Project Portfolio Management - Term Paper Example

? Term Paper: Project Portfolio Management Term Paper: Project Portfolio Management Before we can discuss theprocess and analysis of the Project Portfolio Management (PPM), it is important to understand the definition of the acronym PPM and balance score card. This is because, for an efficient and effective analysis of the process of PPM, we realize that the balance scorecard is part of this process. This is so since it is the balance scorecard that helps in monitoring organizational projects in order to ensure that the projects are in line with the mission, vision, and the overall goals of the organization. It tries to quantify these objective and goals so that they are measurable (Harvey 2005). In general, the balance scorecard balances the project so that it becomes successful. The processes of PPM analysis always follow a given systematic order or steps. The following are the steps involved in the analysis of the PPM. The first and foremost thing that one must subscribe to before he begins the project is the submission and request for projects. It involves considering projects that are of essential strategic importance to FCC. The stage requires that it is imperative to submit projects that are radar screen incorporated. It must be noted that it is at this stage that pay offs are done. This is important as it ensures that: Major threats or risks that might be experienced in the project are fully done away with through strategic alignment and integration; it also ensures that enough resources are set aside for the project therefore ensuring a successful project completion. It also balances off portfolio projects and finally, it ensures that the best practices are applied in the management of the project; this further ensures successful completion of the project, (Norrie 2010). The next stage is the project screening. This entails filtering out the projects that might not be beneficial, or that may be costly so that you remain with better ones. It entails giving preferences to project in terms of those that are better than the others are. For example, you can categorize them into groups of very direct, direct, indirect, and weak. The next stage is the project prioritization. This is done after project screening. Remember the projects are always placed in something like a quadrant after which priority is given to each project. The following formula can be used in project prioritization; Strategy +return- risk= project prioritization result (Norrie, 2010) The next stage is the project registration. After the prioritization has been made on projects, what follows is the project registration. This is always important as it makes the project to be official in nature. Registration is always done in the order of priority. (Norrie 2010) The next stage is the project activation. This is also important as it seeks to bargain for the approval and allocation of resources to a particular project depending on the amount of the resources that the project call for. It also links the project to the major projects and sets budgets for the projects. The next stage is the project completion and execution. This is done in order to monitor and measure the performance of the project; it marks the last stage of PPM process. Before we can look into the PPM processes available, it is first important to understand what models are and why they are vital in PPM. In relation to PPM, a model can be defined as a well-programmed mathematical tool that can be used to systematically determine the areas of interest in a given project. A computerized program can be used to determine the value worth of any given project before it is selected. Models are always important as they can be used to create solutions that are beyond human power; research shows that “human beings have very limited information processing skills and often make errors or are sometimes biased when making choices. However, they are good at creative skills and they can generate more alternatives. Though models are good as they can help to break complex task into pieces allowing human beings to do what they can.” A number of models can be explored which includes decision models that are two staged and are further into two sub components that entails value and simulation. Simulation model foretells the consequences that may be experienced in the cause of conducting a project. It focuses on the characteristics of the project, the requirements that the project is to address and the ability of the project to address what is expected of it. The second model is the value model. This component is used to make decisions that pertain to the relative importance of a project. It also focuses on the financial and non-financial objectives that are most likely to be impacted by the project. Another model is the Gartner’s PPM maturity model. This model is divided into six levels ranging from least mature to more mature. According to this process, there are five fundamental factors that have to be taken care of in any given projects; people, technology, and financial management, relationship, and PPM processes. Since these are the determinants of success in any given project. The PPM processes are categorized into levels according to Gartner 2007. These levels range from O to five. Level O is called nonexistent. Here, it is assumed that no formal process exists but instead it is the individual ability and better circumstances that help to get work done. The organization here does not consider the business impact associated with project mismanagement (Norrie 2010). The next level is called initial. Here the organization begins to fill the absence of a well-designed PPM process, especially as the volume of the work increases steadily. The organization now starts to realize lack of support structure. Methods of handling risk are very limited at this level. The next level is developing; at this level, the senior management accepts the value of IT spending. The organization is trying as much as possible to utilize as much techniques and methods from project to project. At this stage, some combinations of project, Program, and portfolio offices are established to satisfy the types and size of the projects being managed. The projects are closely monitored so that the set objectives are fully met. The next level is defined. At this level the differences between project and program management begin to be defined, appropriate methods have been established and communicated. At this stage, the participants understand that the program calls for appropriate knowledge and skills. The project management team is fully committed to the management of the projects. The project is viewed as containing some risks and measures are designed to mitigate these risks. The next level is managed: Entails the normal process of management to ensure that corrective mechanisms are taken into consideration in case of any deviation from the norm. The management at this level has implemented a project portfolio and the organizational structure with proper roles, responsibility and the staff performance criteria for measuring the success at each stage of the project to determine if it is in the right direction. Next level is optimization: The management responsible ensures that the users and the IT resources are best utilized to support the project initiatives. A full life cycle project and program methodology is implemented, enforced, and integrated into the culture of the program; an IT strategy for finding out active operational projects is defined (Norrie 2010). In a project, decision on what to measure can be based on the following: the output of the project, risk of the project for instance the pollution, financial balance in different projects, efficiency, we can also measure, the inputs that the project requires: The project alignment with the company’s goals and objectives; this can be done through establishing the project’s profitability impact in terms of cost, the ability of the project to improve the business processes or time and the project’s professional satisfaction of employees working the project. (Parviz 2006) Measure of organization’s ability to meet the project’s technical requirements. This can be achieved through checking the organizational technical core competency to perform the project, you can also measure the organization’s ability to provide cost competitive solutions and not limited to a measure of the project’s ability to integrate with the existing technology. Measure of the company’s ability to successfully deliver the project This measurement can only be achieved through checking the organization’s ability to complete the project on schedule; another measure could be of the organization’s ability to complete the project within the budget and finally by checking the organization’s ability to deliver functional quality solution. (Harvey2002) A balance scorecard is a strategy technique, which helps to translate the whole organization’s missions and goals into specific quantifiable goals that can be measured and achieved without any problem. It is vital since it help to monitor the project so that incase of any error, then corrective measures are taken. Robert Kaplan and David Norton developed this technique in the year 1992 and since then it has been very useful to organizations especially when it comes to monitoring the organizational goals and projects in order to make the project operational. The balance scorecard has the ability to determine and analyze the organization’s goals in four different ways, which include; financial analysis, the analysis here is in terms of how costly the organization’s project is and how much returns can be achieved from this project. The organization is then bound to such issues before the commencement of any project. (Harvey2002). For efficiency in operation, the company should develop strategies that would appeal to the shareholders to ensure that they succeed financially. These involve articulating the objectives of the company, targets, initiatives, and precautionary measures that are in place to mitigate on any possible error that may jeopardize the company achieving its desired objectives. These steps will motivate the shareholders to consider investing much in the company. Customer analysis is also an option of analyzing company’s goals, remember success of any given business project solely depends on how they interact and relate with their customers. The organization ought to ask themselves questions such as; how should they increase their customer satisfaction? Again what measures should they take in order to retain their customers? This can be done by analyzing their pricing, marketing, packaging, quantity, and quality of their products. Since these are always the basis of customer retention and satisfaction. (Robert 2006) Another way is by analysis of the internal processes, this focuses on productivity and innovation. Innovation entails coming up with new ways of doing things. To relate it to products, it can mean coming up with better product as compared to the competitors, and this can enable them to have a higher market bargaining power compared to their competitors. This in turn can translate to higher profits realized by the organization. (Forrest 2003) There is also learning and growth analysis; this looks at the quality of the management and how it satisfies the needs of the employees, it looks at the organization’s readiness and willingness to change wherever change comes. This too adds up to the success of the organization. The PPM method that can fit in one’s business according to my view is the IT PPM process. However, the selection of the best PPM method can be based on the following factors:- Tool accuracy: For instance, the method used should be one, which is accurate so that it can give satisfactory recommendation and reliable estimates that are in line with the projects’ demands. The tool selected must be acceptable to the stakeholders. An acceptable tool should be compatible with the organizational processes and culture. A tool that influences funding decisions will be perceived as a threat to some interests. Therefore, all stakeholders must have confidence that the tool will help them as well as the organization to succeed The tool must be effective: A PPM tool cannot be effective unless it fits the way in which the organization comes up with decision. The consideration for an effective tool includes time, project management, decision process, and the performance monitoring system. Such undertakings must be understood and the tool designed to track a fitting in the organization. Tools used must be practical and realistic. Reasons for prioritization of tools are accuracy, logical soundness, and completeness. Building a sophisticated tool must entail practicality that will make it significant in facing challenges with expertise. Therefore, to enhance practicality, the users must also have the expertise to understand and apply the tool. Availability of inputs is also a critical issue; resource computation must be adequate in order to enhance a time bound completion. Industrial engineering entails coming up with integrated systems that incorporate people, machines and information, they therefore enhance the efficiency of a system. Industrial engineers are capable of coming up with new integrated methods which have the ability to enhance the process of management, for instance, a cockpit which improves the performance of a fighter pilot is a product of the industrial engineering. Therefore the management of the organization works hand in hand with the industrial engineers because; they are capable of coming up with different ways of eliminating negative occurrences into the enterprise such as: waste of time, money energy and other resources. On the other hand, software engineering is that branch of engineering that mostly is associated with coming up with computer programs that can be used to enhance management of project in an organization. For instance, software engineers have the ability to come up with programs which can be used to select the best project to venture into from the portfolio; they therefore develop the requirement of a system then they plan the work of design, production, and operation of the system. Software engineering enhances (Hamido 2007) management of any given project the organization is running. With the a application of the software engineering tools such as software computer programs , the organization is in a position to run as many projects as possible since the software programs can enhance the functions of management such as controlling, staffing, planning, directing and organizing the overall project.(Tarek 2006) However, the needs of both the industrial and software engineering are more or less the same. But let us look at the needs of software engineering first: Remember any organization is always working within a given time frame, they are always willing to be through with their work in time, but as we understand, human beings cannot work above a given speed limit compared to software programs installed in computers. This then tells us that there is dire need for the use of these programs since they enhance speed and accuracy, something that a normal human being may not be able to achieve especially when the volume of the work is large. By use of the engineering programs and machines, the organizations have the ability to produce high quality products. This in turn can improve the image of the organization in the eyes of their customers hence any organization that would like to succeed in whatever project it is running is advised to ensure that both the software engineers and the industrial engineers are incorporated in the management of the project, this enhance the overall management of the project. Unfortunately, that many organizational projects have always been brought into existence most of the times fail. With regard to this, many people especially the top management teams have been asking themselves why this might be so, but in reality, going with the researches that have been carried out by some experts, the failure is highly attributed to the failure to develop and fully implement the project portfolio management. However, it is essential that the project portfolio management be implemented fully so that it ensures that all the organizational goals are fully achieved. As a project manager, it is vital to understand that an individual cannot implement the project portfolio management, and therefore it is crucial for the project manager to solicit for support from other people especially the top management. At times, convincing these top managers on the importance of initiating PPM may not be very easy, these individuals may need to know the benefits that are likely to accrue from the implementation of the PPM before fully implementing it. Therefore, it is important that one firstly, educate him or herself on the benefits that the organization is likely to acquire because of the implementation of the PPM. For a successful implementation of the PPM, it is vital that you first begin by carrying out an assessment of how ready you are to implement the PPM. In the process of doing this, you also have to ask yourself some of the questions like, have you established clear and measurable goals of the organization that you would like the PPM tool to accomplish successfully? Do I have enough finance and work force to drive the process of implementation? How flexible is my staff? Are they in a position to adopt this new technology? Are they IT enabled? on the other hand, do they need some special training in order to get into this new system? It is also important to consider the credibility of sources, for instance, you should ask yourself whether your sources, that is department and sub-departments are going to provide you with the right things you need, such as enough resources in terms of assets to venture into the PPM infrastructure. After answering all these technical questions, then now you can begin the steps towards successful implementation of the process: first, look for the signs that the PPM is needed. You can do this by finding out the previous projects that have failed or are on hold, intense competition for power and funding and lack of cooperation among the departments, a change of the project status from being active to inactive. (Andrew 1994) After realizing that there is need for the PPM, then it is important to carry out the ground survey to determine what actually is needed for successful implementation of the PPM. This is done by assessing the environment on which the PPM is to be implemented. Assessment of the ground survey is important since it enables the vendor to assess his/her clients’ needs, and to understand the needs of the environment. This helps one to provide the best practices and services to his clients. This further enables the vendor to ascertain the cost of deliverance, training, and the resources needed to successfully deploy the PPM tool in the environment. After environment assessment, the next step is deployment planning. Here is where the implementation team works with the vendors to define the future vision, roles, and the resources that are required for successful completion of the project. These factors if not well defined, then the software is not likely to perform maximally, hence it is of great importance to ensure that all the necessary factors that are vital for the effective and efficient implementation of the PPM are taken into consideration since this act as a benchmark for the realization of the organizations prescribed goals. (Parviz 2006) The next step is to choose an approach that fits, it is always important to acknowledge that there is no single universal approach to PPM; however, alternative approaches pose different methodologies of achieving the PPM goals. Therefore, it is important to choose an approach that is effective and efficient for your organization. Next is to secure an executive support, remember that, the roadmap to the implementation of the PPM is always rocky and tiresome, for instance huge finances are needed. This can only be acquired easily in the presence of the executives such as the CEO and the president. The next step is environmental specification document. In this stage, you have to ensure that your IT specialist work closely with the vendor teams in order to ensure that appropriate position to install the software is determined, after which they give a detailed report that pertains to the choice for the position to install the software within the tool. After this, then one of the IT specialist vendor should work with your IT specialist how your staff, that is the, executive, project manager and the programmer should use the tool. They should also work together to generate the processes within the software that can be used to design a specific document and also to program information in such a way that it is possible to efficiently run more than one project at a specific time. The next step after this should be the installation and configuration of the PPM tool; this should be done according to the demands of the environment and usage model documents. Nevertheless, before it is fully configured, it is important to carry out a pilot test, so that incase of any problem, then correct it before it is permanently subjected into use. The next step is the rollout, once you are convinced that your PPM process is going to work, it is important to roll it out to the rest of the organization. Again, it is prudent to set aside enough financial resources for training in order to enable your members to train and understand how to efficiently apply the PPM tools. After this stage, the next stage is the PPM administration; here is where you ensure that the vendors work closely with your system administrator, database administrator to define a roadmap for tools administration and maintenance procedure, roles and responsibilities. Kit is important to capture the roadmap in the administration and maintenance plan and the future direction. The last stage of the PPM implementation is the follow up, where the vendors are expected to follow up the PPM tool together with your end users to find out the performance and to get the feedback. Even after the implementation of the PPM, it is still equally important to consider the following in order to make your PPM efficient and effective: it is important to have a well-documented plan. This is important since it enables the organization to schedule the activities that are to be done so that none is left out unattended to. It also motivates the organization because members will be working with the set goals in mind. Another important factor to consider is accurate estimates of the resources requirement. This is important because it ensures that the organization work under the principle of a going concern. It also increases the productivity of the organization since when resources are available; monitoring the work and the overall production process becomes very easy. Another important factor to consider is the accurate information about the actual resources consumed. It is always important to keep a record that relates to the actual resources consumed, this is vital since it enables the organization to determine whether it is making profit or losses. It also provides information as to the amount of resources needed by the organization to fully accomplish a particular project. (Parviz 2006) Some of the problems associated with implementation of the PPM include, lack of adequate support from the executive. This is because the PPM involve strategizing and decision making process that influences the activities of the organization, therefore it is crucial that it begins from the top leadership positions and eventually spread downward For one to introduce the PPM in an organization, then it calls for huge finance and investment of time. This is because it entails learning new processes, which is likely to initiate training in order to acquire relevant knowledge and skills required. The finance will be easy to acquire only if there is support from the top leadership. Therefore, without the engagement of these great people the project is not likely to go far, possible conflicts are likely to emerge from various departments within the organization; as a result, many company-planned processes may be on hold, fail, or continue at a slower pace since there would be no common Centre of power that gives direction. (Parviz 2006) Another problem that is likely to be encountered in the context of IT project portfolio management is the unavailability of both qualitative and quantitative skill that are necessary to run the IT PPM. Remember that the success of a number of projects running at the same time not only depends on the availability of finance, but also the availability of effective and efficient human resource management. This is crucial as it allows maximum utilization of the available resources, thereby preventing possible wastages. Another problem that is likely to arise is selection of the project. As we know, after the project has been identified and documented, IT projects that had been initially proposed are usually compared with one another after which selection is made. However, at times the selection process may be biased due to the following factors: influence of the existing power constellation and and the questions of enforceability. (Parviz 2006) All these problems are likely to ruin the effective and efficient working of the company in terms of production, monitoring of the projects that are in the process and it can temporarily change the status of the company from being active, to either being on hold or inactive. Therefore, it is crucial to frequently monitor the implementation process so that to ensure all these problems are avoided. It is possible to avoid these interface problems nowadays, courtesy attributed to the IT-ROI company for their outstanding work in the development of this software. The PPM excel interface has the ability to manage variety of the ongoing projects within the company without any problem by using this software. It is also possible to efficiently and effectively manage the company’s products and services. This has an effect of increasing productivity within the company thereby enabling the company to make more profit compared to how it could have made before. DAPTIV PPM is also an important tool, which an organization can use to increase productivity in the entire field. It is vital as it contributes to the collaboration among the leaders and employees within the organization. It also reduces the complexity of reducing the diverse projects and teams since it is possible for each individual to access within the database and the type of projects that are to be accomplished within the organization. By use of the daptiv ppm process, it is possible for each member of the organization to contribute toward decision making in the organization. This motivates the staff and encouraged teamwork hence translating to increase in productivity within the organization. DAPTIV PPM process has also the capability of achieving maximum visibility into the office. This is important as it spreads the work throughout the organization, hence enabling the employees together with the team leaders keeps track of projects, and to measure the degree of progress as pertains to the set organizational goals. Among the tools is also the business case. It is the profile of the assumptions, process, and the related cash flows to be expensed during the implementation. Without the business case, it is vividly evident that PPM cannot achieve its expected milestones in any organization. Being a plan, both quantitative and qualitative, it directs the efforts dispensed in project implementation. As we all know the PPM is always important as it has the a ability to monitor various projects that are either in progress or those that has been proposed, therefore the first key performance indicator of a PPM would be based on whether the goals and objectives of a particular project has been met fully or not. For instance, one should ask himself or herself several questions during and after the completion of the project, for example, after the project has been completed, one should ask himself or herself whether the set goals and objectives have been achieved. If they have been fully achieved, then that can be a good indicator of a positive achievement, but if they are not fully achieved, then it shows a negative performance and therefore some adjustments have to be done. Another key indicator of the performance of the PPM is the measure of the productivity and the profit margin, an increase in the level of productivity and the profit margin of the organization denotes a positive performance of the PPM. These are good indicators since they show that the project chosen was good and profitable. It also denotes that the organization is on the right track and that it is likely to make even extra more income than the organization had earlier predicted. Remember the organizations always work in the environment, which is endowed with limited resources, and therefore for the organization to succeed in its endeavors, then it calls for effective and efficient utilization of these resources. For these dreams to be realized, it calls for a PPM that had been prepared with people who are responsible, accountable and with authority. If these are done, then the organization is likely to minimize on the improper wastage of the natural resources. This too is a good indicator of an effective PPM. Outcomes of PPM An effective and efficient PPM strategy poses great positive outcomes to the organization. This is because, with a good PPM strategy, the organization is capable of achieving a greater success in any given project, and the success can be in terms of the following: high productivity, high profit turnover, maximum utilization of resources, high employee motivation and many others, but how are these achievements possible with the PPM? This is because the PPM ensures that the project in progress is in line with the organization’s needs and initiate ways, for instance technological strategies for achieving the set organizational goals. The PPM therefore provide a framework that ensures a sound moral financial, business and technological decisions which will impact positively for the projects are achieved. By application of the PPM, better risk management is achieved, this is because by continuous monitoring of the project, it is possible to easily identify some factors that could cause risk within the organization, and therefore corrective mechanism is taken which minimize risk occurrence. With PPM, the project management can get an easy and creative solution to problems such as provision of temporary accommodation, hotel services, and establishment of regional offices for the same organization thus minimizing the construction costs of such structures for the provision of services. PPM in such a case or situation would have assisted in the supply of commodities to the organization. The essence of using PPM framework enhances change within the organization. Since PPM is linked to Information Technology (IT) several changes, innovations and improvements can be detected by the organizations thus preventing them from being static. Changes within the company will improve the management techniques and provision of services and efficient delivery to the consumers. (Flinn 2010). Since through the use of PPM the company has the ability to have a proper division of labor, it becomes easy to establish and answer the question of ‘Who does what?’ know who does what within the organizations, this enables the companies to achieve greater levels of accountability and transparency. Reference List J. A. Flinn. (2010). The Success Health check for IT Projects: An Insider's Guide to Managing IT Investment and Business Change: New York. John Wiley and Sons (pg28). Print. Wilhelm A. (2006). Agility by ARIS: business process management: yearbook business process excellence: USA.Springer (pg. 273) print Harvey A. (2005) Project Portfolio Management: a practical guide to selecting projects. New York: John Wiley and Sons (pp 487) print Harvey A. (2002) Practical project management: tips, tactics, and tools. 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