This chapter describes scenarios, scenario components, and how to create and manage scenarios.
This chapter covers the following topics:
A scenario is a collection of projects that serves as a planning instance for a planning cycle to support funding approval decisions. Projects that are eligible to be included in the portfolio are collected into the initial scenario of the planning cycle. You use the initial scenario as a basis to create additional scenarios. A project can belong to more than one scenario in the current planning cycle, but cannot belong to more than one portfolio.
As a portfolio analyst, you can build multiple scenarios to compare the projected financial results of funding different project combinations. You can add projects to scenarios. You can remove projects that are not good matches for the planning cycle, if their funding status is Proposed or On Hold.
The Vision Corporation organization contains a portfolio named Plan for Capital Spending. The portfolio is used for the management of capital spending across the enterprise for each fiscal year.
The Plan for Capital Spending portfolio contains the following scenarios:
Initial Scenario includes all R&D projects that were collected when the planning cycle was initiated.
Expand the Business includes all R&D projects targeted at expanding the business line and service offerings.
Increase Margin includes all R&D projects targeted at sustaining the existing output and revenue targets.
Acquisition Planning includes all R&D projects that should be pursued if the acquisition of the Vision Services company receives shareholder approval.
The portfolio analysts at Vision Corporation can perform a what-if analysis of the scenarios to determine which scenario projects to fund. Alternatively, projects from different scenarios can also be mixed to perform the what-if analysis.
Projects that are not successfully pulled into a scenario are displayed on the Planning Cycle Exceptions page.
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From a scenario, you can access a summary of the financial and strategic metrics of the projects in charts, graphs, and lists. From each scenario, you can obtain information that helps you to make project funding decisions.
The scenario charts and graphs enable you to compare the performance of a scenario with the planning cycle targets. The following table shows information about the scenario charts and graphs, including the scenario regions or scenario pages where each of them can be viewed:
| Chart / Graph Name | Scenario Region or Scenario Page | Type of Illustration | Description |
|---|---|---|---|
| Investment Map - Risk by Value | Summary | Chart | Compares the return on investment to the risk assessment for each approved project in the scenario |
| Total Scores versus Targets | Summary, Strategic Alignment, Strategic Objectives (Compare Scenarios page) | Graph | Compares a scenario's total score to the target score ranges defined for each strategic objective. This graph can also be used to compare total scores of multiple scenarios with their target scores. |
| Funding Variance | Summary, Financial Justification, Financial Metrics (Compare Scenarios page) | Graph | Shows funds available, funds required, and funding variance for each investment class code defined for the scenario |
| Investment Mix | My Portfolios | Pie chart | Displays the percentage of the sum of total cost for approved projects as contributed by each investment class category |
| Funds Required | Summary, Financial Justification | Pie chart | Shows the percentage of required funds that has been met for each of the scenario's financial metrics |
| Risk Map | Investment Ranking | Graph | Can be configured to display either the funds required or net present value of the scenario projects by selecting the metrics for the x-axis and the y-axis. For the x-axis you can select risk percentile, organization, and portfolio. For the y-axis you can select user rank, investment index, financial percentile, and strategic percentile. |
| Risk versus Targets | Strategic Alignment | Graph | Compares the target risk score, target score, and risk score for the scenario projects |
| Risk Analysis | Strategic Objectives (Compare Scenarios page) | Chart | Compares the weighted strategic scores (investment index) to the risk assessment for each project in the scenario. Bubbles represent scenario projects. The size of each bubble is related to the level of risk for the project. |
| Percentage of Target Value | Financial Metrics (Compare Scenarios page) | Graph | Shows the target value percentage that has been met for each scenario's financial metrics |
To view the scenario charts and graphs:
Open the scenario from the current planning cycle.
You can review the charts and graphs from different regions of the scenario. For example, you can review the Risk versus Targets and Total Scores versus Targets graphs from the Strategic Alignment region of a scenario.
Every scenario contains detailed information that is organized into regions on the Scenarios page. For example, all project-related information is present in the Project Status region of a scenario.
To access the various regions of a scenario:
Open the Scenarios page.
Access the scenario for which you want to view the regions.
You can view the following regions for a single scenario: summary, investment ranking, strategic alignment, financial justification, project status, and basic information.
You can review and modify the information of the scenario regions.
You can use the default view, or you can personalize your view of project details to display any of the scenario information.
The summary region displays charts and financial information for each project in the scenario. The following table shows some examples of the information in the summary region:
| Metric | Description |
|---|---|
| Projects by Classification | A listing of each project, ordered by the Investment Class category |
| Planned Benefit | Sum of revenues that occur within Funding Period From and Effective Period To |
| Total Score versus Targets | A chart comparing the target scores with the actual scores for the strategic objective of each metric |
| Payback Period (months) | The number of months starting from the Funding Period From date, that it takes to recoup the total cost |
| User Rank | Ranks given to projects to recommend them for approval |
The following table shows examples of some of the charts and graphs in the investment ranking region:
| Metric | Description |
|---|---|
| Risk Map | Configurable chart displaying (as a bubble) funds required or net present value for a scenario |
| Strategic Criteria | Prime measures for scoring a project |
| Investment Index | Overall percentile of the project investment |
| Current Financial Data | Enables you to view the status of the existing financial information. Refreshing the financial information enables you to obtain the latest financial information from Oracle Project Management. |
The strategic alignment region displays charts for the strategic investment metrics and financial and strategic details for each project in the scenario. The following table shows some examples of the information in the strategic alignment region:
| Metric | Description |
|---|---|
| Risk, Strategic, and Business Assessment | Strategic objective groups that are used to score projects |
| Performance Goals and Measures | System defined strategic criteria that will enable increased utilization |
| Risk Versus Targets | Graph comparing the target risk score, target score, and risk score |
The financial justification region displays strategic metrics charts and financial and strategic details for each project in the scenario. The following table shows some examples of the information in the financial justification region:
| Metric | Description |
|---|---|
| Total Cost | Sum of costs incurred prior to Effective Period To |
| Sunk Cost | Sum of costs incurred prior to Funding Period From |
| Net Present Value | Sum of present value for all periods between Funding Period From and Effective Period To |
| Funds Allocated | Indicator that projects will receive or will not receive funding |
The project status region displays project metrics for each project in the scenario. The following table shows some examples of the information in the project status region:
| Metric | Description |
|---|---|
| Overall Performance Status | Project overall performance indicator |
| Financial, Schedule, and Health Indicator | Indicator of project details |
The basic information region displays project metrics for each project in the scenario. The following table shows some examples of the information in the basic information region:
| Metric | Description |
|---|---|
| Start and Finish Date | Project starting and ending dates |
| Priority | Project priority value |
| Project Number and Project Manager | All details of a project such as the project manager's name and the project number |
| Return on Investment | Index that evaluates projects for which net present values have been determined |
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Formulas in Oracle Project Portfolio Analysis
You can build scenarios to review and compare the financial, strategic, organizational, and technical fit of the projects in the portfolio. You can define the funds available for scenarios so that the proposals stay within the available funds.
To create a scenario:
Access Scenarios to open the list of scenarios for the planning cycle.
Open the Create Scenarios page.
Enter a scenario name. You can optionally enter a scenario description. You can create a scenario by copying an existing scenario and then correcting information as necessary (such as discount rate and funds available). When you copy a scenario, all the projects, including their project scores and funding approval statuses, are copied into the new scenario. If you do not copy the proposed projects when you create a scenario, you can add the proposed projects later.
Apply the changes.
After you create a new scenario, you cannot manually add projects to the initial scenario. As you add projects to new scenarios, they are automatically added to the initial scenario. The initial scenario contains all projects in the portfolio.
You cannot delete a scenario after it has been created. However, you can create another scenario and use other project combinations to satisfy your business requirements.
You can add projects to a scenario if the scenario has not yet been recommended for approval. If the scenario has been previously recommended for approval, you can withdraw the scenario to cancel the recommendation. You can modify the withdrawn scenario and resubmit it for approval.
To add a project to a scenario:
Open the list of scenarios for the current planning cycle.
Select the scenario that should contain the new project.
Select Add Projects.
Enter the project search criteria. You can choose to include in the search other projects that were submitted for the current planning cycle, or projects from the initial scenario.
Select the projects that you want to add to the scenario. When you add a project to a scenario, the project is also added to the initial scenario.
When you refresh financial information, the project's cost and benefit information is updated from the current baseline versions of the financial plan types from Oracle Project Management.
To refresh the financial information of a project:
Access the Scenarios page and open a scenario.
From the Current Financial Data column you can view the projects that have or do not have the latest financial information.
Select the project for which you want to refresh the financial information.
Select Refresh.
You cannot refresh the project financial information in the following situations:
After a scenario is recommended
After a scenario is approved
When a planning cycle is in Closed status
You can remove projects whose Recommended Funding Approval Status is Proposed or On Hold from a scenario if they do not satisfy your organization's business objectives.
To remove a project from a scenario:
Open the scenario.
Select the project that you want to remove from the scenario.
Choose Remove.
Important: After a scenario is recommended and the portfolio plan is approved, projects that were removed from the scenario maintain their Proposed or On Hold status in Oracle Project Management.
The portfolio analyst can open a scenario and review project details that are stored in Oracle Project Management. You can view the project details, such as the project scorecard, and a summarized overview.
To view projects in a scenario:
Open the scenario whose projects you want to view.
Access the Projects section in the scenario.
From the list of projects, select and open the project to view the project details.
After you build scenarios, you can analyze the scenario contents. You can compare and rank the projects, and you can compare the scenarios.
When you rank projects, you develop a prioritized list of projects in the scenario. Ranking projects helps you identify which projects to recommend for approval.
The portfolio analyst can review the weighted strategic scores and financial details of projects in a scenario and measure the overall benefit of each project for the funding period. You can then prioritize the projects, and choose how to rank them based on the financial performance and the weighted strategic scores.
To rank a project:
Compare the weighted strategic scores, financial criteria, and available charts for each project to determine the best investments for your organization.
Open any region of the scenario, such as the Project Status region.
Enter a value for the user rank of each project based on the financial and strategic measures of the projects. Assign a unique rank to each project.
Note: When you view the Scenario page, you can sort projects on selected metrics, including the assigned rank. The system allocates funds based on the latest order (sort) of projects.
Project ranking is an analysis tool that you can use to augment the strategic criteria values. For example, you can assign a high score to a project in one scenario based on one of the project's strategic objectives, but assign a lower score to it in another scenario based on a different strategic objective.
You can change the rank of your projects from the Investment Ranking, Strategic Alignment, Financial Justification, or Project Status regions of the scenario.
The following table compares some financial and strategic metrics for the projects Vision Medical, Vision Aerodynamics (Vision AD), and Vision Hydraulics:
| Project | Funds Required | Planned Benefit | Weighted Strategic Score | ROI | Net Present Value | User Rank |
|---|---|---|---|---|---|---|
| Vision Medical | 194 | 495 | 83.4 | 0.6 | 265 | 3 |
| Vision AD | 1,076 | 3,049 | 83.9 | 1.5 | 2,042 | 2 |
| Vision Hydraulics | 110 | 550 | 91.5 | 1.7 | 190 | 1 |
Portfolio analysts can assign ranks to projects based on different criteria. Vision Hydraulics has the highest return on investment, which might seem attractive to certain portfolio analysts and prove a good match for their business needs. In this example, the portfolio analyst has assigned Vision Hydraulics the highest user rank due to an attractive weighted strategic score and return on investment.
After you analyze projects in a scenario, you can recommend the favorable projects for funding approval.
To select the recommended funding approval status:
Open the scenario. You can select the Recommended Funding Approval Status from any of the following regions in the scenario:
Investment Ranking
Strategic Alignment
Financial Justification
Project Status
Basic Information
Select a project.
Choose to recommend the project, reject the project, or place the project on hold.
The available portfolio funds are automatically allocated after you select the Recommended Funding Approval Status. The available funds are allocated to Approved projects for the specified funding period of the planning cycle. Graphical indicators in the scenarios enable you to identify which projects will receive funding with the current funds available for each scenario. The funding process identifies the projects that can be pursued using the planning cycle's available funds.
Note: Funding in Oracle Project Portfolio Analysis considers only the costs that will occur in the funding periods, and does not consider benefit or revenue amounts. The funds allocated do not need to be within the baseline budget amount.
The following table lists the statuses available for recommending funding approval:
| Status | Description |
|---|---|
| Approved | The project is recommended for approval in the scenario and funds are allocated. (The name of the status is Approved, but you select the Recommend action.) |
| On Hold | The project is placed on hold in the scenario and funds are not allocated. Projects in this status are collected in the next planning cycle. |
| Rejected | The project is not recommended for approval in the scenario and funds are not allocated. |
You can compare scenarios to determine which scenario best fits the financial metrics and strategic objectives of the planning cycle. You can use charts, graphs, and tables to compare the financial and strategic performance of the scenarios in a planning cycle.
To compare scenarios:
Access the Scenarios page.
Select and open a scenario.
Select Compare Scenarios to access the View Comparisons page.
Select up to three scenarios for comparison.
The View Comparisons page contains graphical measures of the strategic objectives and financial metrics of the selected scenarios. The scenarios that you selected for comparison are displayed together in the graphs to help you select the scenario that best meets your organization's objectives.
Strategic objectives enable you to compare non-financial metrics of the selected scenarios with their targets. Financial metrics enable you to compare financial metrics and funding information of the scenarios with their targets. You can view the scenarios that require extra funds and those that meet the financial targets.
Exception indicators show which scenarios are within the target ranges for weighted strategic scores against defined objectives, return on investment, and net present value. After you perform an analysis of the scenarios and the projects in each scenario, you can make a decision about which scenario to recommend to the portfolio approver for approval.
After comparing the scenarios, a portfolio analyst can recommend the scenarios that are beneficial for the organization.
To recommend a scenario:
Access the Scenarios page of a portfolio.
Select the scenario you want to recommend.
Select Recommend.
Repeat as necessary to recommend additional scenarios.
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A portfolio analyst can withdraw a scenario and return it to unapproved status. When you withdraw a scenario, the Recommended status is removed. The scenario is not removed from the planning cycle. You can make changes to the scenario after the recommended status is removed.
You can choose to withdraw scenarios if you want to do any of the following:
Add or remove projects from the scenario
Make any changes to the projects in a scenario. For example, to change the rank or status of projects in the scenario after it has been recommended for approval. You can recommend the scenario for approval again after you make the changes to the scenario.
To withdraw a scenario:
Open the list of scenarios.
Select the scenario.
Select Withdraw from the list of options.