Tools and Techniques of Project and Portfolio Management with Resource Constraints

Description:

Project and Portfolio planning and management shall consider all existing constraints that may include:

  • Renewable resource constraints,
  • Material and Equipment supply constraints,
  • Funding constraints,
  • Calendar Constraints,
  • Imposed Dates (like Start No Earlier Than).

Missing these constraints may lead to unrealistic schedules, wrong budgets, project portfolios that include wrong projects and will not meet their targets. Besides, it is necessary to consider uncertainty and risks. Any decision that does not take risks into consideration is not reliable.

Project Portfolio is not just the sum of portfolio projects. Only creating project portfolio model and estimating alternatives using this model we can optimize Portfolio project selection. It is always profitable to minimize resource multitasking applying project priorities when calculating portfolio resource constrained schedule.

Project priorities that maximize portfolio value are not easy to set. Projects that look most attractive may have resource requirements profile that conflict with requirements of other portfolio projects. It may lead to delays and less added value than adding projects less attractive individually but with “right” resource requirements.

Portfolio targets shall be set taking into account existing risks and uncertainty basing on reasonable probability to be achieved.

These targets do not belong to any portfolio schedule and so project and portfolio performance measurement baselines in usual sense do not exist. Instead of the traditional baseline we get a set of portfolio, project and subproject targets. Project Performance Analysis shall show if these targets will be achieved.

Traditional methods of performance analysis like Variance analysis and Earned Value analysis do not supply us with reliable information on the chances to achieve set targets.

Earned Value analysis compares project and portfolio past performance with the baseline but does not consider changes in future resources, expenses and income. Besides, when the targets are set taking into account uncertainty and risks, project and portfolio baseline schedules do not exist and comparing execution with some schedule makes result interpretation complicated. Project and Portfolio management decisions shall be based on trend analysis that shows if there are current problems with project and portfolio execution.

Timely corrective actions prevent negative tendencies development.

The best performance analysis is based on success probability trends that show what happens with probabilities to achieve project and portfolio targets.

This analysis looks to the future and supplies management with the integrated information on project and portfolio “health”.

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