Evaluate the Portfolio

Managing Your Portfolios › Rationalize a Portfolio of Investments › Evaluate the Portfolio

Evaluate the Portfolio

The portfolio manager constantly evaluates the portfolio investments to keep them aligned with the portfolio goals and within constraints. You can evaluate your portfolio investments on a periodic basis (for example, monthly or quarterly during the planning meetings). If your business needs change suddenly, you can also evaluate your investments on an ad-hoc basis. For example, if your business goals change due to new market conditions. You can reevaluate your portfolio to ensure the investments align with the new strategic direction. You can cancel investments that have a relatively low business alignment (for example, extended completion dates).

Example: IT Budget Portfolio: Plan 1

Lauren reviews the IT Budget portfolio that Raj prepared and provides the following feedback:

The board has approved funding for $2,600,000.
The investments must be sorted by goals, with the Reduce Cost goal being first.

Raj incorporates the feedback into the portfolio by creating a separate plan for the portfolio (Plan1). The plan is a copy of the portfolio that Raj can change to accommodate what Lauren is asking him to do. Raj brings up the plan Waterline view and drags the investments that are associated with the Reduce Cost goal to the top of the list.

The following table shows the Plan 1 version of the IT Budget portfolio:

Investment	Duration (Months)	Goals	Cost	Benefit	Capital Cost	Operating Cost	Resources	Cost Accumulator
HR System Upgrade	6	Reduce Costs	300,000	100,000	275,000	25,000	12	300,000
Interface to Material Supplier	9	Reduce Costs	700,000	2,500,000	600,000	100,000	30	1,000,000
Cloud Based Order Intake	3	Increase Sales	100,00	750,000		100,000	3	1,100,000
Administrative Expense System	3	Improve Office Efficiencies	250,000	20,000	200,000	50,000	5	1,350,000
Back Office Financial System	9	Improve Office Efficiencies	750,000	1,000,000	675,000	75,000	15	2,100,000
Enterprise Time and Attendance	5	Improve Office Efficiencies	450,000	700,000	400,000	50,000	12	2,550,000
JIT (Just in Time) System Upgrade	5	Improve Office Efficiencies	100,000	2,000,000	25,000	75,000	6	2,650,000
Database Upgrades- Oracle	3	Better Align Technologies	200,000	100,000		200,000	6	2,850,000
Federated Security	2	Better Align Technologies	300,000	3,000,000	275,000	25,000	5	3,150,000
GUI Redesign- Supplier Internet System	4	Better Align Technologies	50,000	60,000		50,000	1	3,200,000

Lauren reviews the Plan 1 waterline view with Raj. She comments that the investments must be prioritized by Better Aligned Technologies as a top priority goal. Raj drags the investments with the Better Aligned Technologies goal to the top of the Waterline view. Plan 1 waterline view now looks like the following table:

Investment	Duration (Months)	Goals	Cost	Benefit	Capital Cost	Operating Cost	Resources	Cost Accumulator
Database Upgrades- Oracle	3	Better Align Technologies	200,000	100,000.00		200,000	6	200,000
Federated Security	2	Better Align Technologies	300,000	3,000,000	275,000	25,000	5	500,000
GUI Redesign- Supplier Internet System	4	Better Align Technologies	50,000	60,000		50,000	1	550,000
Administrative Expense System	3	Improve Office Efficiencies	250,000	20,000	200,000	50,000	5	800,000
Back Office Financial System	9	Improve Office Efficiencies	750,000	1,000,000	675,000	75,000	15	1,550,000
Enterprise Time and Attendance	5	Improve Office Efficiencies	450,000	700,000	400,000	50,000	12	2,000,000
JIT (Just in Time) System Upgrade	5	Improve Office Efficiencies	100,000	2,000,000	25,000	75,000	6	2,100,000
Cloud Based Order Intake	3	Increase Sales	100,000	750,000		100,000	3	2,200,000
HR System Upgrade	6	Reduce Costs	300,000	100,000	275,000	25,000	12	2,500,000
Interface to Material Supplier	9	Reduce Costs	700,000	2,500,000	600,000	100,000	30	3,200,000