Project Portfolio Management And Evaluation For Business Objectives

Situational Context

Project management portfolio is a centralized process of managing the project of the organization. It often includes highly leveled control and monitoring of the projects to make sure that the ongoing projects relates directly to the general goals and strategies of the business (Young & Conboy, 2013). Project management portfolio can also be said to be a centralized management of methods, processes, and technologies utilized by the project management offices. Project management portfolio collectively manages the current projects based on their many key characteristics.

Project management also utilizes the project management portfolio in analyzing the possible return of undertaking a project. It gives the organization and the managers the ability of seeing a larger picture. Project management portfolio focuses on the right delivery of the project.

The main objective of the project management portfolio is to find the maximum mix of resource for the delivery and to schedule the activities to achieve operational and financial goals of the organization.

This study will provide a detailed explanation on how project management portfolio is relevant for the Lion organization in gaining an improved competitive advantage as well as a well-established customer base.

• Is the Lion organization investing in the right project?

  The investment on non-alcoholic beverage production will help improve the overall operations of the business. The detailed analysis of the organization shows that it majors its production on producing wines, beers, ciders, and several dairy products. The lion organization investment in these productions is not right unless it considers the production of non- alcoholic beverage drinks. The organization should also place more efforts in improving the quality of its products and services. Doing this will help to improve the competitive advantage of the business.

• Optimization of the production capacity by Lion organization

Optimization of the production capacity by Lion organization requires more than the demand of unlimited growth. The lion organization will need to optimize the control of its production in order to ensure that they meet the demand at the minimum cost.

Lion organization should also determine the available production capacity for the non-alcoholic beverages. The organization should ensure that it executes this project effectively with the use of the appropriate management tools. Optimization of production capacity for the Lion organization will help increase its competitive advantage.

• How good is Lion organization in the execution of its projects?

The Lion organization is known for executing its projects using the best project management tools. The organization should however reconsider its decision making process and the risk assessment procedures. The organization should ensure that it gains enough knowledge regarding the risk that might affect the investment in the non-alcoholic beverage drinks.

Portfolio Evaluation

In order to properly execute the project of non- alcoholic beverage drinks, Lion organization should follow the project portfolio management process. The organization should first create an inventory and establish a strategy. The company should then analyze the existing strengths and weakness of the project portfolio. The organization should then ensure that the project aligns with the policies of the organization.

• Can organization absorb all the changes?

Lion organization will be able absorb all the changes because it has a good change management policy. One of the ways in which the Lion organisation manages its changes is by making a clear definition of change and aligning it to the goals of the business. It also manages change by developing communication strategy, providing effective training, implementation of the support structure as well as provide good measurement of change. All these will help the Lion organization to be able to absorb change.

• Is the organization realizing the promised benefits?

Implementation of the project portfolio management will help the organization in realizing the promised benefits of investing in non-alcoholic beverages. The reason for this is that Project Portfolio management will help in accounting for the anticipated success and risk of the project (Jonas, 2010).

Lion organization has realized several benefits due to the implementation of the project portfolio management. One of this benefits is the improved process of selection. The organization was able to choose to invest in the non-alcoholic beverage production because it rhymes with the goals of the business, resource availability, and risk.

• What is the method used by Lion organization in evaluating its overall project portfolio?

Lion organization utilizes the Net present Value in the evaluation of its project. The net present value refers to the difference between the current value of cash and the future value of cash. Lion organization will use the Net Present Value to determine whether the expected financial gains    of investing in non- alcoholic beverage drinks will outweigh the present day investment. The organization will, therefore, determine whether it is viable to invest in the non-alcoholic beverages or not.

If the calculations is done and a positive NPV obtained then the project will be given a green light to continue, the vice versa is true for a negative NPV. The organization will calculate the present value of its investment, in the present of the investment in five years, and then find the difference.

The company will invest a total of $ 157 and find its present value in a period of five years using a projected discount rate of 15%.

The formula of calculating the NPV = TVECF-TVIC

Portfolio Management

Whereby;

TVECF= Today’s value of the expected cash flows

TVIC= Todays value of the invested cash

• What is the justification of using the chosen method in comparison to other method that are available?

Lion organization utilizes the Net present Value over other methods because it will be able to know whether the values of all the cash flows generated by investing in non-alcoholic will exceed the cost of starting the investment. NPV provides an insight of whether the project will have a positive or a negative outlook, and whether the organization should proceed with the investment or not.

Lion organization preference for using the Net Present Value is also due to the fact that it accepts all the conventional cash flow pattern. An example of conventional cash flow is shown in the table below;

The Net Present Value method is therefore, not affected by the conventional cash flows.

• Are there any challenges that the organization might face in using the current method if it were to operate in a global environment?

Lion organization will face several challenges due the use of the Net Present Value method. One of such challenge is that; it will be hard to estimate the opportunity cost of investing in the non-alcoholic beverages. The opportunity cost is especially considered in the initial outlay.

   Use of the NPV method might also lead to the ignorance of the sunk costs such as research and development. The sunks cost might be huge and if ignored, the corporate finance team will find it hard to fix it in future.  Another challenge posed to the Lion organization due to the use of NPV is that the method makes it hard to determine the required rate of return.

• Is the benefits management lifecycle incorporated in the evaluation process?

The benefits management life cycle was incorporated in the process of evaluation in order to ensure that investing in non –alcoholic beverage drinks would provide benefits to the organization.  Benefit management lifecycle will also ensure that the tasks are well defined among the employees. It provides data on how investing in non-alcoholic beverage drinks would be beneficial to the organization.

The incorporation of the benefit management lifecycle in the evaluation process by Lion organization is shown in the diagram below;

• How might benefits management be helpful in successfully meeting the deliverable goals of the organization’s projects?

Benefit management is an approach that is structured to optimise the benefits of the outcome of the business for an organization due to change. It is a beneficial process as it involves identification, measurement, and tracking of benefits from the beginning of the project investment until the last projected benefits are realized.

Benefit management will therefore, help Lion organization to meet the deliverable goals by ensuring that the desired benefits are measurable, agreed, time-bounded, and realistic.

· How is management of project portfolio ensuring that the organization’s collective projects are aligning with its strategic objectives?

Maturity Levels

Portfolio management in the case of Lion organisation ensures alignment of the strategic objectives with organisation collective project by ensuring presentation of investment plan. Portfolio management presents the investment plan to the organisation based on its ability to undertake risks, income, and budget.Portfolio management also ensures that the collective projects of the organization aligns with its strategic objective by minimizing the risks and increasing the chances of making profits. 

• Has a Project Management Office been introduced into the organization and, if so, has it played a role in terms of standardizing practices and increasing project success rates? If not, why not? What alternative approaches are available?

The Project Management Office has been introduced in the Lion organization. PMO plays a major role in terms of standardizing practices and increasing the success of the project of producing non- alcoholic beverages. Project management office does this by producing information to be reviewed by the management. The PMO in Lion organisation play a major role in tracking the overall status of the project. Another important role played by PMO in standardizing practices and increasing project success is supporting the project. PMO helps in providing the necessary support through guiding the managers of the project.

• What quantitative and qualitative tools and techniques is the organization currently using to manage its project portfolio and are they effective?

The Lion organization is currently utilizing the market research, market risk assessment and demand forecasting tools and techniques. The technique of market research has been effective in reaching out for a larger audience. Performing market risk assessment is important as it forms an important part of safety management plan. The technique of demand forecasting reduces the risks that are related activities of the business and aids in making efficient decisions. Lion organization has a good forecasting that helps a firm to plan better for business related goals. 

• At what maturity level do you believe the organization is at in terms of its approach to management of project portfolio?

A portfolio maturity model is a tool that is used in assessing the sophistication level in people, tools, and the processes involved in the management of the project portfolio. Maturity level represents the level of sophistication within the processes of managing portfolio (????????, & Malinina, 2013)    .

Lion organization is at optimized level of maturity. The optimized level of maturity in the Lion organisation is seen through organisational rigor, discipline and the use of optimization techniques.

• What are the key best practices which can be adopted to improve the maturity level and which model (e.g. PRINCE2, OPM3) do you think would be appropriate?

The best practises that can be adopted to improve the level of maturity include; use of control methods in managing process metrics, obtaining a continuous’ customers feedback, and the OPM3 model.  The standards of OPM3 model consists of three major elements which are; knowledge, assessment, and improvement.

• How might you go about implementing this change and what assistance from the organization would you require?

In order to implement these change in Lion organisation, all individual must be involved. The assistance required from the organisation will be in terms of financial support.

• Assess the corporate culture of the organization and whether it is likely to be different in terms of key internal stakeholder influence and input (e.g. HR Director, Technology Manager, Facilities Manager, Accountant).

The corporate culture of Lion organization is founded on five core values; sociability, passion, wellbeing, achieving together, and integrity. These five values forms the basis of decision making. The corporate culture of Lion organization focuses strongly on leadership and engagement. It motivates a common sense of purpose, encourages high level of ownership and positive attitude towards change.

The corporate culture of Lion organization is different in terms of key internal stakeholders as it encourages team work and participation by all the stakeholders.

The corporate culture of Lion organization can be illustrated using the diagram below;

• Will any change management initiative in terms of management of project portfolio process improvement and benefits realization need to take into account the different perspectives of these stakeholders and what concerns might each stakeholder express?

Change management should take into account different perspectives of the stakeholders, since it involves a transition from the current state to the future state. Most of the stakeholders are usually interested in knowing the return on investment. Change management portfolio has a general impact of achieving desired outcome level.

• What aspects of the corporate culture do you think would support management of project portfolio and its sustainability criteria?

The major aspects of the corporate culture in Lion organisation include the shared employee experience, shared missions and vision, and the shared employees experience .These aspects will support the management of the project portfolio and its sustainability criteria through processes, style of management, management of time, and training.

• Are there any challenges involved in getting management of project portfolio and its sustainability criteria embraced by the organization?

                 The major challenges experienced by the Lion organisation in getting project portfolio  and its sustainability criteria embraced include; lack of appropriate sponsorship, managing the maturity level, and lack of commitment by the management.

Conclusion 

Project management portfolio is a centralized process of managing the project of the organization. The main objective of the project management portfolio is to find the maximum mix of resource for the delivery and to schedule the activities in order to achieve operational and financial goals of the organization.

References

Hadjinicolaou, N., & Dumrak, J. (2017). Investigating Association of Benefits and Barriers in Project Portfolio Management to Project Success. Procedia Engineering, 182, 274-281. https://doi.org/10.1016/j.proeng.2017.03.191 

Jonas, D. (2010). Empowering project portfolio managers: How management involvement impacts project portfolio management performance. International Journal Of Project Management, 28(8), 818-831. https://doi.org/10.1016/j.ijproman.2010.07.002

Young, M., & Conboy, K. (2013). Contemporary project portfolio management: Reflections on the development of an Australian Competency Standard for Project Portfolio Management. International Journal Of Project Management, 31(8), 1089-1100. https://doi.org/10.1016/j.ijproman.2013.03.005

????????, & Malinina, M. (2013). MATURITY MODELS FOR AGILE PROJECT MANAGEMENT. Russian Journal Of Project Management, 2(2), 30-39. https://doi.org/10.12737/504

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