Monitoring portfolio performance on an ongoing basis is a crucial aspect of portfolio management, especially when preparing for the Portfolio Management Professional (PfMP) exam. Proper monitoring involves the use of reports, conversations, dashboards, and auditing techniques. These tools ensure portfolio effectiveness and efficiency, and maintain strategic alignment.

To understand the importance of these techniques, let’s delve into each one of them.

Table of Contents

1. Monitoring using Reports

In portfolio management, reports play a pivotal role in tracking the progress and performance of the portfolio. They provide insights into the portfolio’s health, projects’ status, risks, and opportunities among others.

As a portfolio manager, you need to review these reports regularly to ensure the portfolio’s alignment with the strategic objectives. For instance, a Cost Variance Report can show whether the projects are running over or under the budget. If consistently over budget, strategic reassessment may be necessary.

2. Conversations

Effective communication is a crucial tool in portfolio management. Regular conversations with stakeholders, project managers, and team members provide a deeper understanding of the portfolio’s status and challenges.

These regular touchpoints also provide opportunities to reassess and realign the portfolio with the organization’s strategic goals. The key here is to ensure that communication is clear, consistent, and honest, thereby inciting trust among all involved parties.

3. Dashboards

Dashboards provide a visual display of the most important information needed to achieve one or more objectives. They consolidate and arrange numbers, metrics, and sometimes performance scorecards on a single screen.

In portfolio management, a well-designed dashboard can help monitor performance, keep track of multiple projects, and help to make informed decisions. For example, a project status dashboard can easily show which projects are on track, which are falling behind, and which have been completed.

4. Auditing Techniques

Audit techniques help in reviewing and inspecting the portfolio to ensure its efficiency and effectiveness. Auditing verifies the portfolio’s adherence to the organization’s strategic objectives and identifies any potential deviations.

The audit can be done through various methods such as internal audits, compliance audits, or performance audits. For example, performing regular internal audits can help identify areas where projects within the portfolio may not be following the established policies and procedures.


In conclusion, regular monitoring and auditing of the portfolio performance ensure that the portfolio remains effective, efficient, and it aligns with the strategic objectives of the organization. Preparing for the PfMP exam requires a comprehensive understanding and application of these techniques. Remember, continuous monitoring and adjustment are key to successful portfolio management.

Practice Test

True or False: Regularly monitoring portfolio performance is not necessary as long as initial projections are solid.

  • True
  • False

Answer: False.

Explanation: Ongoing monitoring of a portfolio is crucial to ensure effectiveness and efficiency, as it allows for real-time adjustments based on evolving market conditions.

What tools can be used to monitor the portfolio’s performance?

  • A. Reports
  • B. Conversations
  • C. Dashboards
  • D. Auditing techniques
  • E. Guesswork

Answer: A, B, C, D.

Explanation: While guesswork may sometimes seem tempting, it does not form part of a professional’s toolkit for monitoring portfolio performance. The other options are time-honored methods that yield reliable data.

True or False: Monitoring portfolio performance cannot help in maintaining strategic alignment.

  • True
  • False

Answer: False.

Explanation: Regular monitoring can actually help maintain strategic alignment by allowing quick course correction whenever deviations occur.

Which of the following best describes the purpose of monitoring portfolio performance?

  • A. To increase the portfolio’s value
  • B. To ensure portfolio effectiveness and efficiency
  • C. To meet the needs of stakeholders
  • D. All of the above

Answer: D

Explanation: While increasing portfolio value and meeting stakeholders’ needs are indeed important, the overarching goal of portfolio performance monitoring is to ensure effectiveness and efficiency.

True or False: Ongoing performance monitoring involves analyzing both qualitative and quantitative data.

  • True
  • False

Answer: True.

Explanation: Both types of data provide important insights into portfolio performance. Qualitative data might come from conversations, while quantitative data might come from reports and dashboards.

Which auditing technique is most helpful in monitoring portfolio performance?

  • A. Financial audits
  • B. Operational audits
  • C. Compliance audits
  • D. None of the above

Answer: B.

Explanation: Operational audits are most directly related to reviewing processes and ensuring efficiency, making them the best fit for monitoring portfolio performance.

True or False: Dashboards provide real-time data that can be used for monitoring portfolio performance.

  • True
  • False

Answer: True.

Explanation: Dashboards give a snapshot of key performance indicators in real-time, greatly facilitating portfolio performance monitoring.

Why are conversations important in monitoring portfolio performance?

  • A. They provide a chance to build relationships
  • B. They provide qualitative insights
  • C. They are the only reliable source of information
  • D. They are not important

Answer: B.

Explanation: Conversations allow for qualitative evaluation of portfolio performance and provide insights that can help maintain strategic alignment.

Multiple Select: The ongoing performance monitoring of a portfolio should include ________.

  • A. Identifying any issues or risks
  • B. Matching actual performance to initial projections
  • C. Changing strategies frequently to suit market trends
  • D. Making modifications based on feedback and adjustments

Answer: A, B, D.

Explanation: Regular monitoring identifies risks, matches actual to projected performance, and allows for modifications using gathered feedback. However, frequent strategy changes may cause instability.

True or False: Monitoring portfolio performance is a one-time activity conducted at the end of a project.

  • True
  • False

Answer: False.

Explanation: Monitoring portfolio performance is an ongoing activity done periodically to ensure portfolio effectiveness and maintain strategic alignment with the organization’s objectives.

Interview Questions

What is the purpose of ongoing portfolio performance monitoring?

Ongoing portfolio performance monitoring is important to ensure the effectiveness and efficiency of a portfolio. This process allows for the early identification of any issues or risks, which can be addressed promptly to keep the portfolio in line with strategic objectives.

How can reports aid in monitoring portfolio performance on an ongoing basis?

Reports provide detailed data and summaries of the portfolio’s performance. They allow managers to see trends, understand effect, and gauge the success of individual projects or investments within the portfolio.

What role do conversations play in monitoring portfolio performance?

Conversations facilitate exchange of pertinent information among team members and stakeholders. They can be used to gain insights on the progress of projects, potential risks, and necessary adjustments to maintain strategic alignment.

How can dashboards be used in monitoring portfolio performance?

Dashboards present key performance indicators in a visual, easy-to-understand way, giving managers an at-a-glance view of how the portfolio is performing against its stated goals.

What auditing techniques can be used to monitor portfolio performance?

Auditing techniques in portfolio performance monitoring may include variance analysis, ongoing risk assessments, financial audits, internal process audits, and compliance audits.

Why is it vital to ensure portfolio effectiveness and efficiency?

Ensuring portfolio effectiveness and efficiency is key to delivering expected value and achieving strategic business objectives. An ineffective or inefficient portfolio may lead to lost opportunities, wasted resources, and failure to meet strategic goals.

What is strategic alignment in terms of portfolio management?

Strategic alignment in portfolio management refers to the process of ensuring that all projects and investments in a portfolio are directly contributing to the strategic objectives of the organization.

How can portfolio performance monitoring help maintain strategic alignment?

Portfolio performance monitoring helps to maintain strategic alignment by identifying any deviations from strategic objectives early on, ensuring corrective actions are taken to realign the portfolio to desired strategic objectives.

What are some key performance metrics that are monitored in a portfolio?

Key performance metrics that are typically monitored in a portfolio include return on investment, risk levels, alignment with strategic objectives, total portfolio value, and the status of individual projects or investments.

How does portfolio performance monitoring contribute to decision-making process?

Portfolio performance monitoring provides up-to-date and accurate information that can be used to inform decision making. This could involve making adjustments to current investments or projects, redirecting resources, or making strategic changes to achieve better outcomes.

What is the role of a Portfolio Manager in monitoring portfolio performance?

A Portfolio Manager is responsible for thoroughly analyzing all monitoring tools and reports, identifying any issues or risks, making necessary corrections, and steering the portfolio to stay aligned with the strategic objectives.

How often should portfolio performance be monitored?

While the timing can vary based on organizational needs and the nature of the portfolio, as a best practice, portfolio performance should ideally be monitored continually to allow for prompt detection and management of any discrepancies.

What are some of the challenges faced while monitoring portfolio performance?

Some of the challenges of monitoring portfolio performance include difficulty in accessing accurate and timely information, changes in strategic direction, resource constraints, and potential resistance from stakeholders.

What is the impact of not monitoring portfolio performance on an ongoing basis?

Not monitoring portfolio performance on an ongoing basis could lead to undetected issues escalating, inefficient use of resources, inability to meet strategic goals, and decrease in the portfolio’s overall value.

Can technology support the process of monitoring portfolio performance?

Yes, technology can greatly enhance the process of monitoring portfolio performance. Various software applications and platforms can automate data collection, provide real-time visibility into portfolio performance, and generate detailed reports and dashboards.

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