Faster and better project portfolio decisions

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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.

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Faster and better project portfolio decisions

  1. 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   1  
  2. 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 E, K, M, U, Z T $ 160.00 $ 450.00 2.8 9 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 Traditional  list:   Very  hard  to   quickly   understand   impacts  and   dependencies.     Which  project(s)   would  you   choose?     …then  look  at   next  slide…   C, W  www.optimice.com.au   2  
  3. 3. Visualising  project  interdependencies   Mapping  allows  decision  makers  to  see  connections  and  thus  impacts  on   projects.  Highlighted  projects  will  not  impact  the  portfolio  if  removed.   Arrows  point  from  a   dependent  project  to   a  project  that  is   depended  upon   Strategic   Importance         Low   High   Circle  Size  =  Initial  Investment    www.optimice.com.au   3  
  4. 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    www.optimice.com.au   Matrix   4  
  5. 5. Project  meta-­‐data   • Only  a  few  simple  data  points  provide  deep  insights  into  the  portfolio  structure   About  each  project   Strategic  Fit   •  High   •  Medium   •  Low   Budget   •  $   •  NPV   •  Etc.   Benefit   •  High   •  Medium   •  Low   About  each  dependency   Importance   •  Critical   •  Important   •  Minor   Risk   •  High   •  Medium   •  Low   Type   •  Outcome   •  Resource   •  Etc.   Project  A   Project  A   Project  B    www.optimice.com.au   5  
  6. 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   6  
  7. 7. More  information   • Contact  Cai  Kjaer  for  a  confidential  discussion   – cai.kjaer@optimice.com.au  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.    www.optimice.com.au   7  

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