Questions and Answers
What is the primary focus of portfolio management?
Which of the following portfolios focuses specifically on the organization's commitments to different customer groups?
How does the project portfolio contribute to an organization?
What is a fundamental concept of portfolio management?
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What role does the product and service portfolio play in an organization?
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What is the primary purpose of a business case?
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Which stakeholders should receive the business case?
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Which section is NOT typically found in a business case format?
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How should timing be reflected in a business case?
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What is a key consideration when developing a business case?
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What should be included in the 'risk' section of a business case?
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Why is it important to involve all stakeholders in defining a strategy?
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What is the purpose of a business case in the context of a strategy?
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What should a business case outline regarding initiatives not pursued?
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What type of costs should a strategy include according to the associated business case?
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How can stakeholders assess the risk associated with a strategy?
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What is the definition of opportunity cost in the decision-making process?
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What criteria do stakeholders consider when approving a strategy or business case?
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What does the value of a strategy depend on?
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When outlining the benefits of a strategy, what consideration is essential?
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Study Notes
Strategy Discussion and Approval
- Important to balance new area development with current commitments in strategic planning.
- Portfolio: a collection of assets for investment aiming for optimal returns.
- Portfolio management includes three main types:
- Product and Service Portfolio: Manages existing commitments and development across markets.
- Programme and Project Portfolio: Coordinates projects to meet deadlines and ensures non-duplication.
- Customer Portfolio: Reflects commitment to specific customer groups impacting the organizational structure.
- Optimal returns result from managing assets holistically, tracking investments and linking them to value.
Business Cases, Portfolio, and Strategy
- Strategy functions as a business case by outlining environmental challenges, envisioning organizational goals, and specifying actionable options.
- Initiatives proposed in the strategy require individual business cases for funding and separate evaluation.
- Business cases must show alignment with the overall strategy, detailing associated costs, risks, and benefits.
Quantifying the Value of a Digital or IT Strategy
- Value of a strategy assessed based on support for organizational purpose and achievement of desired outcomes.
- Business case should clarify initiatives that cannot be pursued due to existing commitments.
- Costs should encompass capital investments, operational expenses, compliance costs, and more.
- Risks should be assessed with potential impacts and suggested treatments; stakeholders approve risk levels upon strategy acceptance.
- Returns calculated by subtracting total costs from anticipated benefits, considering both financial and non-financial aspects.
Communicating the Business Case
- Strategy must be communicated broadly while business cases are shared only with decision-making stakeholders.
- Business cases serve as decision-making tools rather than educational resources.
- Timing of business cases should correspond with strategy review cycles; updates required if conditions change.
Format of Business Cases
- Standardized templates often guide business case composition, typically including:
- Executive summary, problem statement, analysis, options discussion, benefits and costs, timelines, anticipated ROI, risk considerations, and recommendations.
Obtaining and Processing Feedback
- Feedback on business cases can challenge the strategy, ensuring stakeholder engagement from the outset.
- Business cases provide an audit trail for funding decisions and ensure alignment with overarching organizational strategy.
- Leadership teams benefit from stakeholder insights for strategy refinement.
Dealing with Resistance
- Digital and IT strategies need to be aligned with business strategies to gain support from executives.
- Collaboration and clear communication between strategy teams and business leaders is crucial.
- Without executive backing, even well-prepared strategies may face challenges; techniques to mitigate resistance include education, job security, and incentives.
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Description
This quiz discusses key concepts in portfolio management, focusing on the optimization of assets and the importance of balancing new development with existing commitments. It highlights the definition of a portfolio and the different types managed within an organization.