Project Management

1. Organization Strategy
& Project Selection
Dr. Shuja ul Islam

2. Organizational Strategy
 Organizational strategy specifies the organization’s
mission, vision and objectives and develops policies
and plans, often in terms of projects and programs,
created to achieve the organization’s objectives. It also
allocates resources to implement them.
Organizations use projects
to convert strategy into new
products, services and process
needed for success.

3. Strategic Management Process
 Four activities of
Strategic Management
Process
 Review and define the
Organizational mission
 Set Long range goals &
objectives
 Analyse & formulate
strategies to reach
objectives
 Implement strategies
through projects

4. Organization Strategy & Project
Management
Project managers need to understand strategy for
two reasons:
 To make appropriate decisions and adjustments
 To make effective project advocacy to senior
management

5. Project Portfolio Management System
 Need for a project portfolio
management system:
 Problem 1: The
Implementation Gap
 Problem 2: Organization
Politics
 Problem 3: Resource
conflict & Multi-tasking
Portfolio: A portfolio refers to projects, programs and operations
managed as a group to achieve strategic objectives.
The projects or programs of the portfolio may not necessarily be
interdependent or directly related.

6. PPM- Challenges

7. Project versus Portfolio
&

8. Project Portfolio Management (PPM) Versus
Project Management (PM)

9. PPM _Best Practices

10. Portfolio Management System
 Classification of the Project
 Compliance Projects
 Strategic Projects
 Operational Projects
 Selection Criteria
 Financial
 Payback period
 NPV
 Non Financial
 Checklist Model
 Multi-Weighted Scoring Model
Classification of
Projects
Complianc
e Project
(Must do)
Strategic
projects
Operational
Projects

11. 2–11
Financial Models
 The Payback Model
 Measures the time the project will take to recover
the project investment.
 Uses more desirable shorter paybacks.
 Emphasizes cash flows, a key factor in business.
 Limitations of Payback:
 Ignores the time value of money.
 Assumes cash inflows for the investment period
(and not beyond).
 Does not consider profitability.

12. 2–12
Financial Models (cont’d)
 The Net Present Value (NPV) model
 Uses management’s minimum desired rate-of-return
(discount rate) to compute the present value of all net
cash inflows.
 Positive NPV: project meets minimum desired rate
of return and is eligible for further consideration.
 Negative NPV: project is rejected.

13. 2–13
EXHIBIT 2.3a
Example Comparing Two Projects
Using Payback Method

14. 2–14
EXHIBIT 2.3b
Example of Comparing Two Projects Using
Net Present Value

15. Project Screening Matrix

16. Project Screening Process

17. Portfolio Management System

18. Balancing the Portfolio for Risks and
Types of Projects
 Bread-and-butter Projects
 Involve evolutionary improvements
to current products and services.
 Examples include software upgrades and
manufacturing cost reduction efforts.
 Pearls
 Represent revolutionary commercial opportunities
using proven technical advances. e.g. easypaisa
 Oysters
 Involve technological breakthroughs
with high commercial payoffs. e.g. concept mobile
 White Elephants
 Showed promise at one time
but are no longer viable. e.g. Nokia

20. PPM Process & Firm Strategy

21. PPM Process & Firm Strategy

22. Thank You