1. MIS5102: Process Improvement and Innovation Project Portfolio Management

2. What is Project Portfolio Management (PPM)? Five Questions (Pennypacker and Retna ) Are we investing in the right things? Are we optimizing our capacity? How well are we executing? Can we absorb all the changes? Are we realizing the promised benefits? Are we talking about “singular” or “comparative” evaluations? What’s the difference?

3. Two broad approaches Quantitative Qualitative There are pros and cons of each approach…

4. Quantifying Options Using a Decision Tree http://en.wikipedia.org/wiki/Project_portfolio_management Each project has an associated Cost Revenue Risk

5. Project Investment #1 -$3,500,000 Project Revenues $4,275,000 Opt. 50% $4,750,000 50% $1,250,000 Pess. 50% $3,800,000 50% $300,000 Project Investment #2 -$2,800,000 Project Revenues $3,250,000 Opt. 50% $3,900,000 0% $1,100,000 Pess. 50% $2,600,000 0% -$200,000 A Closer Look TRUE FALSE = $4,750,000 *.5 + $3,800,000 *.5 = -$3,500,000 + $4,750,000 = -$3,500,000 + $3,800,000 = -$2,800,000 + $3,900,000 = -$2,800,000 + $2,600,000 Expected value of this part of the project portfolio: $1,250,000 *.5 + $300,000 *.5 + $1,100,000 *.0 + -$200,000 *.0 = $775,000 What are the pitfalls of this approach? = $3,900,000 *.5 + $2,600,000 *.5

6. A more qualitative approach Decision Points for PPM (Wikipedia) The criteria for filtering and ranking Which criteria are most important Which project ideas are worth developing Which projects should be considered as part of the portfolio Which projects to fund http://en.wikipedia.org/wiki/Project_portfolio_management But how do you prioritize?

7. politics Who Gets What? When? Where? Why? How?

8. Portfolio Categories Innovation New Business Models or Competitive Capability Discretionary Growth Increase Revenue Increase Intimacy Efficiency Cost-Out Productivity Run the Engine Sustain Operations Run TheEngine

9. Some of the Big Questions How can you blend quantitative and qualitative approaches? Should you? How can a “do nothing” option help? Why are lists important? When doesn’t any of this matter?