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Portfolio Vs Project Planners

6 replies [Last post]
Alex Wong
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Joined: 12 Feb 2003
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Dear Planners

Please comment on - in terms of:
Function
Skill
Tool
Objective
etc...

Alex

Replies

If resources, financing, supplies are limited then separate project planning will not be correct - you shall take into consideration resource requirements of other projects in portfolio. Project schedules shall be coordinated on portfolio level. Portfolio cash flow shall be not only planned but also managed during execution.
Portfolio is like very large project consisting of phases that are managed by different teams. And its scope is constantly changing (new projects are added, some projects terminated). It is impossible to manage separate phases as stand-alone projects if there are links between phases (projects), common resources and limited finances. So portfolio shall be managed not only on pre-investment phase.
Vladimir
Raj Maurya
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Joined: 17 Jul 2004
Posts: 132
Portfolio management & planning is something to look in next 5 to 10 year window and think about the target and commitment then plan accordingly to meet the future requirement. Identify the projects, go through supply chain management workshop find out the best way to go forward (strategy) by optimising cash flow and cash return with optimised resources. Yes it is all pre-investment phase.

Being a good Portfolio Planner I think one should have a good experience in project execution planning.
Alex Wong
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Joined: 12 Feb 2003
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Dear All,

Yes portfolio management (planners) do requires a lot with $, Resource, risk, outcome, goal management. In addition to the above mention tasks, portfolio planner is more focus on the earlier stage of whole project business which is Project identification, project categorization, project evaluation, project selection, prioritisation and authorisation.

A project planner is more focus on planning activity during the execution of the project. Design, Procure, Deliver, Install, Test, Commissioning.

Planners - please give your view on the above.

Regards

Alex
Stephen,
we are in agreement as usual. I am afraid that some misunderstanding is caused by my English.
When I mentioned Cash Flow management I suppose that I meant what you call investment/profit management.
The task - to optimize resource and financing distribution between projects and tasks to achive maximal NPV.
This task can be solved using Spider Project but other software does not simulate project financing (investments) and profits. I mean calculating project schedule taking into consideration all schedule constraints including resources, financing, supplies and project priorities that may be based on political and other informal considerations. Spider Project can simulate portfolio cash flow (expenses along with profits) and adjust portfolio schedule to avoid negative values of cash flow at any moment in time (with discounting if necessary).
If risks are simulated then portfolio management task - to maximize probability of meeting NPV targets considering all constraints? uncertainties and potential risk events.
Is it close to what you call investment/profit management?

I agree with the problems of other tools but still they are used for portfolio management. But you are right - they will not calculate project schedule using dynamic financial and supply restricitions. Static restrictions can be simulated in Open Plan.

Vladimir
Stephen Devaux
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Joined: 23 Mar 2005
Posts: 655
Vladimir,

We are usually in complete agreement. But on portfolio management, I disagree with a few of your points.

"Alex, on portfolio level you deal with project financing, project priorities, resources and supplies common to many projects, etc. Most of all it is about cash flow management."

Most of all, portfolio management SHOULD be about investment/profit management. All the issues you pointed out are relevant to this, but I’d suggest the most important is portfolio profitability based on (1) multiproject resource targeting (2) resource bottleneck identification and resolution, and (3) expected monetary value tracking and delay costs/acceleration premiums.

"Tools are the same - P3e, Open Plan, Spider Project, Artemis 7."

I can’t speak for Spider Project (which from our previous discussions sounds like an excellent tool); but the others, as currently designed, are inadequate in terms of portfolio profit optimization. (Whether or not the user defined fields in any of them could be conformed to provide project and portfolio profits and DIPP information, I’m not sure.)
Alex,
on portfolio level you deal with project financing, project priorities, resources and supplies common to many projects, etc.
Most of all it is about cash flow management.
Tools are the same - P3e, Open Plan, Spider Project, Artemis 7.
Objective - optimimal use of limited resources and money. Besides, on perfolio level you can see the big picture - the current status of all projects in the organization, actual and planned cash flows, resource usage by projects, etc.
Portfolio management is especially interesting when profits received in some projects is used for financing of other projects.
Vladimir