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PFMP · Question #720

Many people in your country are no longer eating food from cans because of the risk of botulism and eColi O1H747. Your low acid canned foods company is seeing its revenues decrease as a result, and…

The correct answer is C. The existing inventory of work should be validated against the updated strategy. When a company updates its overall strategy in response to market threats, the existing portfolio inventory must be validated against that updated strategy to ensure continued alignment.

Question

Many people in your country are no longer eating food from cans because of the risk of botulism and eColi O1H747. Your low acid canned foods company is seeing its revenues decrease as a result, and it is updating its overall strategy for the company to diversify into other markets as well as to add an aggressive marketing campaign to ensure the public that its low acid canned foods are generally recognized as safe by the Food and Drug Administration. This means in terms of portfolio management:

Options

  • AEach proposed component must demonstrate business value before it is undertaken
  • BThe ROI for existing components should be reviewed to determine if they should continue
  • CThe existing inventory of work should be validated against the updated strategy
  • DThe benefits to be realized by existing components require standard KPIs tied to critical success

How the community answered

(19 responses)
  • A
    5% (1)
  • B
    11% (2)
  • C
    74% (14)
  • D
    11% (2)

Why each option

When a company updates its overall strategy in response to market threats, the existing portfolio inventory must be validated against that updated strategy to ensure continued alignment.

AEach proposed component must demonstrate business value before it is undertaken

Demonstrating business value is a component selection criterion applied to new proposals, not the primary action triggered when the organization's existing strategy changes.

BThe ROI for existing components should be reviewed to determine if they should continue

Reviewing ROI for existing components is a narrower financial measure; validating against the full updated strategy is more comprehensive and is the correct first action.

CThe existing inventory of work should be validated against the updated strategyCorrect

Portfolio management requires that all existing components - programs, projects, and operations - remain aligned with the organization's current strategic objectives. When strategy changes significantly, as in this diversification scenario, the portfolio manager must review the existing inventory of work to validate which components still support the new strategy, which require modification, and which should be terminated due to strategic misalignment.

DThe benefits to be realized by existing components require standard KPIs tied to critical success

Tying benefits to standard KPIs is a performance measurement activity that comes after validation confirms which components should continue under the new strategy.

Concept tested: Portfolio strategic alignment - validating existing components against updated strategy

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

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