PM 2 Vorlesung 6 Teil 2

Sustainable project portfolio success

Monitoring of the project portfolio

Identification of short, medium and long-term portfolio opportunities

Analyze resource commitment

Update future resource requirements

Early warning for rapid problem identification and resolution

Development of corrective actions in case of deviations

Cross-departmental project coordination

Identification of synergies between projects

Data request

-> Portfolio analysis

-> Result provision & action

The type of available data closely relates to the frequency of data requests.

Metadata

• Personnel capacity

• Overall project budget

Project data (by project manager)

• Costs

• Resources

• Dates/Progress

• Risk

Further data

• Project proposals

• Change Requests

• Business Cases

Result controlling

Cost controlling

Resource controlling

Date / progress controlling

Quality controlling

Turnover

Offered persondays (PD)

Delegated PD

Invoiced PD

Paid PD

Contribution margin (CM)

Net present value

Total project costs

Personnel costs

Costs of materials

External costs

Internal personnel expenses in PD

External personnel expenses in PD

Capacity utilization

Start

End

Duration

Changes

Dangers

Action measures

Milestone trend analysis

Cost trend analysis

Earned Value Analysis (EVA)

Network plan

Networked Gantt chart

Project map

Planned vs. actual results

Comparison of total quotation order and total order

Variance of planned costs or actual costs

Comparison of the variance of planned costs in % with the variance of the total order

Deviation of actual personnel expenditures & planned expenditure in PD

Comparison of the deviation of the planned personnel expenses in PD in % with the deviation of the total expenses

Degree of progress or fulfilment of milestones

Past due dates of planned dates

Deviation of the planned duration

Course of traffic light phases

Course of status reports

A milestone trend analysis compares different plan values (not plan vs actual values!) over the course of a project

The Earned Value Analysis (EVA) compares planned costs, actual costs, and planned costs of actual work on a key date.

(BCWS – Budgeted Cost of Work Scheduled)

How high are the costs for the planned work likely to be?

(ACWP – Actual Cost of Work Performed)

What are the actual costs of the work provided?

Planned costs of actual work

(BCWP – Budgeted Cost of Work Performed)

What are the costs which according to the original planning would have been necessary to reach the stage of physical completion attained on the status date?

EVA differentiates performance and cost variances, while merely comparing actual and planned costs cannot!

They allow comparing projects of different sizes

Cumulated actual costs (ACWP: actual costs of work performed)

Cumulated earned value (BCWP: budgeted costs of work performed)

Cumulated planned costs (BCWS: budgeted costs of work scheduled)

Actual costs per work unit * actual activity

Planned costs per work unit * actual activity

Planned costs per work unit * planned activity

Schedule variance (SV) absolute

Cost variance (CV) absolute

Earned value – planned costs

Earned value – actual costs

Schedule Performance Index (SPI)

Cost Performance Index (CPI)

Cost Schedule Performance Index (CSI)

Earned value / planned costs (<1: less work done than planned)

Earned value / actual cost (<1: more costs incurred than planned)

SPI * CPI (< 1: over budget schedule combination)

Establish transparency about the current project portfolio

Aggregate the status information from the status reports of individual projects

Analyze the project portfolio with regard to dependencies, budget and personnel capacity requirements as well as the average level of progress

Decide to either continue, pause, or terminate projects based on the project status reports

Expenses, Costs, Deadlines: Plan/Actual & Plan/Plan comparisons

Quality: Quality reports

Phase activities: Status reports

Resources: Utilization reports

Performance: Progress reports

Monitoring results can be provided in a management report

Summarization of individual status reports to a clear overall report

All projects and information at a glance, in the sense of a management report

Reduce/increase the program/project budget

Budget overrun of projects or programs

Downgrade/ upgrade projects’ priority

Terminate programs/ projects that no longer fit to the current strategy

(Re)plan the portfolio in a rolling manner

Change resource allocation

Adjust project objectives

Change the evaluation criteria in the prioritisation model

Intensive and regular review of the entire portfolio

Review of the strategic premises and validity of the strategic alignment of the portfolio

Existence of business cases, monitoring of business cases, and tracking of business cases after project completion

Adaptability of the portfolio to changed conditions

Identification of emergent elements, new investment opportunities, white spots etc. through portfolio analyses

Ability to work agile and use agile and traditional methods in parallel

Visualizations are useful in enabling teams of decision-makers to understand and discuss diverse types of information in order to make portfolio decisions.

The benefits increase when decision-makers are more familiar with visualizations.

Visualizations can decrease (buffer) the negative effect of heuristic decision making.

But visualizations can also mislead -> visuals may bias decisions by focusing attention on a limited set of alternatives.

The study lends strong support to the proposition visualizations in a portfolio decision-making process improve decision-making success and portfolio success.

Being able to terminate inferior projects increases strategic fit, which can be supported by moderate levels of top management involvement.

Top management involvement increases termination quality, but only to a certain point – too much top management involvement can be deterimental.