7 Portfolio Value Management Flashcards

1
Q

Sense of Portfolio Value Management

A

ensure that investment in a portfolio delivers the required return as defined in the organizational strategy

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2
Q

most important principles for portfolio value management (2)

A
  • ensure that investments in portfolio components are alligned with the organization´s strategy
  • balance Portfolio Value against overall risks
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3
Q

Def value

A

an indicator of the effect an entity or offeing can deliver

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4
Q

forms of value (2)

A
  • tangible
  • intangible
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5
Q

def and examples for tangible value

A

can be directly measured: resource capacity, market share, client satisfaction, economical value

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6
Q

def and examples for intangible value

A

cannot be directly measured: brand awareness, reputation, risk exposure,…

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7
Q

key activities to effectively manage value (5)

A
  • negotiate expected value
  • maximize return
  • realize value
  • measure performance
  • report value
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8
Q

what is negotiated with whom under “negotiate expected value”?

A

Portfolio Manager negotiates the expected portfolio value vs. the required portfolio value including risk appetite of the organization and expectations with component owners and the strategy functions of the organization.

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9
Q

possible assessment approaches to negotiate expected value (6)

A
  • trade off analysis
  • market - payoff variability
  • budget variability
  • performance variability
  • market requirement variability
  • time- to market variability
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10
Q

Concepts that support the negotiation of expected value (3)

A
  • value management framework
  • evidence- based value statements
  • efficient frontier
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11
Q

tools for maximizing value (6)

A
  • Risk appetite related to input & output quality assigned to components
  • Design guidance applied to components (to prevent over- specification)
  • Application of solution constraints to force synergy between components
  • Requirement on individual components to exercise effective financial management
  • Exercise of effective financial management on the portfolio level
  • Use of the efficient frontier
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12
Q

pillars of portfolio financial management (5)

A
  • portfolio financial framework
  • portfolio financial management plan
  • portfolio components cost estimation
  • portfolio budget
  • financial management effort
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13
Q

Purpose of value assurance

A

to ensure that the portfolio can realize the negotiated required value

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14
Q

Intrests of the Portfolio Manager concerning assurance of value (4)

A
  • requirements tracking
  • acceptance criteria
  • gated reviews
  • quality assurance
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15
Q

topics for reporting value (6)

A
  • Risk reporting
  • costs required to achieve required portfolio outcomes
  • reasons for cost shifts
  • cost synergies achieved between portfolio components
  • achieved value
  • reasons for any shift in value
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