Microsoft Office Project Portfolio Server 2007, OLP-NL, GOV, D-CAL

Microsoft Office Project Portfolio
Server 2007
September 2006
Table of Contents
Microsoft Office Project Portfolio Server 2007 Overview ...............1
Gain Visibility and Control .......................................................... 2
Objectively Prioritize and Evaluate Competing Investments ............ 2
Optimize Budget and Align Investments with Business Strategy...... 3
Tightly Integrate with Office Project Server 2007 .......................... 3
Gain Visibility and Control ..............................................................5
Define Workflows and Automate Governance Controls ......................... 5
Automate Governance Processes Across the Organization .............. 5
Centralize and Streamline Portfolio Data Collection ............................. 6
Capture All Project, Program, and Application Investments Centrally6
Use Templates to Streamline the Collection of Data and Metrics ..... 6
Measure and Track Portfolio Performance ........................................ 11
Track Investments with Personalized Scorecards and Status Reports11
Governance—Scenarios ................................................................. 12
Objectively Prioritize and Evaluate Competing Investments ........14
Prioritize Business Strategy ........................................................... 14
Build Consensus Among Executives ........................................... 14
Prioritize Competing Investments from Multiple Dimensions ............... 16
Calculate Scores for Strategic Value, Risk, and Financial Return .... 16
Generate Charts to Map Potential Portfolio Investments .................... 20
Prioritize and Evaluate Competing Investments—Scenarios ................ 21
Optimize Budget and Align Investments with Business Strategy .24
Select the Portfolio Best Aligned with Strategic and Financial Goals ..... 24
Determine Optimal Portfolio Under Budget and Business Constraints24
Use Advanced Analysis to Improve Portfolio Selection ....................... 26
Break Portfolio Constraints with Efficient Frontier Analysis ........... 26
Model Different Strategic Scenarios ........................................... 27
Dynamically Assess Your Portfolio’s Business Alignment ............... 27
Finalize Portfolio Selection Using the Decision Dashboard .................. 29
Optimization and Alignment Scenario .............................................. 31
Tightly Integrate with Office Project Server 2007 .......................33
Integration with Office Project Server 2007 ..................................... 34
Exchange Data with Line-of-Business Applications ............................ 36
Office Project Portfolio Server 2007 Benefits ...............................37
System Requirements ..................................................................39
Office Project Portfolio Server 2007 ................................................ 39
Office Project Portfolio Web Access ................................................. 40
Additional Resources ....................................................................41
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Microsoft Office Project Portfolio Server
2007 Overview
Microsoft® Office Project Portfolio Server 2007 is a top-down portfolio management
solution that helps organizations to realize their potential by identifying, selecting,
managing, and delivering portfolios that best align with their business strategy. Office
Project Portfolio Server 2007, a key component of the Microsoft Enterprise Project
Management (EPM) Solution, can help executives gain visibility, insight, and control
across their project, program, and application portfolios.
Office Project Portfolio Server 2007 can help organizations to:

Automate and standardize governance processes to subject projects to
appropriate controls.

Consolidate business and IT investments within an enterprise repository to
improve visibility and insight.

Objectively evaluate and prioritize competing investments from multiple
dimensions.

Optimize budget utilization and select investments that best align with the
organization’s business strategy.

Tightly integrate with Office Project Server 2007 to track the performance of each
investment throughout its life cycle, from business case to benefits realization.
Office Project Portfolio Server 2007 is optimized for enterprise and upper midmarket
(UMM) organizations that require portfolio analytical tools to improve decision-making
and help ensure that selected portfolios align with the organization’s strategic priorities.
The solution is intended for the following stakeholders:

Executives and business decision-makers

Portfolio analysts and project management office staff

Program managers and project managers

Application managers
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Figure 1: Microsoft Office Project Portfolio Server 2007 Positioning & Messaging Statements
Gain Visibility and Control
Quickly gain visibility and control across your project, program, and application portfolios
by automating governance processes, standardizing, and streamlining the collection of
data, and tracking portfolio performance to maximize return on investment (ROI) and
improve operational efficiencies.

Consolidate the collection of essential data for all business and IT investments in a
central enterprise repository.

Define multiple workflows to standardize, communicate, and enforce the portfolio
governance framework across the organization.

Create personalized scorecards to track investments throughout their life cycle.
Objectively Prioritize and Evaluate Competing Investments
Employ proven best practice techniques to help objectively prioritize your organization’s
business strategy for the upcoming planning period. Automatically derive prioritization
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scores to evaluate the project, program, and application portfolios from multiple
dimensions.

Define and prioritize business strategy and drive consensus among executives
using the pair-wise comparison matrix.

Derive prioritization scores such as strategic value, financial value, risk,
architectural fit, and operational performance to objectively assess projects,
programs, and applications.

Generate charts to effectively evaluate potential investments within the portfolios.
Optimize Budget and Align Investments with Business
Strategy
Use embedded best practice methodologies, including the Business Alignment
Framework, to optimize budgets and recommend portfolios that best align with the
organization’s business strategy. This objective process enforces a rational rather than
emotional approach to portfolio selection, to help ensure that the selected investments
deliver the maximum business value.

Employ sophisticated optimization algorithms to determine the optimal project or
program portfolio under varying budget and business constraints.

Use advanced portfolio analytical techniques, including insight analysis, to identify
and break the constraints prohibiting the portfolio from reaching the Efficient
Frontier.

Undertake a business alignment assessment to help ensure that the selected
portfolios are optimally aligned with the organization’s business strategy.
Tightly Integrate with Office Project Server 2007
Tight integration between Office Project Portfolio Server 2007 and Office Project Server
2007 provides organizations with an end-to-end project portfolio management solution.
Office Project Portfolio Server 2007 is a key component within the Microsoft EPM
Solution, providing the following benefits:
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
Help ensure that customers and partners can quickly deploy world-class portfolio
analytical techniques and tools within the EPM Solution.

Maintain data integrity between the two environments through regular
synchronization events.

Enable portfolio analysts to link federated computers running Office Project Server
2007 to Office Project Portfolio Server 2007 and consolidate projects into an
enterprise repository.

Provide organizations with a scalable end-to-end project portfolio management
solution.
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Gain Visibility and Control
Gain visibility into your project, program, and application portfolios by using Office
Project Portfolio Server 2007 to standardize and streamline the collection of data within
one enterprise system of record. Automate the governance processes across the
organization to subject each project to the appropriate governance controls throughout
its entire life cycle. Measure and track portfolio performance to help ensure the portfolios
are managed effectively and realize the forecasted benefits.
Define Workflows and Automate Governance Controls
Office Project Portfolio Server 2007 enables you to define, communicate, and standardize
multiple workflows to help manage the projects throughout their entire life cycle, while
enforcing the portfolio governance framework across your organization.
Automate Governance Processes Across the Organization
Office Project Portfolio Server 2007 includes an intuitive workflow designer that enables
administrators to define governance phases and multiple workflows, helping to ensure
that projects are subject to appropriate controls throughout their entire life cycle. As
shown in Figure 2, each workflow is composed of a series of life cycle steps (such as
Propose Idea, Initial Review, Complete Request, Request Review, Portfolio Selection, and
Selected) which in turn are mapped to governance phases. The governance phases are
used as common denominators to aggregate and report on projects across various
workflows.
The phases and workflows establish a blueprint for your organization’s governance
framework and help ensure all projects complete the necessary deliverables and receive
managerial sign-off before moving to the next life cycle step. This audit functionality
keeps stakeholders aware and accountable as projects move from business case creation
to consideration to implementation.
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Figure 2: Example of a configurable workflow in Office Project Portfolio Server 2007
Centralize and Streamline Portfolio Data Collection
Office Project Portfolio Server 2007 enables you to quickly capture all project, program,
and application investments in an enterprise repository, with easy-to-use customizable
templates and flexible forms to help ensure you standardize and streamline the collection
of essential data.
Capture All Project, Program, and Application Investments Centrally
With Office Project Portfolio Server 2007 you can capture all projects, programs, and
applications in the Portfolio Builder module, providing you with a holistic view of all of
your investment portfolios in one central system of record. The flexible scorecard in
Portfolio Builder enables you to quickly slice and dice the investments across portfolios to
create intuitive and informative reports (for example, by line of business, program, or
portfolio).
Use Templates to Streamline the Collection of Data and Metrics
Standardize and streamline the collection of data across the organization by defining
templates and forms for each investment type (for example, project, program, and
application) using the Portfolio Builder module of Office Project Portfolio Server 2007. The
following are some examples of templates that can be created to capture critical project
data:
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
Project Request Form: Complete a project request form to capture the high-level
information for each new request, such as business description, start and end
dates, and sponsors.

Business Case Templates (see Figure 3): Develop a detailed business case for
each project request in accordance with the governance workflow including:

General Project Information: Capture general project information.

Cost Estimate: Capture detailed cost estimates.

Resource Estimates: Capture detailed resource estimates at the skill level.

Benefits Estimates: Capture both financial and non-financial benefit
estimates.

Strategic Impact: Assess how each project supports your organization’s
business strategy.

Risk Assessment Questionnaire: Derive a risk score for each project
through a configurable risk questionnaire.

Schedule Management: Capture the phases and key milestones.

Issues and Risk Management: Log all issues and risks throughout the
project’s life cycle.
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Figure 3: Example of a detailed Business Case template in Office Project Portfolio Server 2007

Application Inventory Templates (see Figure 4): Define templates to capture the
essential metrics necessary to gain visibility into your application portfolio. For
example:

General Application Information: Capture general attributes about the
application.
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
Cost Estimates: Capture application costs, and calculate annual cost of
ownership (ACO) and total cost of ownership (TCO).

Strategic Impact: Assess how each application supports your organization’s
business strategy.

Architectural Fit: Assess how each application supports your organization’s
enterprise architecture standards and strategy.

Business Process: Evaluate and keep a record of the business processes that
each application supports.

Risk Assessment: Evaluate an application’s risk through a configurable risk
questionnaire.

Operational Performance: Evaluate an application’s performance through a
configurable operational performance questionnaire.
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Figure 4: Example of an application record in Office Project Portfolio Server 2007
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Measure and Track Portfolio Performance
With the Portfolio Dashboard module of Office Project Portfolio Server 2007, you can
measure and track projects, programs, and applications throughout their life cycle, giving
you the visibility to proactively identify potential issues, make decisions, and help ensure
that your portfolios deliver maximum business value.
Figure 5: An example of a tracking scorecard in Office Project Portfolio Server 2007
Track Investments with Personalized Scorecards and Status Reports
With the reporting and monitoring functionality in Office Project Portfolio Server 2007,
you can create and view reports on your investments at any time.

My Scorecard: Analysts, managers, and executives can create personalized
scorecards to track portfolio investments, and drill down from the organization
level to view project, program, and application-level status reports.
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
Status Reports: The snapshot reporting mechanism enables project, program, and
application managers to generate periodic status reports to measure the overall
health of each investment throughout their life cycle.

Cost Management: Maintain financial controls by assessing budget versus
actual for project cost.

Resource Management: Evaluate staffing and resource utilization.

Change Request: Raise change requests for approval and automatically update
the original budget to keep an accurate baseline.

Flexible Reporting Framework: Use the Office Project Portfolio Server 2007 report
generators to customize and publish report templates so you can standardize and
streamline the reporting process across the organization.
Governance—Scenarios
Project Portfolio Management (PPM) Scenario: Jeff Chia, director of reservation
processing at Blue Yonder Airlines, believes the airline requires an online customer
reservation system. Jeff knows that there is a governance framework in place in order to
approve, budget, and implement any project.
Jeff completes a project request form, providing an overview of the project’s objectives
and the business rationale. The workflow, defined to automate Blue Yonder Airlines’
governance framework, alerts Christina Lee (senior vice president of Operations) and
Axel Delgado (general manager of the E-Business division) about the completed project
request. Upon reviewing the proposal, both approve the request and ask Jeff to complete
a detailed business case to further justify his project.
Next, Jeff completes a detailed business case, which includes capturing budget cost
estimates, budget resource estimates, and benefit estimates, undertaking a strategic
impact assessment against Blue Yonder Airlines’ business drivers, and completing a risk
questionnaire. When the business case is completed, Christina and Axel are again notified
and the project is approved to be considered for the next project portfolio.
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Application Portfolio Management (APM) Scenario: Sidney Higa, CIO of Wide World
Importers, desperately needed to get more visibility into her application portfolio. More
than 70 percent of the annual IT budget went to supporting existing applications across
the organization, and Sidney needed a better understanding of how this expense
contributed to the business. Sidney wanted to rationalize her portfolio, but she did not
have a solid grasp of the number of applications deployed at Wide World Importers, and
what business value they provided. She did know that different applications were used in
silos across lines of business and geographies, and wanted to understand if there were
redundant applications that could be consolidated or retired altogether.
As a first step, Sidney instructed her team to create an inventory of all the applications at
Wide World Importers in the Portfolio Builder module of Office Project Portfolio Server
2007. The team agreed on which key metrics and standard descriptive attributes to
capture in order to effectively evaluate the applications, including metrics for annual cost,
architectural fit, process contribution, risk, and operational performance. The team then
began to create the inventory.
One important metric, the process contribution assessment, included mapping each
application to the standard library of organizational business processes. That information
populated Office Project Portfolio Server 2007 report templates, enabling Sidney’s team
to identify functional overlap between applications that support the same business
processes, and to highlight opportunities for better application integration. After running
the report, Sidney noticed some key processes were supported by multiple enterprise
resource planning (ERP) applications, suggesting a functional overlap and a potential
opportunity to rationalize these ERP applications.
Upon completing the application repository, Sidney now had reliable visibility into the
status of her application portfolio, with the core data and a foundation to effectively
rationalize the portfolio and make application life cycle decisions.
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Objectively Prioritize and Evaluate Competing
Investments
Office Project Portfolio Server 2007 includes proven techniques to help objectively
prioritize your organization’s business strategy for the upcoming planning horizon, drive
consensus between the key stakeholders, and evaluate and prioritize competing
investments from multiple dimensions. Using embedded best practice prioritization
methodologies and tools, executives can derive common scoring criteria for projects,
programs, and applications, enabling ―apples-to-apples‖ comparisons among dozens or
hundreds of competing investments.
Prioritize Business Strategy
One of the most critical tasks in the portfolio management process is to define and
prioritize the organization’s business strategy. The Office Project Portfolio Server 2007
Portfolio Optimizer module includes the pair-wise comparison matrix used to help
executives objectively prioritize business strategy for the upcoming planning horizon.
Build Consensus Among Executives
In most organizations, executives from distinct functional domains will have different
perspectives on which business drivers are most important to the business. A vice
president of sales might consider ―increase market share‖ and ―develop new products‖
the most important business drivers, while a CIO might consider ―maximize systems
uptime‖ and ―modernize enterprise infrastructure‖ the most important. In organizations
where executives will be competing for the same budget and resources, achieving
consensus is critical.
In a facilitated business strategy prioritization workshop, the executives collaborate to
complete the pair-wise comparison matrix and assess the importance of each business
driver against each other for the upcoming planning period to help drive consensus and
calculate the business driver priorities. For example, in Figure 6, is ―Expand into new
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markets and segments‖ is moderately more important when compared to ―Improve
Customer Satisfaction‖?
Figure 6: Business driver pair-wise comparison matrix in Office Project Portfolio Server 2007
In Figure 7, we see the resulting consensus on relative business priorities for an
organization. It is very important to note that these derived driver priorities are relative
scorings and not simply ranked from number 1 to number 7.
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Figure 7: Derived relative priority of business drivers in Office Project Portfolio Server 2007
Prioritize Competing Investments from Multiple
Dimensions
With potentially hundreds of projects, programs, and applications competing for the same
limited budget and resources, formulating common scoring criteria is essential to
effectively prioritize and evaluate the competing investment proposals.
Calculate Scores for Strategic Value, Risk, and Financial Return
Make use of best practice techniques to automatically derive prioritization scores such as
strategic value, financial value, risk, architectural fit, and operational performance in
order to objectively assess projects, programs, and applications.
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Project and Programs—Best practice prioritization scores include:

Financial Value: Calculate a project’s financial value (ROI, net present value
(NPV), internal rate of return (IRR)) based on the cost and benefit estimates
captured in each business case.

Strategic Value: Objectively derive a strategic value score for each project in
Portfolio Optimizer based on the project’s impact on the business strategy (see
Figures 8 and 9).

Risk Assessment: Calculate a risk score for each project derived from the risk
assessment questionnaire.
Figure 8: Example of project to driver impact assessment in Office Project Portfolio Server 2007
One of the most important project assessment scores is the strategic value score,
which calculates the project’s value to the business. Using the Office Project Portfolio
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Server 2007 impact matrix shown in Figure 8, each project is evaluated against each
business driver and rated on a 5-point scale (for example, ―no impact,‖ ―low impact,‖
―moderate impact,‖ ―strong impact,‖ and ―extreme impact‖) depending on the project’s
contribution to quantitative key performance indicators (KPIs) defined for each driver.
This process derives a strategic value score for each project shown in Figure 9.
Figure 9: Example of a strategic value priority scores for projects in Office Project Portfolio
Server 2007
Applications—Best practice assessment attributes include:
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
Business Importance: Objectively derive a business importance score for each
application.

Architectural Fit: Map each application against the organization’s architectural
strategy and standards, and calculate an architectural fit score.

Risk Assessment: Calculate an application’s risk using the Portfolio Builder risk
questionnaire.

Operational Performance: Automatically derive an operational performance score
for each application based on a performance questionnaire in Portfolio Builder.
Of particular note, the business importance of an application is computed in Office
Project Portfolio Server 2007 using a three-step prioritization process. This prioritization
technique uses the pair-wise comparison matrix to prioritize business drivers, then uses
two impact matrices to first assess each business process’s contribution to the success of
each business driver, and second to assess the level that each application supports each
business process. This three-step process results in a business importance score for each
application in the portfolio. Application contributions to business processes are best rated
as a percentage of the process that is automated by the application (see Figure 10). The
sum of application contributions to one process must be equal to or less than 100
percent.
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Figure 10: Example of an application to business process impact assessment in Office Project
Portfolio Server 2007
Generate Charts to Map Potential Portfolio Investments
Create charts and investment maps to visually evaluate the competing investments from
multiple dimensions using the derived prioritization scores (for example, strategic,
financial, risk, architectural fit, and performance). As shown in Figure 11, applications are
mapped and can be evaluated based on their operational performance and architectural
fit.
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Figure 11: An example of a bubble chart in Office Project Portfolio Server 2007
Prioritize and Evaluate Competing Investments—Scenarios
Project Portfolio Management (PPM) Scenario: The CIO of Woodgrove Bank, Jay
Jamison, receives an e-mail notification from Dana Birkby, the PMO director at
Woodgrove, indicating that business cases for two more major projects have just been
submitted: one for an online customer mortgage system, and another to roll out a
wireless CRM solution to the sales field.
With more than 100 other project proposals already submitted, Jay needs to objectively
prioritize the project portfolio, as he will not have the budget and resources to select
from all those project requests. Jay knows that whatever projects are funded, they must
be able to show they are aligned with Woodgrove Bank’s business strategy.
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Jay arranges a Business Driver Prioritization workshop with the executive team and uses
the pair-wise comparison matrix in Office Project Portfolio Server 2007 to objectively
prioritize the business drivers and drive consensus between the CEO and other executive
stakeholders. The driver for ―grow market share‖ is calculated to be 5.5 times more
important than ―diversify product offering,‖ which likely favors the funding of the sales
field CRM system over the new online customer mortgage system.
Having objectively prioritized the business strategy, Jay can now start to prioritize and
evaluate the proposed projects. Of paramount importance to Jay is each project’s
strategic value, as well as each project’s likely risk. As part of the business case required
for every proposed investment, each project had already been subject to a strategic
impact analysis and a risk assessment in the Portfolio Builder, which resulted in scores for
both criteria.
With both the strategic value score and the risk score, Jay can make equal comparisons
between competing projects and even generate charts to visually map them together. Jay
can now prioritize his 100-plus projects by their relative scores, which will prove helpful
when it is time to select a project portfolio.
Application Portfolio Management (APM) Scenario: Sidney Higa, CIO at Wide World
Importers, has her team compile an enterprise application inventory in Office Project
Portfolio Server 2007, capturing key metrics to help her make application life cycle
decisions. With 70 percent of her budget going to existing applications, it is time to
rationalize the portfolio and make necessary changes.
Spurred by some poor risk ratings and likely functional overlap between applications,
Sidney has her analyst run a series of bubble charts that correlate risk scores to business
importance, number of users, architectural fit, platform type, cost, and a host of different
technology attributes.
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The charts vividly illustrate potential outliers, including identifying one specific ―thick
client‖ ERP application having both high business importance and high risk. Interestingly,
another ERP system used in their shipping operations business unit has a Web-based
―thin client‖ and is considered high in business importance and low in risk, and it ranks
well in operational performance. The two applications have very high functional overlap
as they support the same business processes. Retiring the ―thick client‖ ERP application
and replacing it with the Web-based system would likely save $1.25 million in annual cost
while streamlining performance and reducing risk.
Excited by the results, Sidney’s analyst further uses the charts to support a proposal for
a program to evolve from ―thick‖ client/server architecture to Web-based applications.
Moving to a standard technology would enable the IT group to better use support staff,
improve responsiveness, and reduce license costs. These aren’t new ideas, but the charts
help illustrate to the Board how the technology upgrade provides business benefit,
beyond simple return on investment (ROI).
After completing the rationalization of the application portfolio, Sidney’s team has saved
Wide World Importers about 10 percent of the IT budget. The application life cycle
decisions also result in promising new project candidates to be considered for the next
project portfolio.
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Optimize Budget and Align Investments with
Business Strategy
Select the Portfolio Best Aligned with Strategic and
Financial Goals
When you are selecting your project or program portfolio for the upcoming planning
horizon, Office Project Portfolio Server 2007 helps optimize budgets and recommend
portfolios that best align with your organization’s business strategy. This objective
process enforces a rational rather than emotional approach to portfolio selection, helping
to ensure that the selected investments are aligned with the organization’s strategic
priorities and will maximize return on investment.
Determine Optimal Portfolio Under Budget and Business Constraints
Faced with limited budgets year after year, IT and business executives must thoughtfully
and effectively allocate resources to the highest value portfolio of project and program
investments. Using sophisticated algorithms and embedded best practices in the Portfolio
Optimizer module, you can quickly determine the optimal project or program portfolio
under varying budget and business constraints (for example, cost, FTE, and inter-project
dependencies) while helping to ensure that the selected portfolio aligns with your
organization’s business strategy and delivers the maximum financial value.

Run What-If Analyses: Apply varying cost and resource constraints, optimize and
dynamically assess the impact on the proposed project or program portfolio. The
intuitive interface in Portfolio Optimizer enables analysts to run multiple what-if
analyses and compare the results in a side-by-side table (see Figure 12). The
optimization algorithm identifies the optimal portfolio under the given constraints,
selecting projects or programs that have the highest value/cost ratio.

Consider Dependency Constraints: The Portfolio Optimizer optimization algorithm
identifies the highest value portfolio while considering complex inter-project
dependencies.
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
Force in Compliance or Pet Projects: Portfolio Optimizer enables analysts to force
in mandatory projects, or even ―pet‖ projects, overriding the optimization
algorithm to ensure these projects are included in the resulting portfolio. This
analysis technique enables you to rapidly assess the impact on the portfolio’s
business value and effectively communicate the tradeoffs of including these
mandated projects within the portfolio.
Figure 12: An example of optimization what-if analysis in Office Project Portfolio Server 2007
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Use Advanced Analysis to Improve Portfolio Selection
Use advanced portfolio analytical techniques to assess the portfolio’s alignment with the
organization’s business strategy and identify and break the constraints prohibiting the
portfolio from reaching the Efficient Frontier.
Break Portfolio Constraints with Efficient Frontier Analysis
Efficient Frontier modeling enables analysts to visually identify the project or program
portfolio that will deliver the maximum strategic value under varying constraint
thresholds (such as $5 million budget or $10 million budget). Each point on the Efficient
Frontier represents a different bundle of projects (or programs) from the proposed
portfolio. The Efficient Frontier represents the best value. For example, in Figure 13 you
can see that with a $34 million budget you can achieve approximately 72 percent of the
portfolio’s total potential strategic value, although the current portfolio solution is only
achieving 60 percent. Organizations can use the Efficient Frontier in two ways:

Identify the point of diminishing return: Find the point where the curve
begins to flatten, indicating you are paying a lot more to achieve a
disproportionate amount of strategic value.

Benchmark the selected portfolio against the Efficient Frontier: Compare
the position of the selected portfolio in relation to the efficient frontier.
In reality, due to varying constraints (for example, interdependencies, project
alternatives, mandatory investments, and resource constraints), most portfolios are
suboptimal and fall beneath the Efficient Frontier (see Figure 13). Analysts can use
Portfolio Optimizer to identify and break these constraints, which will move the portfolio
closer toward the Efficient Frontier and increase the total strategic value from the
portfolio under the same budgetary constraints.
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Figure 13: A chart indicating the original portfolio has fallen short of the Efficient Frontier in Office
Project Portfolio Server 2007
Model Different Strategic Scenarios
The Portfolio Optimizer enables executives to model changes to the organization’s
business strategy and dynamically assess the impact on the existing project or program
portfolios. Using this advanced analysis technique, organizations are able to quickly react
to fluctuations in the economy or changes in their industry to help ensure that their
project and program portfolios remain aligned with their new strategic priorities.
Dynamically Assess Your Portfolio’s Business Alignment
The Portfolio Optimizer Business Alignment Framework methodology provides a rational
approach for selecting project and program portfolios that best align with business
strategy. Executives can dynamically assess the correlation between the business driver
priorities and the investment from the selected project or program portfolio.
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This technique helps you quickly see if you are over or under investing in each of the
prioritized business drivers. For example, Figure 14 shows the results of the Business
Alignment Assessment generated before optimizing the portfolio. Executives can quickly
see that this organization is under investing in the higher-priority drivers and over
investing in the lower-priority drivers, suggesting the portfolio spending is not aligned
with the organization’s business strategy.
Figure 14: Business Alignment Analysis (before optimization): Relative driver
priority versus proposed investment
However, Figure 15 shows the results of the Business Alignment Assessment generated
after optimizing the same portfolio. You can see there is a better correlation between the
business driver priorities and the total investment in the selected portfolio, suggesting a
stronger investment alignment with business strategy.
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Figure 15: Business Alignment Analysis (after optimization): Relative driver priority versus
proposed investment
Finalize Portfolio Selection Using the Decision Dashboard
The Portfolio Optimizer Decision Dashboard (see Figure 16) enables portfolio analysts to
publish key metrics and recommended portfolios (such as optimization results) into an
intuitive view, to provide executives with the data to support project and program
funding decisions (such as Approve, Suspend, Cancel). In real time, executives can
model project and program funding decisions and automatically see the impact on the
portfolio’s strategic value. The steering committee can then select the portfolio to be
funded for the planning period.
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Figure 16: The Decision Dashboard in Office Project Portfolio Server 2007
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Optimization and Alignment Scenario
Project Portfolio Management (PPM) Scenario: Wendy Wheeler, vice president of
business planning at Contoso Pharmaceuticals, is informed by the CFO that the board
approved a $25 million budget for her group. Though an increase over last year’s budget,
it is not enough to undertake every project request submitted.
Using Office Project Portfolio Server 2007, Wendy opens a project portfolio and loads the
Portfolio Optimizer. A strategic value score for each project is already automatically
calculated, so Wendy uploads cost and resource estimates from the detailed business
cases. She quickly determines that to complete all projects in the portfolio (to gain 100
percent of the strategic value) would cost $57 million. Wendy enters the budget
restriction of $25 million and runs the Portfolio Optimizer module’s optimization algorithm
to dynamically identify the best project portfolio under the budgetary constraints. The
initial portfolio selection looks good, delivering 68 percent of overall strategic value for
that budget level.
However, Wendy notices that a mandatory compliance project and two pet projects of the
CFO have not been included in the optimal portfolio. Wendy uses the force-in feature to
make sure that the compliance and CFO pet projects are automatically included in the
portfolio. This time the Portfolio Optimizer selects a new portfolio of projects, delivering
54 percent of the overall strategic value given the $25 million constraint and the forcedin projects. As expected, some higher-value projects fall out of the portfolio to make
room for the compliance project and pet projects.
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Using the Portfolio Optimizer advanced portfolio analytics techniques, Wendy plots her
portfolio of projects against the Efficient Frontier curve, which shows the best plan under
varying cost thresholds. Wendy quickly determines that the forced-in projects were
significantly affecting the portfolio’s overall strategic value, and revises her model. After
enabling the Portfolio Optimizer to re-optimize, she observes that the new portfolio,
which includes only one of the CFO’s pet projects, moved up toward the Efficient Frontier,
delivering 63 percent strategic value under the same cost constraints. Wendy decides to
save this scenario so that she can discuss the implications with the CFO of forcing in both
pet projects.
Using the Decision Dashboard, she creates a scorecard that includes the optimization
scenarios she had run the day before, and reviews the results with the CFO and team.
Finally, the CFO wants to look at the alignment between the proposed portfolio and
Contoso’s business strategy. Wendy uses the charting option in Office Project Portfolio
Server 2007 to analyze the proposed portfolio investment in each strategic business
driver (see Figure 15), and displays the relative spend from the portfolio into each driver.
The CFO likes the alignment between spending and business drivers, and agrees with
Wendy’s recommended portfolio.
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Tightly Integrate with Office Project
Server 2007
Office Project Portfolio Server 2007 integrates with Microsoft Office Project Server 2007
to provide organizations with an end-to-end project portfolio management solution.
Office Project Portfolio Server 2007 is a key component of the Microsoft Enterprise
Project Management (EPM) Solution, helping to ensure that executives gain visibility,
insight, and control across their project, program, and application portfolios.
Tight integration with Office Project Server 2007 can help ensure that customers and
partners can quickly deploy world-class portfolio analytical techniques and tools within
the Microsoft EPM Solution. The out-of-the-box integration between the two solutions
provides the following benefits:

End-to-End Project Portfolio Management: Provides organizations with a scalable
end-to-end project portfolio management solution.

Help Ensure Data Integrity: Maintains data integrity between the two
environments through regular synchronization events.

Consolidate Across Project Servers: Enables administrators to link federated Office
Project Server computers to a single instance of Office Project Portfolio Server
2007 and consolidate the collection of essential data for all business and IT
investments in a central enterprise repository.

Microsoft Windows SharePoint® Services 3.0 Integration: Integrates with Microsoft
Windows SharePoint Services 3.0 for document management.
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Figure 17: Microsoft EPM Solution architecture and example governance process
Integration with Office Project Server 2007
Office Project Portfolio Server 2007 includes the Project Server Gateway, a bidirectional
link with Office Project Server 2007. The gateway enables administrators to import,
export, and synchronize phases and milestones, resource requirement data (such as
budget, actual and forecast), resource availability data, and enterprise fields between the
two environments.

Resource Data: Office Project Portfolio Server 2007 provides resource
management at the resource type level (for example, C++ programmer, project
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manager). Named resource data is captured in Office Project Server 2007 and
mapped to a primary resource type in Office Project Portfolio Server 2007.

Schedule Data: Office Project Portfolio Server 2007 captures phase and milestone
data. The data from the detailed tasks in Office Project Server 2007 is
automatically aggregated to the appropriate phases in Office Project Portfolio
Server 2007.

Enterprise Fields: The administrator can map enterprise fields (attributes)
between the two environments.
Office Project Portfolio Server 2007 is available in English only, but integrates with
localized versions of Office Project Server 2007.
Figure 18: The Microsoft EPM Solution
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Exchange Data with Line-of-Business Applications

Office Project Portfolio Server 2007 includes a flexible import module that enables
analysts to manage the data exchange between general ledger systems and Office
Project Portfolio Server 2007.

Office Project Portfolio Server 2007 includes a read-only application programming
interface (API) to help ensure that organizations and partners can develop
connectors to third-party enterprise systems to improve interoperability.
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Office Project Portfolio Server 2007 Benefits
The following describe the top 10 benefits of using Office Project Portfolio Server 2007 in
your organization.
#1 Automate and enforce governance processes.
Define multiple workflows to subject each project to the appropriate governance controls
throughout its life cycle—from proposal to post-implementation.
#2 Employ best practice methods.
Use out-of-the-box templates—such as a business driver library or risk assessments—and
embedded best practice methodologies to more effectively manage project, program, and
application portfolios across the organization.
#3 Capture all investments within a central repository.
Consolidate business and IT investments within an enterprise repository to improve
visibility, insight, and control. Flexible configuration forms help administrators quickly
build and publish templates, standardizing and streamlining the collection of data for all
portfolios.
#4 Objectively prioritize business strategy.
Employ proven techniques to define and prioritize your organization’s business strategy
for the upcoming planning period.
#5 Effectively prioritize and evaluate competing investments.
Use best practice techniques to automatically derive prioritization scores—such as
strategic value, financial value, and risk—and develop investment maps to effectively
evaluate the competing investments from multiple dimensions.
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#6 Optimize budget and align selected investments with business strategy.
Run optimization what-if scenarios to identify tradeoffs and select the optimal portfolio
under varying budgetary and business constraints that best aligns with your
organization’s business strategy.
#7 Reach the Efficient Frontier.
Take advantage of advanced portfolio analytical techniques—for example, insight
analysis—to identify and break the constraints that can prohibit the portfolio from
reaching the Efficient Frontier.
#8 Measure and track portfolio performance.
Monitor the performance of each investment to help ensure you realize the forecasted
benefits. Re-optimize the portfolio in accordance with your governance process to help
maintain continuous alignment with your organization’s business strategy.
#9 Tightly integrate with Microsoft Office Project Server 2007.
Quickly deploy world-class portfolio analytical techniques that are tightly integrated with
Office Project Portfolio Server 2007, providing your organization an end-to-end project
portfolio management solution.
#10 Consolidate and analyze projects across federated servers.
Link federated computers running Office Project Server 2007 to Office Project Portfolio
Server 2007 to consolidate all projects within an enterprise repository, helping you to
quickly gain visibility, insight, and control across all project portfolios.
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System Requirements
Office Project Portfolio Server 2007
Office Project Portfolio Server 2007 processor, RAM, and hard disk requirements are
highly dependent on the number of services installed on the computer and the load on
the server.
Minimum requirements assume one server where all Office Project Portfolio Server
components and supporting technologies (for example, Microsoft SQL Server, Microsoft
Windows Server System™) are installed.
To use Office Project Portfolio Server 2007 you need:
Component
Requirement
Operating
Microsoft Windows Server® 2003 SP1 or higher (32-bit)
system
Single box
 Server with a processor speed of at least 2.5 GHz; RAM capacity minimum of 1
installation
GB, 2 GB recommended; disk space: 1 GB for installation;
 Microsoft SQL Server 2005 SP1 with a processor speed of at least 2.5 GHz,
minimum 2 GB of RAM
Drive
CD-ROM or DVD drive
Display
Minimum 800x600; 1024x768 or higher- resolution monitor recommended
Browser
Microsoft Internet Explorer® 6.0 with service packs (or higher) – 32 bit browser
version is supported
Network
100 Megabits per second (Mbps) connection speed is required to utilize Office
Connection
Project Portfolio Server functionality
Other
Microsoft .NET Framework 2.0; IIS 6.0; ASP.NET 2.0
requirements
Additional
Office Project Portfolio Server 2007 processor, RAM, and hard-disk requirements are
Components
highly dependent on the number of services installed on the computer and the load
on the server.

Microsoft SQL 2005 Reporting Services (included with Microsoft SQL Server) is
required for Reporting.
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Component
Requirement

Office Project Server 2007 is required to use the Project Server Gateway (the
bi-directional link between Project Portfolio Server 2007 and Project Server
2007)

Microsoft Windows SharePoint Services 3.0 (included in Microsoft Windows
Server 2003) is required for Document Management
Office Project Portfolio Web Access
Microsoft Office Project Portfolio Web Access is a Web portal used to access the
information stored in Microsoft Office Project Server 2007. Using Office Project Portfolio
Web Access requires an Office Project Portfolio Server 2007 Client Access License (CAL).
To use Project Portfolio Web Access you need:
Component
Requirement
Computer and
700 megahertz (MHz) processor or higher
processor
Memory
128 MB of RAM or more recommended (additional memory may be required
depending on operating system requirements)
Hard disk
40 MB of available hard disk space per workstation
Operating
Windows XP SP2 or later, Windows XP Tablet Edition SP1 or later, Microsoft
system
Windows Vista™ (or higher) required
Display
Minimum 800x600; 1024x768 or higher- resolution monitor recommended
Browser
Microsoft Internet Explorer 6.0 with service packs (or higher) – 32 bit browser
version is supported
Network
256KB or higher connection
Connection
Other

Microsoft Office Excel® 2003 (or higher) is required to load the matrix views
in the Portfolio Optimizer module and generate reports.

Adobe Acrobat 5.0 (or higher) is required to generate reports in PDF
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Additional Resources
To learn more about Microsoft Office Project Portfolio Server 2007 and the Microsoft EPM
Solution, please refer to the following list of related links for additional resources and
information.

Microsoft Office Project Portfolio Server 2007 Site
http://www.microsoft.com/office/portfolioserver/

Microsoft Office Project Server 2007 Site
http://www.microsoft.com/office/projectserver/

Business Value from the Microsoft EPM Solution
http://www.microsoft.com/business/epm.aspx

Microsoft Project Association
http://www.mpug.org/default.aspx

Microsoft Project Communities
http://www.microsoft.com/technet/community/en-us/project/default.mspx

Microsoft Office Project Developer Center
http://msdn.microsoft.com/office/understanding/project/default.aspx

Microsoft Office Project TechNet
http://www.microsoft.com/technet/prodtechnol/project/default.mspx

Microsoft Office Project Support Information
http://support.microsoft.com/default.aspx?pr=offpr2003
This document is developed prior to the product’s release to manufacturing, and as such, we cannot guarantee that all details included
herein will be exactly as what is found in the shipping product. The information contained in this document represents the current view of
Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market
conditions, this document should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the
accuracy of any information presented after the date of publication. The information represents the product at the time this document
was printed and should be used for planning purposes only. Information is subject to change at any time without prior notice.
This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT.
© 2006 Microsoft Corporation. All rights reserved.
Microsoft, Excel, Internet Explorer, the Office logo, SharePoint, Windows, Windows Server System, Windows Server, and Windows Vista
are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks
are property of their respective owners.
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