PFMP · Question #667
Working to manage portfolio value is a continuous task. In doing so, as the portfolio manager, you review the monthly and any ad hoc reports submitted by component managers. This month you saw there…
The correct answer is D. Are recommended for consideration by the Portfolio Review Board. Cost savings forecasts that require reallocating resources across multiple portfolio components must be presented to the Portfolio Review Board for consideration, as they represent a portfolio-level governance decision.
Question
Working to manage portfolio value is a continuous task. In doing so, as the portfolio manager, you review the monthly and any ad hoc reports submitted by component managers. This month you saw there was an excellent opportunity for major cost savings in two components in the top five on the portfolio list; however, to realize this cost reduction, these components require resources to be reallocated from other components in progress for six months. These forecasts then:
Options
- AShould be verified by independent estimators for accuracy
- BRequire validation by the CFO and his staff
- CShould be accompanied by an analysis of earned value data to ensure the components are using
- DAre recommended for consideration by the Portfolio Review Board
How the community answered
(36 responses)- A6% (2)
- B11% (4)
- C3% (1)
- D81% (29)
Why each option
Cost savings forecasts that require reallocating resources across multiple portfolio components must be presented to the Portfolio Review Board for consideration, as they represent a portfolio-level governance decision.
Seeking independent verification of cost estimates is a validation best practice in some contexts, but it is not the primary next step when a reallocation opportunity affects multiple components requiring governance approval.
CFO validation addresses financial compliance and budget authority, but the resource reallocation decision itself falls under the Portfolio Review Board's governance remit, not solely the CFO's.
Earned value analysis assesses component performance to date but does not address the forward-looking resource reallocation decision that must be escalated to governance.
The Portfolio Review Board holds the authority to approve resource reallocations that affect multiple active components; forecasts that propose taking resources from several components to benefit two high-priority ones represent a balancing decision with portfolio-wide impact, which must go through the designated governance body rather than be executed unilaterally by the portfolio manager.
Concept tested: Portfolio Review Board governance for resource reallocation decisions
Source: https://www.pmi.org/pmbok-guide-standards/foundational/standard-for-portfolio-management
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