Portfolio Management Knowledge Areas

Portfolio Management Knowledge Areas

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8.1 Develop Portfolio Risk Management Plan

A risk management plan is a component of the project, program, or portfolio management plan that describes how risk management activities Will be structured and performed. lt also includes reference to the corporate risk management guidelines, policies, and procedures that define the organization's risk strategy, tolerance, and thresholds for the organization. The risk management plan provides the approach that Will be used by the governing bodies for assessing risk in proposed new portfolio components.

Different types of new investments Will be considered knowing that generally venture or growth-type investments carry more attraction due to a higher potential return, but they are a higher organizational stretch and, on average, carry higher risk. In order to maximize return on investment of resources, some high-risk investments may be considered, but the risk management plan Will show how the governing bodies should work to balance investment risk and manage the overall expected return against known risks. The result is risk-based decision making.

Inputs

 

.1 Portfolio management plan

.2 Portfolio process assets

.3 Organizational process assets

.4 Enterprise environmental factors

 

Tools & Techniques

 

.1 Weighted ranking and scoring techniques

.2 Graphical analytical methods

.3 Quantitative and qualitative analysis

 

Outputs


.1 Portfolio management plan updates