faster and better project portfolio decisions
DESCRIPTION
Interdependencies between projects create complexities for the management of project portfolios. In times of uncertainty this challenge is even greater due to the difficulties in predicting the flow-on effects from changes to projects in the portfolio. Hence, in times of disruptive change a good understanding of project interdependencies is particularly important.TRANSCRIPT
www.optimice.com.au 1
The tough questions you face
• We map the interdependencies in large complex portfolios to enable better decision making.
• Tough questions we answer: – Need to optimize project spend -‐ how will this impact other projects?
– A large project is struggling – what risk does that represent for the portfolio?
– Our project managers aren’t seeing the ‘big picture’ – how do we communicate interdependencies?
• How do we improve decision quality? – See example below…
www.optimice.com.au 2
Scenario – “Cut 10% off the $16mill project portfolio investment!”
IDEA / PROJECT Investment
C (thousands) NPV (thousands) NPV/C Strategic fit is dependent
upon: A $ 300.00 $ 1,200.00 4.0 9 B, I, K, O
B $ 240.00 $ 466.00 1.9 8 A, I, K, O
C $ 100.00 $ 367.00 3.7 6 J, W, Y
D $ 120.00 $ 330.00 2.8 6 L, V
E $ 700.00 $ 2,770.00 4.0 7 -
F $ 800.00 $ 1,560.00 2.0 8 U
G $ 872.00 $ 1,500.00 1.7 3 N, X
H $ 50.00 $ 400.00 8.0 7 P
I $ 1,400.00 $ 3,500.00 2.5 5 A, O
J $ 2,500.00 $ 4,000.00 1.6 7 W, Y
K $ 400.00 $ 500.00 1.3 5 A, B, I, O
L $ 985.00 $ 680.00 0.7 9 -
M $ 350.00 $ 500.00 1.4 4 -
N $ 950.00 $ 1,450.00 1.5 6 G, K, U, W, X
O $ 232.00 $ 1,600.00 6.9 7 A, B, I, K
P $ 554.00 $ 1,600.00 2.9 8 F
Q $ 400.00 $ 2,650.00 6.6 6 W, X
R $ 562.00 $ 3,000.00 5.3 9 P
S $ 391.00 $ 120.00 0.3 7 D, L, V
T $ 160.00 $ 450.00 2.8 9 E, K, M, U, Z
U $ 400.00 $ 2,000.00 5.0 7 -
V $ 843.00 $ 1,900.00 2.3 6 D, L
W $ 620.00 $ 1,900.00 3.1 7 A, J, X
X $ 720.00 $ 46.00 0.1 7 -
Y $ 871.00 $ 676.00 0.8 7 C, W
Traditional list: Very hard to quickly understand impacts and dependencies. Which project(s) would you choose? …then look at next slide…
www.optimice.com.au 3
Visualising project interdependencies
Strategic Importance
Low
High
Circle Size = Initial Investment
Arrows point from a dependent project to a project that is depended upon
Mapping allows decision makers to see connections and thus impacts on projects. Highlighted projects will not impact the portfolio if removed.
www.optimice.com.au 4
Map = Decision Quality
• 264 separate experiments conducted by University of Technology Sydney has proven that:
“The use of [Visual Portfolio Maps] is correlated with the highest levels of decision quality“
Killen, C, 2013, “Visualizations of project interdependencies for portfolio decision making: Evaluation through decision experiments”, Decision Sciences Institute Annual Conference, Baltimore Maryland
Map List Matrix
www.optimice.com.au 5
Project meta-‐data
• Only a few simple data points provide deep insights into the portfolio structure
Project A
Project B
Importance • Critical • Important • Minor
Project A
Type • Outcome • Resource • Etc.
Strategic Fit • High • Medium • Low
Risk • High • Medium • Low
Benefit • High • Medium • Low
Budget • $ • NPV • Etc.
About each project About each dependency
www.optimice.com.au 6
Explore online
• Explore example online map at: www.optimice.com.au/projectinterdependencies.php
See example: www.optimice.com.au/projectinterdependencies.php
www.optimice.com.au 7
More information
• Contact Cai Kjaer for a confidential discussion – [email protected] or +61 411 569 594
– Visit www.optimice.com.au/projectinterdependencies.php.
• Where does this come from? – Optimice and University of Technology Sydney (Australia) have researched the power of visualising project interdependencies over a 2 year period.
– Winner: Best Technical Paper at the APMI conference in 2010
– International recognition: Published in the International Journal of Project Management in 2012.
– Results of 264 experiments demonstrates that visual maps of interdependencies are far more effective than traditional methods. These exciting results are presented at the Decision Sciences Institute's annual conference in November 2013.