented. Hence, it truly helps in communication and risk management approaches as defined in the Portfolio Management Plan. 
5. An excellent communication tool with others, including portfolio managers, component managers and top executives, including the C-suites in an organization. 

Video Demonstration – Portfolio Roadmap *** NEW ***

To concretize your understanding, I’ve created the following video [duration: 05m:44s] to demonstrate the portfolio roadmap that we just created. This content of this video is referenced from my new PfMP book. Plug-in your earphones for a better audio-visual experience. 

Conclusion

Now that we have clearly understood portfolio and portfolio roadmap, their components and elements, I’ll come back to our opening quote. But I’d slightly rephrase it and say:

Project creates and delivers. Program coordinates and guides. Portfolio decides and drives. 

A portfolio not only decides the components to be taken, but also drives them in order to achieve the organizational strategies and objectives. The portfolio roadmap, on the other hand, is a key deliverable and indispensable tool used in portfolio management. The roadmap shows the strategic mapping, “to-be” vision of the portfolio, priorities, dependencies as well as the high-level plan.

The portfolio roadmap, along with the portfolio strategic plan and portfolio charter, drive the development of the portfolio management plan – the consolidated plan that drives the execution of the portfolio and its components.

I hope this article helps you in preparing for the Portfolio Management Professional (PfMP®) certification exam and also enables to apply your learning on portfolio roadmap in the real-world portfolio management. 

This series: Part – 1

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This article was first published by MPUG.com on 12th September, 2023. The current one is an updated version.

References

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

[2] Top 10 Things to Know about Portfolio Roadmap: Part – 1, by Satya Narayan Dash

[3] Top 10 Things to Know about Portfolio Roadmap: Part – 2, by Satya Narayan Dash

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

Portfolio Management: Building and Managing A Practical Portfolio Roadmap with MS Project (Part – 1)

  

Project creates, programs guides, portfolio decides. 

    - Quote from book, I Want To Be A PfMP – the plain and simple way

Project is all about deliverables and it creates a unique product, service or result. Program is all about getting benefits by coordinating the components within its scope. Portfolio, on the other hand, is about meeting the strategic business objectives of an organization with a collection of right portfolio components. Hence, it decides. 

It’s portfolio that decides which component project to take and which one to drop, which component program to take and which one to drop. At the portfolio level, you not only authorize the components, but also can deactivate or even terminate a component. Most important of all, it’s portfolio which directly links the organizational strategy to a prioritized set of programs, projects and operations. Portfolio is completely strategic in nature, whereas programs and projects are typically tactical. Because with portfolios, an organization achieves its strategic goals and objectives, which are outlined in the organization’s strategic plan. 

By this time, you would have begun to realize the importance of portfolios and portfolio management. It’s key to have consistent success for an organization, deliver predictably and remain ahead of the curve. 

Now, to successfully enable the portfolio manager and hence, C-suite executives, a widely used artifact or key deliverable is the Portfolio Roadmap. In this article, we will know more on Portfolio Roadmap, and how to build such a roadmap with MS Project software.

This series: Part – 1

Portfolio Roadmap

Let’s start with the definition of portfolio roadmap. As per Project Management Institute (PMI®):

Portfolio roadmap is a document that provides the high-level strategic direction and portfolio information in a chronological fashion for portfolio management and ensures dependencies within the portfolio are established and evaluated.

Illustrating further on the above definition, you can say the following about the portfolio roadmap:

• Graphically shows all the portfolio components (elements) to achieve organizational strategy and objectives.
• A high-level plan for your portfolio and based on it, low-level details will be prepared. The low-level details include the low-level schedule and timeline of portfolio components such as projects, programs, operations or other work. 
• Provides the foundation or initial basis on which internal and external dependencies are established and evaluated.

A portfolio roadmap is crucial because it shows the strategic intent of the organization in a visual (graphical) way. Irrespective of the approach used in portfolio management such as predictive (waterfall), adaptive (agile), hybrid or any other, the roadmap acts as an information radiator.

From Portfolio Strategic Plan to Portfolio Roadmap *** UPDATED ***

The significance of a portfolio roadmap is further emphasized in the flow of processes in portfolio management. A portfolio primarily exists to achieve the strategic business objectives of an organization. The vision, goals, strategies and objectives of a portfolio are listed in the Portfolio Strategic Plan (PfSP), which is created in Develop Portfolio Strategic Plan process. The PfSP drives the development of Portfolio Charter (PfC), created in the Develop Portfolio Charter process. 

The PfC links the portfolio to organizational strategy and formally authorizes the portfolio and portfolio structure. Next, PfC drives the development of the Portfolio Roadmap (PfRM), which is created with Define Portfolio Roadmap process. With the PfRM, the portfolio structure is visualized in a chronological manner. This is shown in the below figure. 

As shown above:

• Organizational strategy and objectives drive the creation of PfSP.
• PfSP, in turn, drives the development of PfC.
• Next, PfC drives the definition and development of PfRM. 
• All three above, i.e., the PfSP, PfC and PfRM drive the development of the Portfolio Management Plan (PfMP), which is another key deliverable in portfolio management. 

A Practical Portfolio Roadmap

With this background and fundamentals, let’s learn how to build a practical portfolio roadmap in a step-by-step manner. I’ll be using the sample given in PMI’s Standard for Portfolio Management, third edition and build on it with the MS Project software tool. 

To build the portfolio roadmap, we will have the following steps.

Step – 1: Add the Portfolio Components 

As noted earlier, a portfolio can have a number of components or initiatives. For our case, we have the following components:

• Projects: Project A, B, C, D, E, F and G
• Programs: Program A, B, C, D, E and F
• Operations: Business Area 1, 2 and 3 Operations

Each of these components are to be added as tasks into the MS Project plan (.mpp) file. As you add, you should also provide the high-level timeline for each component as shown below. 

As shown above:

• We have multiple projects, programs and operations added into the initial Portfolio Roadmap.
• For each portfolio component, we have duration, start and finish dates. These are high-level details. The portfolio roadmap is prepared iteratively and repeatedly adapted. 
• On the right side of the Gantt Chart, we have portfolio components represented as horizontal bars.

Also, do ensure that the timescale is properly customized. To do so, go to the timescale part of the Gantt Chart’s graphical side (on top), right click and choose “Timescale…”. 

As shown above:

• We have just one tier (middle). 
• Units used are “Months”.
• Label used is “Jan ‘09”.

Adjusting the timescale will result in a better visualization for your roadmap.

Step – 2: Differentiate the Components 

In this step, we will differentiate the components to have more clarity in our graphical representation. For this purpose, I’ll add two custom fields by going to the Format tab > Columns group > Custom Fields command. Both the custom fields are of Boolean type. 

As shown above, we now have two Boolean custom fields: isProgram and isOps. These will be used in the next step.

Step – 3: Format the Bar Styles for Components

In this step, we will add two more bar styles by going to Format tab > Bar Styles group > Format drop down menu > Bar Styles command. 

For our program components, we will have green color-coded bars with the isProgram flag applied, whereas for the operation components, we will have orange color-coded bars with the isOps flag applied. 

In addition, for all the portfolio component bars, we will have the end shape changed to inverted triangles, along with the type and color. This is shown and highlighted below.  

As shown above:

• For the project components, we have the default blue colored bars. The end shape has been changed. For the program components, we have the green colored bars. And for the operation, we have orange colored bars.
• The respective conditions applied for the components are:
• Normal, Active, Not Manually Scheduled (project components)
• Normal, Active, Flag1, Not Manually Scheduled (program components)
• Normal, Active, Flag2, Not Manually Scheduled (operation components)
• For all bar styles, the end shapes have been changed. This clearly shows the finish time of the respective components. 

In the next part of this series, we will do more customization of the Portfolio Roadmap, which will make clear distinctions among component programs, component projects and component operation.

We will also have a video demonstration of this Practical Portfolio Roadmap.

This series: Part – 2

References

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

[2] Top 10 Things to Know about Portfolio Roadmap: Part – 1, by Satya Narayan Dash

[3] Top 10 Things to Know about Portfolio Roadmap: Part – 2, by Satya Narayan Dash

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

Portfolio Management and Benefits Dependency Map

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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)

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 it into reports with context, which holds 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 of the Portfolio Strategic Plan

D Seek guidance from the Portfolio Governing Body

[This series: Part - 1]

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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.

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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 is currently struggling to bring the portfolio and its components to authorization. As you are a certified PfMP, she approaches you to 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 resources, equipment, or funding were 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 to organized portfolio management and the current software system available is not robust. The strategic management head wanted your view on it. You suggest proceeding 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 it 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 them to the costs of the portfolio components to build a chronological view of the 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.

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