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PFMP · Question #340

In a portfolio you have a continuous interaction between the portfolio and its components. The approach is top down when it comes to offering guidelines and approaches and becomes bottom up when the c

The correct answer is D. Metrics are defined at components level and rolled up to the portfolio level. Performance metrics are defined at the component level and rolled up to the portfolio level, consistent with the bottom-up reporting flow described in the question.

Portfolio Performance

Question

In a portfolio you have a continuous interaction between the portfolio and its components. The approach is top down when it comes to offering guidelines and approaches and becomes bottom up when the components report status and progress to the portfolio. What is the relation between the portfolio and portfolio components when it comes to defining the performance measures and targets (metrics)?

Options

  • APortfolio metrics are not related to component metrics, each is used at its own level
  • BMetrics are defined at portfolio level and given as guidelines to components in order to define
  • CPortfolio metrics used at the portfolio level are the same used at components level
  • DMetrics are defined at components level and rolled up to the portfolio level

How the community answered

(36 responses)
  • A
    3% (1)
  • C
    6% (2)
  • D
    92% (33)

Why each option

Performance metrics are defined at the component level and rolled up to the portfolio level, consistent with the bottom-up reporting flow described in the question.

APortfolio metrics are not related to component metrics, each is used at its own level

Portfolio and component metrics are directly related through the aggregation and roll-up process - component metrics feed into and form the basis of portfolio-level metrics, making them interdependent.

BMetrics are defined at portfolio level and given as guidelines to components in order to define

While the portfolio provides strategic guidelines in a top-down direction, specific performance metrics and targets originate at the component level and are reported upward, not dictated downward in operational detail.

CPortfolio metrics used at the portfolio level are the same used at components level

Portfolio-level metrics are higher-level aggregations derived from component metrics and operate at a different level of abstraction - they are summaries of component data, not identical measures applied at both levels.

DMetrics are defined at components level and rolled up to the portfolio levelCorrect

Components define their own detailed performance metrics based on their scope, deliverables, and objectives, and these metrics are then aggregated and rolled up to provide portfolio-level performance visibility. This bottom-up approach ensures that portfolio-level performance data is grounded in and traceable to actual component execution results.

Concept tested: Bottom-up metric aggregation from components to portfolio level

Source: https://www.pmi.org/pmbok-guide-standards/foundational/standard-for-portfolio-management

Topics

#Portfolio Performance Management#Metrics & KPIs#Portfolio Components#Information Flow

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