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10-1 Chapter 10 Balancing Portfolios © David O’Sullivan.

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Presentation on theme: "10-1 Chapter 10 Balancing Portfolios © David O’Sullivan."— Presentation transcript:

1 10-1 Chapter 10 Balancing Portfolios © David O’Sullivan

2 10-2 Reflections  Explain new product development.  What are the main sources of funding for new product development?  List the ways in which new product innovations can be protected.  What are the key features of a market launch plan?  What is the commercialization of new products?  What are the main traits of an entrepreneur?

3 10-3 Activities [Discussion of selected student ‘Activities’ from previous chapter]

4 10-4 Learning Targets  Explain the main ideas behind project portfolio management  Describe four key strategies used in portfolio management  Name a number of tools that can be used for portfolio management  Explain the use of bubble diagrams as a means of evaluating portfolios  Understand the difference between the portfolio dominant and project dominant approaches  Discuss why organizations often have a mix of low- risk and high-risk projects

5 10-5 Portfolio Approaches  Portfolio management is about continuously choosing, managing, and adapting the mix of projects to match resource availability and contribute to organizational goals  Key approaches include: Maximizing the value of a portfolio Creating the right mix of projects Maximizing alignment with goals Optimizing resources

6 Portfolio and Project Management Portfolio Management Project Management Team s Individual s Teams Skills Learning Review Goals Statements Requirement s Strategies Measures Results Status Scorecard Trends Innovatio ns Stimuli Creations Problems Ideas Projects Specification Ranking Schedules Deployment

7 10-7 Maximising Value

8 10-8 Creating the Right Mix

9 10-9 Right Mix > Quadrants  Pearls - Low risk and high reward projects.  Oysters Risky projects with potential of high reward  Bread and Butter Often small, simple projects – high likelihood of success, but low reward.  White Elephants Low probability and low reward projects. One third of all projects and about 25% of spending are White Elephant.

10 10-10 Right Mix > Types of Bubble Diagrams  Risk Vs. Reward  Technical Newness Vs. Market Newness  Ease Vs. Attractiveness  Strength Vs. Attractiveness  Cost Vs. Timing  Strategy Vs. Benefit  Cost Vs. Benefit  Etc. etc.

11 10-11 Right Mix > Examples Risk Reward High Low Uncertainties

12 Risk-Reward 10-12

13 10-13

14 10-14 Scope Matrix

15 10-15 Maximizing Alignment With Goals

16 10-16 Optimizing Resources  Optimizing resources is the process of balancing the  Funding  Worker hours  Skill requirements of the project portfolio with the resources available over a period of time

17 10-17 Portfolio Resource Loading

18 10-18 Portfolio Budgeting  Budgeting is an important mechanism for controlling and reviewing the progress of an innovation plan  Allocated budget will determine the overall investment in terms of resources and commitment  Common budgeting methods Top-down budgeting Bottom-up budgeting

19 10-19 Balancing the Portfolio  Maximizing contribution based solely on financial methods can lead to short-term, low-risk projects.  A solely strategically aligned portfolio, may not yield any short-term benefits necessary to maintain momentum.  Too rigid pursuit of the screening process can result in behavior such as: Abandoning the more radical of proposed innovations Focusing too heavily on a particular technology Concentrating too much on existing markets

20 10-20 Dominant Assessment Approaches  Gates dominant Focus on reviewing each stage gate within the individual projects in the portfolio Suitable where portfolios are static  Portfolio dominant Favors a portfolio view over an in-depth review of individual projects Suitable in fast, dynamic organizations where projects are changing regularly and where the business environment is fluid

21 10-21 Classification of Projects

22 10-22 Summary  Explain the main ideas behind project portfolio management  Describe four key strategies used in portfolio management  Name a number of tools that can be used for portfolio management  Explain the use of bubble diagrams as a means of evaluating portfolios  Understand the difference between the portfolio dominant and project dominant approaches  Discuss why organizations often have a mix of low- risk and high-risk projects

23 10-23 Activities

24 10-24 Search Online       ty_Techniques ty_Techniques 


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