Mastering Portfolio Management with Project Online 3/5: Create Portfolio Analysis
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Transcript of Mastering Portfolio Management with Project Online 3/5: Create Portfolio Analysis
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Mastering Portfolio Management with Project
Online
Jakub MarciniakDeltaBahn, LLC
Part 3/5: Create Portfolio Analysis
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Define Business Drivers
Create Driver Prioritizations
Create Portfolio Analysis
Perform Scenario Portfolio Analysis
Adjust Project Portfolio
Mastering Portfolio Management with Project Online: Create Driver Prioritizations
Identify new and ongoing projects that are strategically relevant, cost efficient and resourceful.
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Creates a common understanding of quantitative data of comparable projects
Gives insights on portfolio performance in real-time
Helps to answer questions if the projects should be done (strategic), can be done (cost) and if yes, when (resources)
Supports decision-making, especially for difficult cases (terminating a project; overfunding; setting on hold…)
Purpose and goals of Portfolio Analysis
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Terminate projects that are not performing well (too many sunk cost, resource shortage, mismanagement, …)
Adjust funding and resources for well performing projects
Drive discussions to optimize individual project performance by increasing/decreasing expectations on scope, skills needed, etc.
Advantages of Portfolio Analysis
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COO Prioritization
CIO Prioritization
COO Annual
Cost Baseline
Driver Prioritizations
Process hierarchy of driver prioritizations and portfolio analysisCMO
PrioritizationExecutive Consensus
HR, Sales, Marketing Talent
Innovation Prioritization
CIO Annual CMO AnnualExecutive Consensus
AnnualHR, Sales,
Marketing Talent Innovation Annual
Cost Baseline Cost Baseline Cost Baseline Cost Baseline
20m 18m
Portfolio Analysis Definition
Scenarios(Cost)
15m 12m
Scenarios (Resources)
Resources Baseline
Resources Baseline
Resources Baseline
Resources Baseline
Resources Baseline
30 FTEs
40 FTEs
20 FTEs
50 FTEs
250m
230m
200m
180m
80 FTEs
90 FTEs
70 FTEs
100 FTEs
250m
230m
200m
180m
250m
230m
200m
180m
250m
230m
200m
180m
80 FTEs
90 FTEs
70 FTEs
100 FTEs
80 FTEs
90 FTEs
70 FTEs
100 FTEs
80 FTEs
90 FTEs
70 FTEs
100 FTEs
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Define portfolio analysis parameters
Identify driver prioritization set• HR, Finance, IT,
Executive Consensus, …
• Determine analysis frequency
Select projects• Projects A, D, G, H,
J, M, P, S, T, X, Z
Select primary cost constraint• ROI• Cost• NPV• IRR
Select planning horizon for resource analysis• Fiscal year (2017,
2018, …)• Budget cycle
Validate business driver rankings• Extreme• Strong• Moderate• Low• None
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Questions to support identifying portfolio analysis parametersPrioritization set
From which perspective are we looking at? What is the most important goal that this perspective
emphasizes?Frequency of Analysis
How long are our projects on average? How often do we want to decide (corrective or
preventive) actions?Projects for analysis
Planned vs unplanned Started vs not started By stage, e.g. Initiate, Plan, Execute, Close Special states, e.g. canceled, deferred, on hold By organizational entity, e.g.Finance, HR, Marketing, IT,
Product Development By project type, e.g. <$250,000, >$1,000,000; 500+
work hours, 1000+ work hours; impacts <500 people, 501-1000 people
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Questions to support identifying portfolio analysis parameters (continued)
Primary cost constraint: What is the primary performance metric for the
given set projects? (ROI, Cost, NPV, IRR, …)Planning horizon for resource allocation
Which cycle are we looking at? (specific budget cycle, fiscal year, …)
Are the projects sharing resources?Validity of rankings of projects impact on business drivers
Relative to other selected projects, is the current impact on the business drivers still valid?
Is the impact still valid under the current perspective (aka the chosen prioritization set)?
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How to create portfolio analysis in Project Online
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Navigate to the Portfolio Analysis
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Portfolio Analysis Overview
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Portfolio Analysis Properties
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Portfolio Analysis Properties (continued)
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Prioritize Projects
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Review Priorities
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Key Takeaways
The goal of portfolio analysis is to identify new and ongoing projects that are strategically relevant, cost efficient and resourceful.
Drives discussions qualitative discussions of senior management by providing a quantitative, comparable overview.
Parameters can be logically derived from the goal of the prioritization set chosen.
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Q & A
Reasoning
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Plant
Building Operating
Building and operating a
plant
Plant A
Building
Site Grading and Utilities Foundations
Steel Erection Form and Pour Concrete
Plumbing Electrical
Operating
Quality ControlStandard Operating
Procedures
Employee Training Maintenance
Single Project Master Project with 2 Sub Projects
Portfolio APlant B
Building
Site Grading and Utilities Foundations
Steel Erection Form and Pour Concrete
Plumbing Electrical
Operating
Quality ControlStandard Operating
Procedures
Employee Training Maintenance
Portfolio B
Program
Q: My organization manages only a few large projects. Does a portfolio analysis make sense?
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Q: My projects have different performance metrics. How can I compare them in a portfolio analysis?
Refer to Step 2- Select projects: Try to find a subset of projects that share performance indicators and define those for the other projects that should be analyzed based on an estimate.
Create an “index of success” on a scale 1-10 or based on percentage. Define and communicate those well. Experiment with the analysis and review the definitions to reflect reality. Continuously improve and refine the definitions over the next cycles of analyses.
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TimeGoals
ResourcesDimensions to consider adding to precisely prioritize importance and sequence
By stage: e.g. Demand, Initiate, Plan, Execute
By organizational entity: e.g. Finance, Product Development, IT, HR
By project type: e.g. Length (3, 6, 9, 12 months), Cost (<250k, <500k, <1m), Impact (high, medium, low)
Q: I have too many projects that are all equally important. Should I exclude them from the portfolio analysis?
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Q & A
Technical
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Q: Resources are not centralized. How can I perform a proper resource portfolio analysis on my projects?
Add resources manually to the resource pool
Assign standard cost to the resources
Assign resources to the most crucial
tasks on each project
Add resources manually to the resource pool
Assign standard cost to the resources
Create new, arbitrary tasks*
for these resources
Option B
Option A (recommended)
* New tasks affect the project plan. Interpret with care.
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Q: I don’t see the “Portfolio Analyses” on the left side. What can I do?A: Edit Links in the Quick Launch navigation
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A: Set up departments Assign user to departments Assign portfolio analysis to one Department
Q: How do I analyze the portfolio for a specific department?
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A: Set up departments Assign user to departments Assign portfolio analysis to one Department
Q: How do I analyze the portfolio for a specific department?
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A: Set up departments Assign user to departments Assign portfolio analysis to one Department
Q: How do I analyze the portfolio for a specific department?
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A: Set up departments Assign user to departments Assign portfolio analysis to one Department
Q: How do I analyze the portfolio for a specific department?
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A: Set up departments Assign user to departments Assign portfolio analysis to one Department
Q: How do I analyze the portfolio for a specific department?
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A: Set up departments Assign user to departments Assign portfolio analysis to one Department
Q: How do I analyze the portfolio for a specific department?
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