Project Portfolio Management, Second Edition

A Model for Improved Decision Making

Clive N. Enoch

• Publisher: Business Expert Press
• Year: 2019
• ISBN:
  9781949991260
• Edition: 2
• Topic: Business
• Subtopic: Project Management
• Index: Business

The focus of this book is aimed at providing a mechanism to determine the individual and cumulative contribution of portfolio components to strategic objectives so that the right decisions can be made regarding those components.

Project portfolio management (PfM) is a critically important discipline, which organizations must embrace in order to extract the maximum value from their project investments. Essentially, PfM can be defined as the translation of strategy and organizational objectives into projects, programs, and operations (portfolio components); the allocation of resources to portfolio components according to organizational priorities; alignment of components to one or more organizational objectives and the management and control of these components in order to achieve organizational objectives and benefits.

The interest and contribution to the body of knowledge in project portfolio management has been growing significantly in recent years, however, a particular area of concern is the decision-making, during the management of the portfolio, regarding which portfolio components to accelerate, suspend, or terminate. Failing to determine how the individual and cumulative components of a portfolio contribute to an organization's strategic objectives leads to poorly informed decisions that negate the positive effect that a sound understanding of project portfolio management could have in an organization.

CHAPTER 4

Using the Model

Introduction

In the previous two chapters, the model for determining portfolio component contribution has been described from two perspectives. ­Chapter 2 introduced the core concepts of the model using fuzzy logic as the ­chosen approach and described how the combined contribution of portfolio components (PCs) to organizational objectives could be determined. The focus was on many components contributing to individual objectives. Chapter 3 demonstrated how the model could be extended to ­consider the total contribution of single components to multiple objectives. The model, as described in Chapters 2 and 3, therefore, addresses the many-to-many relationship between components and objectives and provides a mechanism for assessing or evaluating the contribution of components to organizational objectives. Now we are in a position to use the model in a real-life example.

In order to use real data, the author requested the participation of a large financial services organization in South Africa that he was familiar with. The participant organization provided data and information regarding a subset of their organizational objectives and the portfolio components initiated to address their strategy. The objective of this chapter is to demonstrate how the model can be applied using the information from the participant organization.

The chapter begins with a brief description of the organizational context of the participating organization. The portfolio components and organizational objectives used are also described and a scenario of how the model would be used is presented, observations from the scenario are listed, and the benefit of using the model is discussed.

Organizational Context

The organization chosen for the verification was a large financial services organization in South Africa. Permission to use the strategy definition and initiatives (projects and programs) in this process was granted by the Global CIO (Chief Information Officer). It is necessary to describe the context or business environment in which it operates to appreciate the nature of the organization’s operations, projects, and programs (portfolio components). The business environment within which any organization operates involves its internal environment and external environment. The external environment is divided into the macro and microenvironments. This is illustrated in Figure 4.1 and described in the following text.

Macro Environment

The macro environment involves the local, political, economic, and social aspects, which impact the organization. The case study organization (hereafter referred to as Company A) is a multinational organization based in South Afric...

Table of contents

• Cover
• Title
• Copyright
• Abstract
• Content
• Acknowledgments
• Chapter 2: A Model for Decision Making
• Chapter 3: Extending the Model
• Chapter 4: Using the Model
• Appendix: Related Theories
• Notes
• References
• Ad page
• Backcover