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Understanding the Portfolio Optimizer

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Locating the Portfolio Optimizer

The Portfolio Optimizer is the tool used for project evaluation and comparison. The process of reviewing and comparing Business Case values for projects assigned to a portfolio is how a portfolio manager can prioritize projects and generate the most value for an organization.

The purpose of the portfolio optimizer is to provide an interface through which a portfolio manager, steering committee, or product management office can view summary information about the business case of each project. Projects can then be prioritized according to strategic values and goals, or according to their overall score.

The Portfolio Optimizer can only assist you if you have completed the following prerequisites:

  • The Business Cases have been completed on the projects
  • A portfolio is defined for the projects you want to review
  • You provide a budget to represent the total financial cap of the selected projects.

To locate the portfolio optimizer:

  1. Navigate to the Projects area in the Global Navigation Bar.
  2. Click the Portfolios tab and click the portfolio you want to view.
  3. Click the Portfolio Optimization tab. 
    The Portfolio Optimizer is displayed.

Understanding Financial Fields in the Portfolio Optimizer

You can see the financial state of your portfolio at any time during the life of your projects when using the Portfolio Optimizer. 

The financial data from the projects is compiled to create the financial data for the portfolio. 

Projects are each given a score when their Business Cases are completed, by which they can be ranked in the Portfolio Optimizer.
For more information about calculating the portfolio optimizer score of a project, see "Understanding the Portfolio Optimizer Score and Optimizing in the Portfolio Optimizer."

You can also manually prioritize your projects, taking into account all the information about them, including financial data, alignment to their scorecards, ROI, for example. 

The following financial fields display in the Portfolio Optimizer:

Name of Field Description
On Time

The percentage of projects in the portfolio which are considered to be On Time. This is visible from any tab inside a Portfolio.

A project is considered to be On Time when the Project Condition is On Target.
For more information about Project Conditions, see "Understanding Project Condition."

The On Time percentage is calculated by using the following formula:

On Time Portfolio Percentage = Number of On Time Projects/ Total Number of Projects

On Budget

The percentage of projects in the portfolio which are considered to be On Budget. This is visible from any tab inside a Portfolio.

Projects are On Budget when they have not exceeded their pre-defined budget.
For more information about the budget of a project, see "Understanding the Project Finances Sub-Tab."

The On Budget percentage is calculated by using the following formula:

On Budget Portfolio Percentage = Number of On Budget Projects/ Total Number of Projects

ROI (for Portfolio)

The Return on Investment for the portfolio is calculated by taking into account the Total Benefit of the Portfolio and the Total of the Budgeted Costs of the projects. This is visible from any tab inside a Portfolio.

The Portfolio ROI value is calculated by using the following formula:

Portfolio ROI = (Total Benefit - Total Budgeted Cost)/ Total Cost * 100

For more information about how the ROI is calculated for a project, see "Calculating Return on Investment (ROI)."

Aligned or Alignment Score 

An average of all the Project Alignment Score values which are calculated after completing the Scorecard in the Business Case of the project. The alignment score of each project is listed in the Alignment column of the Portfolio Optimizer. This is visible from any tab inside a Portfolio.

For more information about generating an alignment score for a project, see "Applying a Scorecard and Generating an Alignment Score."

Net Value

The sum of all the Net Values of all the projects in the Portfolio. This is visible from any tab inside a Portfolio.

For more information about how Net Value is calculated for a project, see "Calculating the Net Value."

Number of projects

The total number of active projects in the portfolio. Projects that are considered active in a portfolio can be in any of the following statuses:

  • Current
  • Planning
  • Approved
Budget You can manually update this field to indicate what is the total budget for the entire portfolio. This budget is used for all the projects inside the portfolio. 
Remaining

The remaining budget after all the Budgeted Costs on all the projects inside the portfolio have been subtracted from the Budget of the portfolio.

The Remaining Portfolio Budget is calculated by using the following formula:

Remaining Portfolio Budget = Total Portfolio Budget - Total Budgeted Cost of All Portfolio Projects

The overall Budgeted Cost of all the projects in the portfolio is represented in the indicator bar under the Budget field. The Budgeted Cost of each project is listed in the Cost column of the Portfolio Optimizer.  

For more information about tracking costs on a project, see "Tracking Costs."

Risk 

The sum of all the Potential Risk Costs of all the projects in the portfolio. The Potential Risk Cost of each project is listed in the Risk column of the Portfolio Optimizer. 

For more information about calculating risks for projects, see "Calculating Potential Risk Cost."

Benefit

The sum of all the Planned Benefit values of all the projects in the portfolio. The Planned Benefit value of each project is listed in the Benefit column of the Portfolio Optimizer. 

For more information about the Planned Benefit of a project, see "Understanding the Planned Benefit of a Project."

Risk to Net Value indicator

Measures the Potential Risk value taking into account the Net Value provided by all projects in the portfolio. For achieving the most efficiency within the portfolio, you want to see that the Risk indicator is low and the Net Value indicator is high. 

For more information about calculating Risk to Net Value, see "Calculating the Risk to Net Value in a Portfolio."

Customizing the Portfolio Optimizer

You can customize only the Project Prioritization area of the Portfolio Optimizer. 

The following icons and options are available in the Portfolio Optimizer:

Icon Name  Function
optimizer_set_priority.png Set project priority Use this icon when you want to save the project order, based on their priority. 
optimizer_optimize_icon.png Optimize portfolio

Use this icon to optimize the portfolio based on the following financial values of the projects:

  • Cost
  • Alignment
  • Value
  • Risk to Benefit
  • ROI

For more information about optimizing your portfolio, see "Understanding the Portfolio Optimizer Score and Optimizing in the Portfolio Optimizer"

optimizer_undo_and_redo.png Undo/ Redo icons Use these icons to cancel or redo the changes you made to the Portfolio Optimizer before saving.
optimizer_show_unchecked.png optimizer_hide_unchecked.png Show/ Hide unchecked projects Use these icons to display or hide the projects in the portfolio that you have unchecked. 
optimizer___Export.png Export

Use this icon to export the data in the Project Prioritization area of the Portfolio Optimizer. You can export it to the following formats:

  • PDF
  • Excel
  • Tab Delimited
  • HTML (generates a .zip file)
optimizer_settings_icon.png Settings Use this icon to modify the project fields displayed in the columns of the Portfolio Optimizer, or to modify what projects you display in the Optimizer, based on their statuses. 
optimizere_full_screen.png Full screen Use this icon to display the Portfolio Optimizer in full screen mode, or to end the full screen mode and return to the default view.

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Linked to a LOT of the articles mentioned above: Net Value, Planned Benefit, Risk, Costs, etc - don't change/ remove.