POWERFUL tools
and business savvy
2011-07-05 Portfolio Decisions announces the release of Vantage, a simple and flexible planning tool for business units and planning teams.
PERSPECTIVES™
Perspectives is an advanced portfolio management and integrated business planning tool that helps companies gain insights into their performance potential given their existing business, their opportunities and objectives. Perspectives is highly customizable, enables complex project dependency modeling, and provides an intuitive platform for conducting a wide range of planning and portfolio analysis at a business unit or corporate level, including:
Goal seeking optimization including factoring financials into the optimization, complex scenario analysis, and full value chain analysis (option valuation)
Stochastic analysis including ranges of uncertainty in aggregate performance and probability that specific objectives will be met.
VANTAGE™
Vantage is designed to support decision makers who seek to understand the relationship between their decisions and their company’s future performance, but who don’t need goal seeking optimization. This might include team leaders considering alternative development strategies, product segment leaders considering alternative segment level plans, small companies, or those who want to understand the basics of portfolio management before tackling linear optimization. As with Perspectives, our flagship product, risk and uncertainty information can be easily integrated into assessments.
The user interface and functionality for Vantage have been developed and refined through use by a diverse group of companies. It is highly customizable for your company and adaptable to any business situation. The software allows you to build portfolio models and planning models and evaluate their performance over a wide variety of metrics. Operational and financial performance changes can be viewed immediately after changing the business components and schedule.
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FOUNDATIONS™
Foundations is a tool for data collection and aggregation. It can help companies compile and manage data from disparate sources, preserve an audit history of all captured data, and facilitate processing of economics data, forecasts, strategic plans, budgets, and postreview data for use in Perspectives or other applications. Foundations supports rollup, batch loading, custom user expressions, sort, search, and drill down. It is a highly flexible tool with customizable graphics output, and direct export features to Excel.
DETAILS ON PERSPECTIVES
Perspectives uses Microsoft Excel as its user interface, making it easy to customize a portfolio model to address specific business issues. Perspectives enables clients to build robust portfolio models and analyze them systematically.
In the simplest form of analysis, investments are manually selected in various time periods. The performance forecast for each selected asset is automatically shifted to reflect its start date. The shifted forecasts are summed to yield an aggregate forecast for the selected portfolio. This allows the user to explore “what-if” scenarios by altering a set of selections, seeing the impact on the aggregate forecast, and comparing the forecast with the goals that have been defined. Selections are made in the Project Thinking Space (PTS) table, and aggregate results are displayed on the Metric View page and in the Custom Graphics display.
The PTS (Fig. 1) depicts all of the projects in the inventory in the far left column and the potential start times across the top row. Selection constraints such as minimum and maximum occurrences of a specific project are defined by the user on a project by project basis. Entering a number in the PTS determines a project’s start timing (the time period associated with the cell) and working interest (the magnitude of the value entered). Projects can be selected manually or automatically (using optimization). Projects with selections in multiple years reflect generic projects that can be repeated.
The Metric View (Fig. 2) reflects the results of the portfolio selections in terms of the input data originally used to describe each project and of any metrics the user wishes to compute at the portfolio level. The metrics used to describe individual projects and the portfolio as a whole are entirely at the discretion of the user; Perspectives has no hard coded list of required metrics.
The Custom Graphics display (Fig. 3) presents any of the data from the Metric View page that the user wishes to see in a graphical structure. Each individual graph can display a number of types of information. The forecast or expected value is displayed as a red line. Goals can be defined for any metric and are displayed using bars. Any metric can be “decomposed” to illustrate how selected segments of the business contribute to that metric. Contributions from each segment are described using area plots as seen in "Operating Exp".
Data Input
Users do not need to recreate their project economics. Importing data from any combination of economic software or databases is a relatively simple operation. Perspectives can capture single economic descriptions for a project, or multiple descriptions can be used to reflect uncertain outcomes. A model can contain both single outcome projects and multiple outcome projects.
Project Dependencies
Users can describe interdependencies among projects. A dependency might be as simple as: “A dependent project cannot be chosen unless a given independent project has already been selected”, or it might be a far more complex chain that reflects timing, interest, and selection relationships. Dependencies can also reflect probabilistic relationships. For example, if a pilot project is selected but the outcome (in a Monte Carlo simulation) is “Failure”, then all projects that are dependent upon the pilot do not contribute to the aggregate forecast.
Optimization
Optimization automatically picks the best selection of projects and start times to ensure that all the goals are met. Rather than answering the question: “What are the forecasted results from my selections?” optimization allows us to ask: “Which selections do I need to obtain the performance I want?” Most clients optimize to ensure that the goals can be met and to investigate fundamental scenarios, and then they manually refine the optimized selections to integrate their intuition and experience.
Extensibility
Perspectives gives the user the ability to customize a portfolio model to meet the specific needs of decision makers and business problems. Users frequently extend their models by creating integrated financial statements, additional graphs, and custom reports.
Integrating Risk and Uncertainty
When input data are described using multiple economic outcomes, companies can compute the probability of meeting goals and describe the range of outcomes for any and all portfolio results. This probabilistic information is available in tabular form or can be added to the Custom Graphics.
In Fig. 4, the blue and black lines reflect the P10 and P90 ranges for the portfolio.
In Fig. 5, the probabilities of meeting goals are displayed using green diamonds. When uncertainty data are included, Perspectives can optimize based on maximizing the probability of meeting a goal.