Project Portfolio Change Management

Correct Answer: To assess how proposed changes affect portfolio objectives and resources

The primary purpose of a change impact analysis in project portfolio management is to assess how proposed changes affect portfolio objectives and resources. This is crucial because:

1. It helps organizations understand the potential consequences of changes on their overall portfolio strategy.
2. It allows for better decision-making by providing insights into how changes might affect resource allocation, timelines, and project interdependencies.
3. It enables proactive risk management by identifying potential issues before implementing changes.

The other options are incorrect:

Determining which projects should be terminated is not the primary purpose of a change impact analysis. While this may be an outcome, it's not the main goal.

Evaluating individual project manager performance during change implementation is not related to impact analysis. This is more of a human resource management task.

Calculating exact cost savings from portfolio adjustments is too narrow and specific. While cost considerations are important, impact analysis covers a broader range of factors beyond just financial aspects.

A change impact analysis provides a comprehensive view of how proposed changes could affect the entire portfolio, helping stakeholders make informed decisions about whether to proceed with changes and how to manage their implementation effectively.

Correct Answer: Conduct a trend impact analysis to assess potential influence on the portfolio.

The initial step in managing a new market trend that might affect the current project mix is to conduct a trend impact analysis. This analysis will help determine how the trend may potentially influence the portfolio and what adjustments, if any, need to be made. Conducting a trend impact analysis is a proactive approach to understanding the implications of market changes before making any decisions concerning the project portfolio. By evaluating the trend, the portfolio manager can make informed decisions about whether the portfolio requires any adjustments and what those adjustments might be. The other options mention immediate adjustments to the portfolio or advising project managers to stop work, however, it would be premature to take such drastic steps without first understanding the implications of the trend through analysis. Stopping projects or adjusting the portfolio without analysis could lead to decisions that do not align with the portfolio's strategic objectives. The initiation of a benefits realization review for all projects is a more extensive activity that could follow after the trend analysis if needed but would not typically be the initial step taken.

Correct Answer: Conduct a portfolio-level risk assessment.

The first step when a high-priority market shift occurs is to conduct a portfolio-level risk assessment. This allows the portfolio manager to understand the full scope and impact of the market shift on the portfolio, prioritize the response, and make informed decisions about resource allocation and project adjustments based on actual data and risk analysis. Reassigning all project resources immediately or halting all projects not aligned with the new market shift, without first assessing the situation, would be premature and may lead to suboptimal decisions. It's necessary to understand which projects are most affected and how they align with the new market realities before making such significant changes. Reallocating budget funds before assessing the impact is also not advisable because it assumes knowledge of the impact without evidence. A risk assessment will provide the information needed to make sound financial decisions regarding budget reallocation.