Portfolio Management Concepts
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Questions and Answers

Which portfolio selection method incorporates both project ranking and comparative analysis?

  • Ad hoc approaches
  • Scoring models
  • Mathematical models
  • Comparative approaches, ranking (correct)

    • What is a primary driver for the portfolio management process within an organization?

  • Technological innovation
  • Budget constraints
  • Market competition
  • Business strategy (correct)

    • Which method is NOT typically used for evaluating portfolios?

  • Clustering analysis (correct)
  • 2x2 matrices
  • Bubble diagrams
  • Scoring models

    • What does the size of the bubble represent in bubble diagram evaluations?

    <p>Annual resources</p> Signup and view all the answers

    Which approach is characterized by informal selection criteria, often influenced by individual preference?

    <p>Ad hoc approaches</p> Signup and view all the answers

    What is the typical frequency of the portfolio review process?

    <p>Bi-annually</p> Signup and view all the answers

    The Stage Gate process in project management is primarily used for what purpose?

    <p>Decision-making on project continuation</p> Signup and view all the answers

    Which portfolio management aspect involves maintaining oversight and tracking of projects?

    <p>Monitoring and control</p> Signup and view all the answers

    Which of the following is NOT a key characteristic of a project?

    <p>Continuous</p> Signup and view all the answers

    What is the primary focus of the project funnel?

    <p>Generating more ideas than will be applied.</p> Signup and view all the answers

    What defines the 'temporary' nature of a project?

    <p>It has a beginning and an end.</p> Signup and view all the answers

    Which of the following is NOT a criterion for portfolio decisions?

    <p>Market share pre-saturation</p> Signup and view all the answers

    Which scenario represents a project?

    <p>Reorganizing a department.</p> Signup and view all the answers

    Which of the following factors indicates project complexity?

    <p>Involvement of multiple actors with varying interests.</p> Signup and view all the answers

    What role does the portfolio analyst play in portfolio management?

    <p>Provides strategic overviews of the portfolio.</p> Signup and view all the answers

    Success metrics in projects often focus on which aspect?

    <p>Alignment with predefined boundaries of schedule, cost, and quality.</p> Signup and view all the answers

    Which statement best represents the human aspects of portfolio management?

    <p>Politics and subjectivity can complicate the process.</p> Signup and view all the answers

    What is the primary purpose of the tower-building project outlined?

    <p>To deliver the tallest tower capable of carrying a cup.</p> Signup and view all the answers

    What is a primary benefit measured in project portfolio management?

    <p>Net Present Value (NPV)</p> Signup and view all the answers

    Why might projects in technologically complex areas become ambiguous?

    <p>Because changing technologies often introduce uncertainty.</p> Signup and view all the answers

    What is implied by assessing the durability of competitive advantage?

    <p>Identifying long-term project sustainability.</p> Signup and view all the answers

    What stage involves selecting which projects to fund in the project management process?

    <p>Selection</p> Signup and view all the answers

    What kind of feedback is usually associated with projects?

    <p>Long-term feedback.</p> Signup and view all the answers

    Which term best describes the types of technologies evaluated in portfolio management?

    <p>Base, key, pacing, and embryonic technologies</p> Signup and view all the answers

    Which of the following characteristics is NOT associated with a project?

    <p>Ongoing</p> Signup and view all the answers

    All projects must be completed within one year.

    <p>False</p> Signup and view all the answers

    What are the three key characteristics of a project?

    <p>Unique, Temporary, Focused</p> Signup and view all the answers

    A project typically has a defined ________ and is characterized by a sense of urgency.

    <p>deadline</p> Signup and view all the answers

    Match the following project types with their classifications:

    <p>Building a bridge = Yes Moving house = Yes Flight from Amsterdam to Paris = No Emergency evacuation of a chemical plant = Yes</p> Signup and view all the answers

    In the project life cycle, which phase requires a group of people?

    <p>Execution</p> Signup and view all the answers

    Projects are always designed to produce a product or service.

    <p>True</p> Signup and view all the answers

    What is the primary purpose of the tower-building project outlined?

    <p>To design and build the highest tower using limited materials</p> Signup and view all the answers

    What is one key reason for disappointing project performance related to stakeholders?

    <p>Stakeholders' involvement</p> Signup and view all the answers

    Stakeholders do not significantly influence the outcome of a project.

    <p>False</p> Signup and view all the answers

    Identify one key success criterion for the Notre-Dame Cathedral Restoration project.

    <p>Preservation of historical integrity</p> Signup and view all the answers

    In project management, M&E stands for ______.

    <p>Monitoring and Evaluation</p> Signup and view all the answers

    Match the following categories to their corresponding stakeholders in the Notre-Dame Cathedral Restoration project:

    <p>Government Entities = National Heritage Commission Local Community = Residents of Paris NGOs = Historic Preservation Society Funding Bodies = Donors and Sponsors Project Team = Architects and Engineers</p> Signup and view all the answers

    What is the main purpose of teamwork in project management?

    <p>To solve multidisciplinary problems</p> Signup and view all the answers

    Team empowerment involves allowing team members to adjust their tasks.

    <p>True</p> Signup and view all the answers

    What defines a team in contrast to a group?

    <p>A team works collaboratively towards a joint goal, while a group is just a collection of individuals.</p> Signup and view all the answers

    The effect of cooperation that enhances performance among team members is known as the ______ effect.

    <p>performance</p> Signup and view all the answers

    Match the following team aspects with their definitions:

    <p>Synergistic solutions = 1+1=3 Participative management = Setting goals, not methods Feedback = Performance evaluation Accountability = Responsibility for outcomes</p> Signup and view all the answers

    Which of the following is NOT a basic drive for teamwork?

    <p>Competition between team members</p> Signup and view all the answers

    Project managers should micromanage their team to ensure timely delivery.

    <p>False</p> Signup and view all the answers

    What is one of the key roles of a project manager in relation to a team?

    <p>To manage the process and facilitate decision making.</p> Signup and view all the answers

    What is the primary aim of portfolio management?

    <p>Achieving strategic business objectives</p> Signup and view all the answers

    A project portfolio includes only ongoing projects of a company.

    <p>False</p> Signup and view all the answers

    What are two key characteristics of a project portfolio?

    <p>It includes all projects executed by a company and is aligned with strategic objectives.</p> Signup and view all the answers

    The process of prioritizing potential projects in portfolio management helps to limit ongoing projects to a manageable level and identifies __________ efforts.

    <p>risk-intensive</p> Signup and view all the answers

    Match the following project portfolio management components with their descriptions:

    <p>Portfolio management = Decision-making about resource allocation Strategic objectives = Establish goals for project selection Risk identification = Recognizing efforts that may pose high uncertainty Project prioritization = Ranking projects based on importance</p> Signup and view all the answers

    Which of the following questions are part of the key questions in Project Portfolio Management (PPM)?

    <p>How well are we executing?</p> Signup and view all the answers

    One of the goals of project portfolio management is to support multiple goals within an organization.

    <p>True</p> Signup and view all the answers

    Name one reason why it is important to manage project portfolios.

    <p>It helps identify projects that meet strategic needs.</p> Signup and view all the answers

    What are the three crucial aspects of portfolio management?

    <p>Strategic fit, Value added, Portfolio risks</p> Signup and view all the answers

    Stakeholders are only those who are involved in the project execution.

    <p>False</p> Signup and view all the answers

    Identify one characteristic that differentiates stakeholders from shareholders.

    <p>Stakeholders have an interest in or are affected by the project, while shareholders own a share in the company.</p> Signup and view all the answers

    Portfolio management is a highly _______ process due to numerous interactions with various layers of an organization.

    <p>complex</p> Signup and view all the answers

    What is the power-interest grid used for?

    <p>To categorize stakeholders based on their influence and interest</p> Signup and view all the answers

    What should be considered when managing stakeholders?

    <p>Their power, interest, and support levels.</p> Signup and view all the answers

    All stakeholders have a positive attitude towards the project.

    <p>False</p> Signup and view all the answers

    Match the following portfolio management aspects with their descriptions:

    <p>Strategic fit = How well a project aligns with organizational goals Value added = The additional benefits a project brings to the organization Portfolio risks = Potential challenges and uncertainties in project execution Stakeholder engagement = Involving those who can influence project outcomes</p> Signup and view all the answers

    Study Notes

    Portfolio Management

    • Portfolio management is the process of identifying and selecting projects to be funded
    • The process generates more ideas than can be applied
    • Projects are selected at stage gates
    • Selection criteria include:
      • Fit with business strategy (qualitative: low, medium, high)
      • Benefits (NPV, ROI, IRR, payback, etc)
      • Durability of competitive advantage (short, medium, long-term)
      • Competitive impact on technologies (base, key, pacing and embryonic technologies)
      • Time to completion
      • Investments (R&D costs, marketing, operational costs, etc.)
      • Market or market type (old or new market)
      • Project type (new products or enhancements, fundamental research, etc)
      • Risk profile
    • Key personnel in portfolio management include:
      • Portfolio Sponsor - the senior manager responsible for the portfolio (representing the highest layers of an organisation)
      • Portfolio manager - person responsible for the organisation of the portfolio management (not for the decisions)
      • Portfolio analyst - provides the strategic overviews of the portfolio
    • Portfolio selection methods include:
      • Ad hoc approaches
      • Operational necessity
      • Comparative approaches, ranking
      • Scoring models
      • Portfolio matrices and bubble diagrams
      • Mathematical models like optimization, Monte Carlo and real option models
    • Portfolio management process should include both prioritizing and monitoring and control aspects
      • Maintain a list of all current projects in a project database
      • Prioritise and select projects through a transparent system maintained centrally
      • Plan and assign resources on all projects centrally
      • Report the status of all projects

    Project Management

    • A Project is a unique, temporary, and focused endeavor.
    • It has a beginning and an end, and requires a group of people with a shared sense of urgency.
    • It delivers a product, service, or result within defined boundaries of schedule, cost, and quality.
    • Projects have phases in their life cycle.
    • Examples of Projects:
      • Building a bridge
      • Reorganising a department
      • Moving house
      • 20 billion remote oil production unit, with pipelines, harbours and refineries
      • Emergency evacuation of a chemical plant
    • Projects can be classified based on:
      • Technologically complex: Projects involving new technologies, multidisciplinary expertise, etc.
      • Ambiguous: Projects with no clear best solution.
      • Multi-actor (stakeholders): Projects with multiple stakeholders, not all of whom have aligned interests.
      • Dynamic: Projects with continuously changing requirements..

    Assignments

    • Assignments are graded as Pass or Fail
    • Email any questions during the course to [email protected]
    • Include CT3101 – group nr – topic in the subject field

    What is a Project?

    • Unique: No routines, uncertainty, only long-term feedback, novel, few learning opportunities
    • Temporary: Has a beginning and an end, requires group of people, sense of urgency (deadline)
    • Focused: Delivers a product, service or result, boundaries (schedule, cost & quality)

    Phases in the Project Life Cycle

    • Not described

    Projects

    • Building a bridge: Yes
    • Reorganising a department: Yes
    • The supply of new goods to a supermarket: No
    • Moving house: Yes
    • Flight KL 494 from Amsterdam to Paris: No
    • 20 billion remote oil production unit: Yes/No
    • Can you find this out about customer X, before we meet him next week?: Yes
    • Emergency evacuation of a chemical plant: Yes/No

    Project Focus

    • Technologically complex: New technologies, multi-disciplinary
    • Ambiguous: No clear (best) solution
    • Multi-actor (stakeholders): Not necessarily similar interests
    • Dynamic: Continuously changing

    Project: Building a Tower

    • Build the highest tower that can carry a small cup
    • Material: 50 straws & 20 paperclips per team
    • Discuss the project review report (lessons learned)
    • Project lasts 25 minutes
    • Make adhoc teams of ~10 students

    Why and When Project Management?

    • Required for development of project management expertise
    • How to select projects for implementation
    • How to handle uncertainty or risk
    • “Strategic Project Management”

    Portfolio Management Characteristics

    • Includes all projects executed by a company
    • Aims at achieving strategic business objectives
    • An effectively managed collection of projects
    • Quantifiable (resources, finances, time, etc.)

    Why Manage Project Portfolios?

    • Identifies Projects that meet strategic needs
    • Supports multiple goals
    • Directs organizational improvement
    • Prioritises potential projects
    • Limits on-going projects to a manageable level
    • Identifies risk-intensive efforts
    • Balances short, medium, long-term returns
    • Prevents projects from getting in via “Backdoor”

    Five Key Questions of Portfolio Management

    • Are we investing in the right things?
    • How well are we executing?
    • Are we optimising our capacity?
    • Can we absorb all the changes?
    • Are we realising the promised benefits?

    Portfolio Management and Resources

    • About making decisions about allocation of resources or choosing between alternatives

    Portfolio Management Conclusions

    • Doing the right projects in the right way
    • Strategic fit, value added and portfolio risks
    • Numerous ways to select a portfolio
    • Highly complex process due to many interactions with many layers of the organization

    Stakeholders

    • Anyone who can influence or is influenced by the project
    • Internal and external to the organization
    • Influence based on power, interest & support
    • Actions are based on position (stakeholder management)
    • Not to be confused with shareholders
    • Discuss with your neighbour: stakeholders in a building project, ICT project and another type of project

    Power Interest Grid

    • Classification on two dimensions: Power & Interest

    Stakeholder Map

    • Classification of stakeholders into power, support, and interest categories

    Managing Stakeholders

    • Options based on position in stakeholder map

    Stakeholder Involvement

    • One of the reasons for disappointing project performance
    • Involve stakeholders!

    Stakeholder Involvement Framework (Maylor)

    • Includes planning, communication, managing expectations, monitoring and evaluation

    Assignment 1

    • The central case is the Notre Dame Cathredal Restoration project.
    • Tasks:
      • Identify 10 stakeholders from at least 5 different groups/categories.
      • Key success criteria for the main client in 2024.
      • Stakeholder evolution: goals, power positions, and attitudes at the beginning and end
      • Project management approach for stakeholders
      • How your approach would differ throughout the years.

    Teamwork

    • "A group of people who work together towards a joint goal"
    • Joint approach
    • Unique roles for team members
    • Specific abilities required
    • Performance criteria adopted
    • Output of the team > Sum of individual outputs
    • Exploiting differences in individual thought processes

    Types of Teams

    • Not described

    Basic Drives for Team Work

    • Security effect of cooperation
    • Performance effect of cooperation
    • Socialisation effect of cooperation
    • Rewarding effect of cooperation
    • Learning effect of cooperation

    Teamwork Efficiency

    • Not very efficient on its own
    • Needed for solving multidisciplinary problems

    Working with Professionals

    • Project professionals tend to be perfectionists
    • Project manager manages the process
    • Involve the team in decision making
    • Team empowerment

    Team Empowerment

    • Participative management
    • Ability of team members to adjust tasks
    • Responsibility & accountability for team members
    • Synergistic solutions (1+1 = 3)
    • Feedback individual performance & team performance
    • Ideally, put the authority there where the knowledge is….

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    Project Management Basics PDF

    Description

    Explore the fundamental principles of portfolio management, including the selection process for projects and the criteria used for evaluation. Understand the roles of key personnel and the significance of aligning projects with business strategy. This quiz covers essential aspects of project selection and management that drive organizational success.

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