Analyzing, Balancing, and Approving Investments

Summary

Analyzing, balancing, and approving investments follows the investment ranking process, and involves reviewing leading candidate investment scenarios, re-ranking the investments as needed, making sure the investments are timed with available capacity, and selecting, approving, and baselining a single scenario. Once the best scenario is selected, it is published to execution kicking off lifecycle steps for the approved investments. 

The recommended process is to first do the initial ranking via the Rank pivot view. Investments can be ranked based on a combination of their attributes (e.g., investment and risk scores, strategic alignment, etc.), financial measures (e.g., expected revenue increase or cost reduction, capitalized costs, etc.), metrics (e.g., NPV, ROI, IRR), and other defined attributes.

Then, once you've effectively ranked your investments based on the benefit/risk score, financial metrics, and other attributes, you move to the Analyze pivot view. The analyze process involves determining which investments to accept in the portfolio, within defined financial thresholds, and based on rate of return, benefits, ranking order, and whatever other attributes/columns you've configured as part of your analysis. Note that these approvals are kept only within the scenario and portfolio until they are published. Until then, they are "virtual" decisions. When the publish step occurs, then changes are visible to Planview Enterprise users outside of the Planning menu, lifecycle steps are triggered, and notifications are sent to the appropriate resources. 

Note that you can create various scenarios (alternate portfolio mixes and/or configurations) either as part of the ranking process and/or during the analyze process, based on your needs.

Once you've conducted general analysis about which investments make the most sense, and have accepted the investments that fit within your strategic and financial targets, you can move to the Balance pivot view. This is a powerful tool for assessing what types of needed resources are available when, and which types of resources are over or under utilized. During the balancing process, in which investment decisions are vetted against available capacity before final approval and scheduling, you can adjust specific dates or update financial approval, make status changes to specific investments, or adjust/shift capacity as needed.

Finally, once that detailed capacity/demand analysis is complete from a resource availability perspective, you can baseline and promote the chosen scenario. Baselining is simply a matter of saving a selected scenario and designating it as the baseline. You can then publish the scenario to the "shared" scenario as well as to demand (i.e. execution). Publishing the scenario to execution typically kicks off lifecycle steps for each of the approved (and possibly denied) investments, triggering notifications to the appropriate resources to complete the next steps to move forward with the investment (project, program, or product).

It should be noted that investment portfolio decisions should be re-examined at least quarterly or as market conditions change, and ideally monthly. This allows up-to-date financial data and schedule data to be reviewed and the investments to be re-evaluated against the current climate. Portfolio analysis is an ongoing and dynamic endeavor, not a one-time event, and the overarching motto should be: frequency breeds accuracy.

The remainder of this best practice explains the Analyze and Balance phases in more detail, and elaborates on the approval and scenario baseline processes.