Practice Test

True or False: It is vital to make recommendations and obtain approval regarding portfolio decisions from key decision makers.

• True
• False

Answer: True

Explanation: Key decision makers have the authority to approve or reject recommendations so it’s important to engage them in portfolio decisions.

The governance model highlights which of the following?

• A. Key decision makers only
• B. The hierarchy of employees only
• C. Roadmap only
• D. Key decision makers, employees hierarchy, roadmap, budget, and more

Answer: D. Key decision makers, employees hierarchy, roadmap, budget, and more

Explanation: The governance model is a comprehensive blueprint covering all aspects of an organization including decision makers, hierarchy, roadmap, budget etc.

True or False: Components and plans are not part of portfolio decisions.

• True
• False

Answer: False

Explanation: Components and plans are fundamental parts of portfolio decisions and should be included in discussions with key decision makers.

Communication with key decision makers in portfolio decisions should be:

• A. Formal only
• B. Informal only
• C. As per the choice of project manager
• D. Both formal and informal

Answer: D. Both formal and informal

Explanation: Depending on the situation, communication with key decision makers may be formal or informal, but all such communications should be documented.

True or False: It is not necessary to authorize the execution of the portfolio after approval.

• True
• False

Answer: False

Explanation: Authorization after approval is the next step in executing the portfolio.

Who should be making recommendations for portfolio decisions?

• A. Project manager only
• B. Governance board only
• C. Both project manager and governance board
• D. Any employee

Answer: C. Both project manager and governance board

Explanation: While the project manager often makes the recommendations, important decisions should involve the governance board as well.

The roadmap in portfolio management refers to:

• A. The journey of the project manager
• B. The travel plan of the organization
• C. The strategic plan outlining the project’s steps and goals
• D. The hierarchy of the organization

Answer: C. The strategic plan outlining the project’s steps and goals

Explanation: The roadmap in portfolio management provides a detailed plan and direction for the project.

True or False: The budget is not necessary for portfolio decisions.

• True
• False

Answer: False

Explanation: Budget is a vital component of portfolio decisions as it outlines the financial capability of the project.

Governance models are:

• A. Fixed and cannot be changed
• B. Flexible and can be changed
• C. To be decided by the project manager
• D. Not significant in portfolio management

Answer: B. Flexible and can be changed

Explanation: Governance models are flexible and may change depending on the needs of the organization or project.

Which of the following is not a consideration in portfolio decisions?

• A. Components
• B. Plans
• C. Roadmap
• D. Personal preference of project manager

Answer: D. Personal preference of project manager

Explanation: Portfolio decisions should be made based on strategic factors such as components, plans, and roadmaps rather than personal preferences.

Interview Questions

What is the role of key decision-makers in the execution of a portfolio?

Key decision-makers in the portfolio governance model, like executives or board of directors, have the responsibility to provide strategic direction, make decisions on the recommendations provided, approve budgets, and authorize the execution of the portfolio.

What kind of recommendations might you make regarding portfolio decisions?

Recommendations may include adding or removing components from the portfolio, reallocating resources, adjusting the timeline, or changing the strategic focus or intended outcomes of the portfolio.

Why is obtaining approval from key decision-makers crucial in portfolio management?

Obtaining approval from key decision-makers ensures alignment with the strategic goals of the organization, guarantees the resources and necessary support for the portfolio, and authorizes the execution of the portfolio.

How can the portfolio roadmap help in obtaining approval for portfolio decisions?

The portfolio roadmap visualizes the timeline, key milestones, dependencies, resources, and intended outcomes of the portfolio, making it an effective tool for communication with key decision-makers and helping them understand the need for certain decisions and their impacts.

What role does the budget play in making recommendations and obtaining approval?

The budget is a significant factor in portfolio decisions. Recommendations should consider the budget and provide a clear estimate of the costs involved. The budget’s approval ensures that the portfolio has the necessary financial resources for execution.

What are the main components of a portfolio that you might need to get approval for?

The main components that require approval are the projects and programs within the portfolio, resource allocation, timeframes, budget, and the strategic alignment of the portfolio.

What happens if a portfolio decision does not align with the governance model?

If a portfolio decision does not align with the governance model, it may risk the strategic objectives of the organization and might not get the necessary approval from key decision-makers, which could delay or jeopardize the portfolio’s execution.

How often should the portfolio be reviewed by key decision-makers?

The portfolio should be reviewed regularly – typically on a quarterly basis or whenever a significant decision needs to be made.

How can effective communication with key decision-makers aid in obtaining approval for portfolio decisions?

Effective communication ensures that key decision-makers understand the reasons behind recommendations, the value and benefits to the organization, the risks involved, and how the portfolio aligns with strategic objectives, thereby increasing the chances of approval.

Why is the portfolio governance model important?

The portfolio governance model directs how portfolio decisions should be made and who should be involved in the decision-making process. It provides a structure for decision-making and enables efficient and effective portfolio management.

What should be done if a portfolio decision isn’t approved?

If a portfolio decision isn’t approved, the feedback and reasons for non-approval should be considered, the decision or approach should be re-evaluated and revised, and then resubmitted for approval.

What is the role of a Portfolio Management Professional (PfMP) in the decision-making process?

The PfMP’s role is to manage the portfolio in alignment with the organization’s strategy, make viable recommendations for portfolio decisions, present these decisions to key decision-makers, and procure their approval for executing these decisions.

How should a PfMP approach changes in a portfolio?

A PfMP should approach changes by analyzing the change’s impact on the portfolio and the organization, deciding whether it is advantageous to adopt the change, and then making a recommendation to the key decision-makers for their approval.

What potential consequences can occur if key decision-makers are not adequately involved in portfolio decisions?

Inadequate involvement of key decision-makers can lead to misalignment with business objectives, inefficient use of resources, poor decision-making, and eventually potential failure of the portfolio to deliver expected outcomes.

What kind of information should be communicated to key decision-makers when making recommendations?

When making recommendations, the PfMP should communicate the anticipated benefits, risks, impacts on resources, and alignment with strategic objectives, along with the cost and timeline of the portfolio. Providing all necessary information helps decision-makers make well-informed choices.

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