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Project Portfolio Management-PPM- is a crucial discipline within organizations. CII has published his first documents on this area, IR303 and RS303. Project Portfolio Formation is the most important phase of portfolio management. Those projects should be selected from the list of candidate projects that create balance in portfolios and make the organizational goals achievable.
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PROJECT PORTFOLIO MANAGEMENT
Prepared by: Reza Masoumi
Nov. 2014
Project Hierarchy
2
Project 2
Project 1Program 1
Program ProjectPortfolio 1
Portfolio
Projects
Programs
Portfolio
Portfolios Projects
Project Hierarchy
3
massDOT
Bridge 2 Project
Transit Portfolio Airport PortfolioHighway Portfolio
Accelerated Bridge Program
Bridge 1 Project
Highway Program
...
State Rail Program
Green Line Extension Project
MBTA Projects
4
Characteristics of Projects
• Temporary• Unique and unrepeatable• Restrictions • Definitive objective
5
What is a Program?
6
A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.
Reference: PMI (2008), A Guide to Project Management Body of Knowledge, 4th Edition
Program
Project 1 Project 2 Project 3 Project 4Program 1
Project 5 Project 6
What is a Project Portfolio ?
7
Portfolio
Portfolio 1 Program 1 Project 1Program 2
Program 3 Project 2 Project 3 Project 6 Project 7 Project 8
Project 5Project 4
Project 9 Program 4
Project 10 Project 11 Project 12
A collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives.
Reference: PMI (2008), A Guide to Project Management Body of Knowledge, 4th Edition
8
Common Career Path
Technical – Leadership – Management – Communication
Portfolio Manager
Reference: 2014 CII annual conference – RT 303 implementation session
Research Title
9
Managing a Portfolio of Projects – Metrics for Measure
Supported by:
Research Team
10
No. Owners
1 Charlie O’Hanlon (Chair) Architect of the Capitol
2 Frederick Delie Georgia Pacific LLC
3 Roger Haynes ConocoPhillips
4 Roger Holtzclaw BP Alternative Energy
5 Richard Ikasalo SABIC
6 John Logan Irving Oil Limited
7 Shaun Tatum Southern Company
8 Timothy Wolf Anheuser-Busch InBev
9 David Wilson BP Project Performance
No. Contractors
1 Marie Robinson (Vice Chair) Jacobs
2 Scott Bergoon Hargrove Engineers
3 James Dyer WorleyParsons
4 Mohamed El-Mehalawi Faithful+Gould
5 Robert Bailey Fluor Corporation
6 Vincent Huang Parsons
7 Gary Lanier URS Corporation
8 Sandra MacGillivray Coreworx, Inc.
Research Goals
11
• Understand the portfolio management problems
• Identify techniques, tools, metrics and processes recommended for portfolio management
• Recommend practices to help improve overall portfolio management
Research Methodology
12
Collect Data
• Survey
• Interviews
• Case Studies
Analyze Data
• Identify Business Drivers
• Identify Recommended Practices
Develop Tool
• Portfolio Management Playbook
Recommended Process for Portfolio Performance Management
13
1. Determine Key
Results Areas (KRAs)
2. Establish Key
Performance Indicators
(KPIs)
3. Collecting Data
and Reporting
Results
4. Evaluating the Portfolio
Performance
Management Process
Key Result Areas (KRAs) for PPM
14
• Schedule
• Cost / Cash Flow
• Safety and Environment
• Change Management / Scope
• Resource Allocation
• Procurement and Supply-Chain Management
• Quality
• Risk Management
• Client Satisfaction
Proposed KPIs for KRAs
15
Sample Dashboard
16
CURRENT YEAR
BaseLine Forecast #### #### #### ### ### ### ### ### ### ### ### ###
Actual Re-Forecast #### #### #### ### ### ### ### ### ### ### ### ###
Cumulative Base Forecast #### #### #### ### ### ### ### ### ### ### ### ###
Cumulative Base Re-Forecast #### #### #### ### ### ### ### ### ### ### ### ###
Next 12 Months
Actual Base Forecast
Actual Re-Forecast
Cumulative Base Forecast
Cumulative Base Re-Forecast
Sep-
13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
1 1 1 1 1 2 2 2 2 2 2 2
2 2 2 2 2 2 2 3 3 3 3 3
2 2 2 2 3 3 3 3 3 3 3 3
3 4 4 4 4 4 4 4 4
2 2 2 2 2 2 2 2 2 2 3 3
2 2 2 2 3 3 3 3 3 3 3 4
2 2 2 2 2 2 2 2 2 3 3 3
1
4 4 4
2 2 2 2 2 2 2 2 2 2 2 2
2 2 3 3 3 3 4 4 4 4 4 4
1 1 1 1 1 2 2 2 2 2 2 2
1 1 2 2 2 2 2 2 2 3 3 3
1 1 1 1 2 2 2 2 2 2 2 3
1 1 1 1 1 2 2 2 2 2 2 2
1 1 1 1 1 1 1 1 1 1 1 2
1 1 1 1 1 1 1 1 1 2 2 2
Potential High Consequence Risks (D+) (Held by Projects)ID
1 D 4
2 D 4
3 D 3
4 D 3
5 D 4
6 D 4
7 C 3
8 D 3
9 D 3
10 D 4
11 D 2
12 C 2
13 D 4
14 D 4
15 C 3
16 D 4
PDRI PDRI 1PDRI 2PDRI 2iPDRI 3
Target 550 450 300 150
Actual 700 625 330 180
Risk Table
Stage 1 Stage 2 Stage 3 Stage 4Legend
Cost Performance (Current Month - Cumulative)
Cost ($m)
Planned Actual Variance
Cost Performance (Year End - Cumulative)
Planned Forecast Variance
Seve
rity
Severi
ty
Fre
q'y Project
Stage
Freq'y 5 6
Stage 2
F
G
HFailure of Personnel Transfer System
Active
Active
Active
Active
Stage 2
Stage 2
Stage 2
Stage 2
Stage 2
Stage 2
Active
Active
Active
Active
Active
Active
Active
Active
Active
Active
Cost Performance0
D
E
Stage 2
Stage 2
Stage 2
Active
Project Title
Baku Cond Lines
Schedule Performance
Risk Management
NH500 QD Project
HCFC ReplacementTiger DecommissioningBaku Cond LinesTimber Gas LiftBeachfield Flare
Project Listing
Enhanced Power Upgrade
Insecure HLV anchoring
HLV Loss of Stability: HLV Capsize
Incident occurring during Hot Work
Collision: Vessel Operations
West crane removal: Dropped objects
PAU Collision with live plant
Loss of control over live plant
Incident occurring during Hot Work
HLV proximity to platform
Dropped module/collision - HLV lifting operations
Active
$211.4 $217.7 2.98%
A
B
CStage 2
Risk
Status
11 16%9
Act
ual /
Re-
fore
cast
No
of
Var
iati
on
Sche
dule
Inde
x
Stage 4
Stage 2
Stage 2
Stage 2
Stage 2
Leading Indicators
Front End Loading (Stage 2 & Stage 3)
Overall Cycle Time (Stage 2 to Stage 4)
Project Stage
Stage 4
Stage 3
Stage 1
13
-11%
7
17%
1 2 3 4
GH Platform Removal
GH Platform Removal
GH Platform Removal
Prep for wells (BD50)
Sun Decommissioning
Sun Decommissioning
5%
1.15
0.87
8%
-20% 0.80
46
51
20
41
54
19
26 21
7 10%
Plan
ned
No
of
Mon
ths
Overall Cycle Time (Stage 1 to end Stage 4)
Stage 2 11
Cost Performance (Current Month)
Cost ($m)
Planned Actual Variance
-16.92%$16.2$19.5
Jan-
13
Feb-
13
Mar
-13
Apr
-13
May
-13
Jun-
13
Jul-1
3
Aug
-13
Sep-
13
Oct
-13
Nov
-13
Dec
-13
$147.6 $141.0 -4.47%
Cost ($m)
Jun-
14
May
-14
Jul-1
4
Aug
-14
Sep-
14
Leading Indicators
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb-
14
Mar
-14
Apr
-14
BW Gas SeparationGS Fire & Gas ProjectXP900 AccommodationsQuad 205 Polymer ProjectDRAMP
GH Platform RemovalMarine Vapour ManagementNE DecommissioningSun DecommissioningPrep for wells (BD50)
Prep for wells (BD50)
7 8
Prep for wells (BD50)
HCFC Replacement
HCFC Replacement
HCFC Replacement
Beachfield Flare
Beachfield Flare
Beachfield Flare
Timber Gas Lift
Risk Title
Primary barrier against gas-lift pressure failure: Casing Bursts
Dredging: Platform stability compromised
HLV Loss of Stability: HLV Capsize
Failure of Personnel Transfer System
E-W Crane move: DroppedObjects
$211
$218
$ m
$5 m
$10 m
$15 m
$20 m
$25 m
$30 m
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13
BaseLine Forecast $ 14.6 m $ 14.6 m $ 14.6 m $ 15.1 m $ 15.1 m $ 15.1 m $ 19.5 m $ 19.5 m $ 19.5 m $ 21.3 m $ 21.3 m $ 21.3 m
Actual/Re-Forecast $ 15.6 m $ 13.4 m $ 12.1 m $ 16.5 m $ 15.3 m $ 19.4 m $ 15.9 m $ 16.6 m $ 16.2 m $ 24.0 m $ 25.1 m $ 27.6 m
Cumulative Base Forecast $ 14.6 m $ 29.2 m $ 43.8 m $ 58.9 m $ 74.0 m $ 89.2 m $ 108.6 m $ 128.1 m $ 147.6 m $ 168.9 m $ 190.1 m $ 211.4 m
Cumulative Actual/Re-Forecast $ 15.6 m $ 29.0 m $ 41.1 m $ 57.5 m $ 72.9 m $ 92.2 m $ 108.2 m $ 124.8 m $ 141.0 m $ 165.0 m $ 190.1 m $ 217.7 m
Cost
($m
) Gro
ss
Planned vs Actual / Reforecast (Current Year)
PDRI 1 PDRI 2 PDRI 2i PDRI 3
Actual 700 625 330 180
Target 550 450 300 150
0
100
200
300
400
500
600
700
800
Scor
e
Project Definition Rating Index (PDRI)
1 24
5 6
7
8
911
3
10
12
13 1416
15
17
Implementation Report-Final Products
Reference: https://www.construction-institute.org/scriptcontent/index.cfm
Three documents:• IR - Implementation Report• RS - Research Summary• RR - Research Report
18
Dissertation
Goals:• Alignment with organizational goals
• Portfolio Balance (project types, risks, and markets)
• Maximize the value of portfolio• Choose the optimal next project
Project Portfolio Formation
19
Decision-Making Methods
Decision Analysis Methods
Single Criterion Decision Making
Decision Making Groups
Multi-Criteria Decision Making
(MCDM)
Influence Diagram(ID)
Decision Tree(DT)
Multiple Objective Decision Making (MODM)
Multiple Attribute Decision Making (MADM)
PROMETHEE ELECTREAnalytical Hierarchy
Process (AHP)
Multiple Attribute Utility Theory (MAUT)
Benefit-Cost Analysis
Elementary Methods
Pros and Cons Analysis
Maximin and Maximax Methods
Conjunctive and Disjunctive
Methods
Lexicographic Method
Outranking Methods
Simple Multi-Attribute Rating
Technique (SMART)
20
PROMETHEE
Preference Ranking Organization METHod for the
Enrichment of Evaluations
http://www.promethee-gaia.net/software.html
21
Example
1 2 3 4 5 6
Price
($)
Fuel
Consumption
(mpg)
Power
(hp)
Guarantee
Period
(yrs)
Trunk
Volume
(ft3)
Finance
Rate
(%)
1 Ford Focus 18,615 27 160 3 13.2 2.90
2 Toyota Corolla 19,700 29 132 3 13 3.86
3 Honda Civic 19,190 30 143 3 12.5 1.90
4 Hyundai Elantra 18,200 28 145 5 14.8 3.90
22
Example
23
Example Result
24
Ex-PROMETHEE
25
Ex-PROMETHEE
Questions