Project Portfolio Management Concepts - Research Paper Example

Project Portfolio Management Introduction Project Portfolio Management in an essential administration of the protocols, methods, processes and the technologies applied by the project officers and managers to analyze and manage a collection of the proposed or the current projects. The objectives of Project Portfolio Management are to determine the most favorable resource for delivery and to program the activities of a project so as to achieve the goals of an organization’s financial goals and other operations. The underlying tasks behind Project Portfolio Management is to honor the limits imposed by the clients, service users, customers and the other external factors. His essay shall identify 4 articles that address Project Portfolio management and then evaluate the quality and utility of each. However, the subject matter shall focus on the article considered to be bearing the highest quality and utility. The following 4 articles were chosen for the analysis: How to Implement management of Portfolio within 100 days, Craig Kilford, N.Y: Stationery Office, 2013. Internet resource {http://www.best-management-practice.com/gempdf/How_to_implement_MoP_ONS_Case_Study.pdf} The author of this article, Craig Kilford has worked as an Interim Deputy Director of Portfolio Management in the office for the National Statistics. He is also a regular blogger at www.MrPortfolioManagement.com. He is also a motivational speaker at various business conferences. His achievements in the field of Portfolio invoke the public to catch his writings. In the article ‘How to implement management of Portfolio within 100 days,’ Craig tells the audiences about the do’s and don’ts which they practiced when their organization, the Office for National Statistics intended to implement a Project for managing a Portfolio within a period of a hundred days. He highlights the position of the ONS before the implementation, the journey towards delivering the portfolio, the unit model for delivering the portfolio, the portfolio Governing model and the future of the ONS. Craig also highlights the top 8 requirements that are crucial for the implementation of the Project Portfolio Management within a period of 100 days. Project Portfolio Management, Gartner, N. J: Wiley, 2013. Internet Resource. {http://www.gartner.com/it/content/911400/911412/project_portfolio_mgmt_excerpt.pdf} This article does not highlight the achievement s of the author, but it seem to be focused on its subject matter: Project Portfolio management: A view from the management trenches. The article highlights the features of a successful Project Management Portfolio, the methods of optimizing the capacity of an organization, the checkpoints of a good Project Management Portfolio, how to incorporate changes in to a Project Management Portfolio, the Project Management Portfolio tiers, the areas to put up a Project Management Portfolio, the period and reasons when a Project Management Portfolio should be established, the foundational principles and tools for establishing a Project Management Portfolio. The articles targets the business community as its primary audiences, however, the interested public would also find the message to be vital. Project Portfolio Management:Metrics that Work, James C. B., 2012. Internet Resource. {http://www.bw.edu/academics/cpd/forums/Project_Portfolio_Management_March_2011.pdf} There is no clear information about the author, James Brown. Howevr, he is the current manager of the Research Portfolio Managing Officer of the Pionner Hi-Bred International. The article highlights the interests of any Project Portfolio management, the mandatory contents of a Project Portfolio management, the challenges or myths surrounding Project Portfolio managements, the benefits of a Project Portfolio management, the implementation steps, the models of a Project Portfolio management, the types of a Portfolio Metrics, the strategies for measuring the progress of a Project Portfolio management, various dashboard tips and sample, and screenshots of Project Portfolio management software or tools. The articles targets the business community, more so the Project Portfolio managers. This is justifiable because the article outlines statistics about the industrial sectors that searches and seeks for the Project Portfolio management between March 2010 and February 2011 both by both by Geography and sizes of the Enterprises. The article goes in to the details of the scope of a Project Portfolio Management, which could be of vital importance to aspiring and the current Project Portfolio managers. Project Portfolio Management with SAP RPM and cPROJECTs, Stefan G. & Michael S., Boston: Galileo Press, 2013. Internet Resource { http://www.sap-press.de/download/dateien/1682/sappress_project_portfolio_management.pdf} This document presents the first chapter of the entire book. The first chapter covers the overview of a Project Portfolio Management with SAP. However, this is the best article out of the four. The article gives the overview the details of a guide about how to use a Project Portfolio Management with SAP with the aim to support the processes of a business. It also shows the procedures and requirements of implementing and integrating SAP Project System as well as the usage of the SAP tools during the implementation process in a process-oriented manner. The article presents samples from the customers and various projects which illustrate specific options and solutions based on the contemporary SAP releases. The audience of the article receives the real requirements of Project Portfolio Management solutions. The audience also understands how SAP supports the integration of the sub-processes such as project execution, portfolio planning, time recording and coverage. The article offers the audience with an expert insight into SAP Resource and Portfolio Management and a comprehensive design options such as questionnaires, metrics management, scoring models, financial planning, data management and capacity determination. Additionally, the article explains the pattern options of SAP with a special attention leaned towards the project structure, resource management, documentation, evaluation and project alerts. Concepts 1. Mission/Vision: The article endeavors to explore how to carry out a Project Portfolio Management using SAP. 2. Objectives a. Hierarchy of homogenous clusters b. Limited to about seven plus or minus two in each cluster The activities of the PPM shall be categorized in to the following Hierarchy of homogeneous clusters: i. The Portfolio Management – To identify the target groups, to recruit the other management officers, to supervise the management process, to authorize the organizations transactions, to ascertain the project phases and to verify the status reports. ii. Portfolio Objects – To verify the organization’s portfolio baskets, to create the resource pools, to assign the resource managers, to check resource availability and to determine the project templates. iii. Resource management – To staff the resource requirements, to set the qualifications of employment groups, to set up qualification catalogues for the development phases, to overview the availability of employment and to present assignments for the projects to the employees. iv. Reports and Analytics - To assign the threshold values, to determine the status maintenance, to ascertain the status reports, to plan for the project costs, to control the projects portfolio management and to criticize the threshold values. 3. Projects a. Identifying /designing – To identify a project, the Portfolio manager checks through a list of the requirements presented by the customers, then designs the standard functionalities that would be applicable. b. Business cases i. Anticipated benefits – Realization of targets over a period of time, realize the values of the portfolio, realization of the non-financial benefits and managing to assign the benefits to the owners. ii. Costs – Implementation of the technical requirements, recruitment of skilled personnel and staff and acquiring the required resources. iii. Risk and risk assessment – Risk management assures the business to achieve profits. Certain risks can be negotiated in order to verify the bearer, then the business would be able to built in to them. Besides, the contracts could be chosen then valued at the appropriate level for the business. c. Pre-screening/ screening – This is a form of portfolio selection through assigning objectives followed by weighing the presented projects against the overall objectives of the business community. d. Evaluate alternative design – These involve assessment plans of the progress of the portfolio against the time scale. The procedure determines whether there is need for refining the operations of the project. e. Activity levels – These are the viable steps that lead to the formation and implementation of the project portfolio. The steps include the needs identification, project proposals, pre-screening, project selection, portfolio refinement, portfolio adoption and then review and evaluation. 4. Alignment – The project investment is aligned to corporate the portfolio’s strategy. 5. Governance and Roles – These are the frameworks that govern decision making for the project portfolio management. They include sponsoring the projects and all the accountabilities and responsibilities regarding the projects. 6. Measurement a. Objective Priorities – in measuring objective priorities, the available options have to weighed against their possible scores, their potential rates of return, constraints and investment risks. b. Project contributions to objectives – After unfolding the projects held in a portfolio, there are bound to be adjustments that should be made depending on the changing times and the volatile market conditions. Thus, the projects contributes towards building objectives. 7. Synthesis to produce ratio scale priorities of projects (anticipated benefits) – This is the protocol towards determining the proportion of funds accorded to each project held in the portfolio. 8. Optimize Portfolio a. Dependencies – These are the factors that determine the projects that offers the best value for the resources invested in a portfolio. Usually, they include time, scope and the budget. b. Resource constraints – these include the reserves that facilitates portfolio optimization under the limits of finance, available skills, human resources and assets. c. Optimization i. Objective Function – This is the act of selecting he proportions of several assets held in the portfolio so that it emerges to be the best under a similar criterion. ii. Decision Variables – These includes portfolio balancing, project sequencing, capacity management and the cost-value factors. iii. Constraints – Includes timescale, available resources, d. Efficient Frontier – This is when a portfolio looks to be efficient based on the potential level of returns upon the level of risks. e. Incorporate Project Risks – these are factors which lead to the failure of project portfolios. They include poor project specifications, over-optimism, under-resourcing, over-dependence on one individual, unrealistic time scales and inappropriate staff. 9. Portfolio Risk a. Balance – A viable portfolio balances between what the technician design, what the timescale allows, what the user wants and what the budget can allow. b. Coverage -The Portfolio risk should be discrete within realistic objectives, the defined scope and available time. 10. Scenarios (Analyzing with different sets of assumptions) – Scenarios that come up include over-optimism, unrealistic timescales, under-resourcing and newly propping expectations. 11. Project and Portfolio Performance a. Multi-objective project performance evaluation. i. Including, but not exclusively Earned Value The Treynor Measure: Applies the concept of security market lines. The higher the Treynor measure, the better the portfolio. The Sharp ratio Measure: determines the standard deviation of a portfolio. The Jensen Measure: Calculates the excess returns generated from a portfolio over an expected amount of return. ii. Rolling up project performance to measure portfolio performance – This applies when calculations involve discounted cash flow approaches like the Dollar-weighted returns and the Time-weighted returns. Read More