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.
6. 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.
Program
Project 1 Project 2 Project 3 Program 1 Project 4
Project 5 Project 6
Reference: PMI (2008), A Guide to Project Management Body of Knowledge, 4th Edition
7. What is a Project Portfolio ?
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.
7
Portfolio
Portfolio 1 Program 1 Program 2 Project 1
Program 3 Project 2 Project 3 Project 6 Project 7 Project 8
Project 4 Project 5
Project 9 Program 4
Project 10 Project 11 Project 12
Reference: PMI (2008), A Guide to Project Management Body of Knowledge, 4th Edition
8. 8
Portfolio Manager
Common Career Path
Technical – Leadership – Management – Communication
Reference: 2014 CII annual conference – RT 303 implementation session
10. 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.
11. 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
12. Research Methodology
12
Collect
Data
• Survey
• Interviews
• Case Studies
Analyze
Data
• Identify Business Drivers
• Identify Recommended Practices
Develop
Tool
• Portfolio
Management
Playbook
13. 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
14. 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
16. Sample Dashboard
16
$30 m
CURRENT YEAR
$25 m
Planned vs Actual / Reforecast
(Current Year)
BaseLine Forecast #### #### #### ### ### ### ### ### ### ### ### ###
Actual Re-Forecast #### #### #### ### ### ### ### ### ### ### ### ###
Cumulative Base Forecast #### #### #### ### ### ### ### ### ### ### ### ###
$20 m
Cost ($m) Gross
Cumulative Base Re-Forecast #### #### #### ### ### ### ### ### ### ### ### ###
$15 m
Next 12 Months
$10 m
$5 m
Actual Base Forecast
Actual Re-Forecast
Cumulative Base Forecast
Cumulative Base Re-Forecast
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
1 1 1 1 1 2 2 2 2 2 2 2
2 2 2 2 2 2 2 3 3 3 3 3
2 2 2 2 3 3 3 3 3 3 3 3
3 4 4 4 4 4 4 4 4
2 2 2 2 2 2 2 2 2 2 3 3
2 2 2 2 3 3 3 3 3 3 3 4
2 2 2 2 2 2 2 2 2 3 3 3
1
4 4 4
2 2 2 2 2 2 2 2 2 2 2 2
2 2 3 3 3 3 4 4 4 4 4 4
1 1 1 1 1 2 2 2 2 2 2 2
1 1 2 2 2 2 2 2 2 3 3 3
1 1 1 1 2 2 2 2 2 2 2 3
1 1 1 1 1 2 2 2 2 2 2 2
1 1 1 1 1 1 1 1 1 1 1 2
1 1 1 1 1 1 1 1 1 2 2 2
Schedule Performance
HCFC Replacement
Tiger Decommissioning
Baku Cond Lines
Timber Gas Lift
Beachfield Flare
GH Platform Removal
Marine Vapour Management
NE Decommissioning
Sun Decommissioning
Prep for wells (BD50)
NH500 QD Project
Risk Management
Potential High Consequence Risks (D+) (Held by Projects)
ID
1 Incident occurring during Hot Work
D 4
2 Collision: Vessel Operations
D 4
3 West crane removal: Dropped objects
D 3
4 PAU Collision with live plant
D 3
5 Loss of control over live plant
D 4
6 Incident occurring during Hot Work
D 4
7 HLV proximity to platform
C 3
8 Dropped module/collision - HLV lifting operations
D 3
9 D 3
10 D 4
11 D 2
12 C 2
13 D 4
14 D 4
15 C 3
16 D 4
PDRI PDRI 1PDRI 2PDRI 2iPDRI 3
Target 550 450 300 150
Actual 700 625 330 180
Stage 2 11
Legend
Cost Performance (Current Month - Cumulative)
Actual / Re-forecast
No of
Project Stage
Stage 1
Stage 3
Stage 4
7 10%
Planned
No of
Months
Stage 1 Stage 2 Stage 3 Stage 4
Risk Table
Cost ($m)
Planned Actual Variance
Cost Performance (Year End - Cumulative)
Planned Forecast Variance
Severity
Severity
Freq'y
Project
Stage
Freq'y 5 6
Stage 2
F
G
H
Failure 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 Performance
0
D
E
Stage 2
Stage 2
Stage 2
Active
Project Title
Baku Cond Lines
Project Listing
Enhanced Power Upgrade
Insecure HLV anchoring
HLV Loss of Stability: HLV Capsize
Active
$211.4 $217.7 2.98%
A
B
C
Stage 2
Risk
Status
Variation
9 11 16%
Schedule
Index
Stage 4
Stage 2
Stage 2
Stage 2
Stage 2
Leading Indicators
Front End Loading (Stage 2 & Stage 3)
Overall Cycle Time (Stage 2 to Stage 4)
13
-11%
7
17%
1 2 3 4
GH Platform Removal
GH Platform Removal
GH Platform Removal
Prep for wells (BD50)
Sun Decommissioning
Sun Decommissioning
5%
1.15
0.87
8%
-20% 0.80
46
51
20
41
54
19
26 21
Overall Cycle Time (Stage 1 to end Stage 4)
Cost Performance (Current Month)
Cost ($m)
Planned Actual Variance
$19.5 $16.2 -16.92%
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
$147.6 $141.0 -4.47%
Cost ($m)
Jun-14
May-14
Jul-14
Aug-14
Sep-14
Leading Indicators
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
BW Gas Separation
GS Fire & Gas Project
XP900 Accommodations
Quad 205 Polymer Project
DRAMP
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
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
PDRI 1 PDRI 2 PDRI 2i PDRI 3
800
700
600
500
400
300
200
100
0
Actual 700 625 330 180
Target 550 450 300 150
Score
Project Definition Rating Index (PDRI)
4 1 2
5 6
7
8
9
11
3
10
12
13 14 16
15
17. 17
Implementation Report-Final Products
Three documents:
• IR - Implementation Report
• RS - Research Summary
• RR - Research Report
Reference: https://www.construction-institute.org/scriptcontent/index.cfm
18. 18
Dissertation
Project Portfolio Formation
Goals:
• Alignment with organizational goals
• Portfolio Balance (project types, risks, and
markets)
• Maximize the value of portfolio
• Choose the optimal next project
19. 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 ELECTRE
Multiple
Attribute Utility
Theory (MAUT)
Analytical
Hierarchy
Process (AHP)
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. 20
PROMETHEE
Preference Ranking Organization METHod for the
Enrichment of Evaluations
http://www.promethee-gaia.net/software.html
I am Reza Masoumi, PhD candidate of construction management. I am the TA of this course and Prof. Eckelman ask me to give you a presentation on my research because he was planning to go to a trip this week.
I can not jump into this topic without defining project, program, and then portfolio. So first of all, it is required to get familiar with the meaning of project, program, and portfolio, and how management can influence a project portfolio.
Through this presentation, I will talk about the two years research that I was engaged with on managing a portfolio of projects-metrics to measure. This research was supported by the CII (construction industry institute). The organization that connects industries to universities to come up with break through solutions for industry issues.
At the end, the project portfolio formation that I am working on for my dissertation will be talked about. And I will show a demo on multicriteria decision making methods to learn how useful these method could be even for day-to-day hard decision making. The method that I will talk about is PROMETHEE, a European based multicriteria decision making method. And You may know that Analytical Hieararchy process (AHP) is the Amercian based method.
Project based on project management body of knowledge or (PMBOK) is a temporary endeavor undertaken to create a unique product or service. PMBOK is the standard of project management which has been completed over time. It has nine knowledge or management areas which defines generally the processes of different management areas with their inputs and outputs. The processes are general because it is not applicable to define one process for all the organizations due to different organizational structure.
Project based on project management body of knowledge or (PMBOK) is a temporary endeavor undertaken to create a unique product or service. PMBOK is the standard of project management which has been completed over time. It has nine knowledge or management areas which defines generally the processes of different management areas with their inputs and outputs. The processes are general because it is not applicable to define one process for all the organizations due to different organizational structure.
When you hear the word project, what types of projects come up into your mind. Totally based on the Construction Industry Institute or in summary CII definition, there are four various types of business sectors: building, infrastructure, light industry, and heavy industry. Here you see a couple of pictures on different types of projects.
All project have these characteristics: they are temporary-have start and finish time, unique and unrepeatable-even two similar projects consume different resources, restricted with some criteria such as time, cost, quality, and environment; with definitive objectives or goals. The goal can be the capacity, improving the quality, customer satisfaction.
There is always a trade-off among the important factors in a project. If there are three factors, it is shown with a triangle and four factors make a rectangular. Five makes a heptagonal. Six makes a hexagonal.
What is a program? Based on PMI definition in PMBOK glossary, Program is a group of related projects that are managed together to obtain benefits. If these projects are managed individually the benefits can not be obtained. This is the standard for program management by PMI. And the figure shows that program includes projects and other programs.
Project portfolio is a collection of projects and programs which are related or unrelated to each other and are managed together to facilitate effective management of the work to achieve the goals of the organization. It has a standard the same as project and program. The figure shows that a portfolio can include several project, programs, or portfolios.
What is management? Management always wants to consume efficient resources to achieve the goals. The resources is not just money, but human resources, equipment, software, computers, and whatever used in doing the work.
This is the career path for a portfolio manager. Every one should starts from the project engineer position then promote to project manager position according to his/her capabilities in management and communication and finally to portfolio management. A portfolio manager should have all these expertise. Technical, leadership, management, and communication.
My research title was … which was supported by CII.
We were a team of 17 organizations, 9 owners, 8 contractors, in different industry sectors and three universities which our university was the principal on this research and Prof. Touran was the principal investigator of this research.
The research on managing a portfolio of projects followed three goals. Understanding current problems in portfolio management, identifying tools, techniques, and practices which are being used by organizations in portfolio management and introduce these useful practices to other organizations to improve their portfolio management.
To achieve the three goals, team decided about the research methodology which includes three stages, Collect Data, Analyze Data, and Develop Tool. The research methodology was covered in three stage. The first stage is collect data includes an online survey, interviews, and case studies. From the organizations responses to the survey questions, we identified 15 organizations who have advance practices within their organizations. And then, based on the interviews, six organizations were selected for further study and the case studies are developed based on interviews with these organizations. Based on the gathered information, we analyze the data to identify any trends in owner and contract organizations and finally prepared the outcome of the research called portfolio management playbook.
We proposed this four steps process for portfolio performance management. It starts from identifying the KRA, that I will explain in next slide, then selecting appropriate KPIs, collecting data to calculate the KPIs, and eventually evaluate the portfolio performance process. The portfolio performance can be shown graphically in format of a dashboard.
These are the nine important KRAs that stakeholders are usually interested on.
And this slide shown the KPIs or metrics to measure the performance of each of the KRAs.
The metrics or KPIs can be included in a dashboard for visualization. Because managers at the top organizational level usually interested to visually hhavve some interoperations of the their projects portfolios. When we talk about dashboard the first thing that come to mind is the car dashboard. Actually the dashboard for visualizing portfolio performance originated from the car dashboard which includes several indicator in different style to show the performance of the car. Here is an actual example of a portfolio dashboard which includes bar chart, color coded tables, and bubble graphs. Usually dashboards include three color-coded traffic light or dial. Red shows the bad situation, green good, and yellow is somewhere between.
These are the output document of our research. CII researches usually have three various documents including IR or …, RS or …, and RR or … . The cover page of IR and RS are shown here. The RR has not finalized yet and we are working on it.
What I am working on for my dissertation is about project portfolio formation. Portfolio formation follows three goals, …
This the hierarchy of decision making methods. Some of the methods are easy and some complicated. You know about the decision tree under single criterion decision making and maybe linear programming under multiple objective decision making. What I am using in my dissertation is PROMETHEE and AHP. One of the methods is European and the other one is American invested method. I am going to use the PROMETHEE method in an example because it has a software that is available for academic purposes free of charge.
PROMETHEE stands for ….This is the interface of the software.
All the multi-criteria decision making problems include several criteria and alternatives. Having more than two criteria with various ideal values, I mean some the criteria are interested to be maximized and other minimized make the decision making problem hard task. Using the multiple criteria decision making methods helps to optimize the decision making problem.
In this example, we have four types of cars and six criteria that two of them have minimum ideal value and four maximum.
If you enter all the criteria for different alternatives, and give a weight to each criterion that here I considered one for all the criteria which is not close to reality, because in reality different criteria have different weight. Any way, based on these information the rank of the four cars can be identified.
Here is the rank of alternatives. Phi is called net flow value that is the different between phi+ and phi-. phi+ is positive net flow, and phi- is negative net flow. Phi+ shows how well the alternative outrank other alternatives, and phi- shows how the alternatives is outranked by other alternatives. So, the higher the phi+ and the lower the phi- is better.
The output spreadsheet shows the answers that are similar to the software results. Using @Risk with the Ex-PROMETHEE worksheet helps to probabilistically evaluate the rank of alternatives. These are different types of distribution that you have through this course. These can be used for the input variables to calculate the PDF or CDF of the output variables.
I used normal distribution for fuel consumption criterion with mean values given in the table and standard deviation 10% of the values of mean values. The outputs are shown on box-whisker plot. It is obvious that within 25-75 percentile, two of the alternatives can different ranks.