Portfolio Groups › Distribute Budgeted Costs to Child Portfolios › By Example: Analysis at the Parent Portfolio Level

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By Example: Analysis at the Parent Portfolio Level

Forward Inc, Retail Banking CIO would like to push down the budgeted costs to the line managers' project portfolios. Three IT departments—Technical Operation, Application Development, and Technical Support—report to the Retail Banking business unit CIO. The CIO master portfolio contains the portfolios of each of the direct reports as child portfolios.

The illustration shows a master portfolio with child portfolios

The CIO makes the distribution equally among the three IT departments.

The illustration shows the equal distribution of costs amongst the child portfolios

The line managers, after receiving the distribution, take their allocated budget and optimize their individual investments to that budget.

Before the distribution, the Application Development department had a total budgeted cost of $525,000, and was over budget by $54,244.94.

The illustration shows the portfolio cost as over the budget before cost distribution

After the distribution, the Application Development department is now under the budget by $100,755.06 The line manager can now take on all the projects in the portfolio and still stay under budget.

The illustration shows the portfolio cost as under the budget after cost distribution

By managing a set of child portfolios from a master portfolio, Forward Inc CIO can write reports analyzing the entire IT portfolio using metrics such as ROI.