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Chap 3

The document discusses different methods for selecting projects and managing project portfolios, including checklist models, scoring models, and the analytic hierarchy process. It also covers developing a project portfolio matrix to classify projects and keys to successful portfolio management.

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9 views18 pages

Chap 3

The document discusses different methods for selecting projects and managing project portfolios, including checklist models, scoring models, and the analytic hierarchy process. It also covers developing a project portfolio matrix to classify projects and keys to successful portfolio management.

Uploaded by

ngocngan1901.work
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Project Management: Achieving

Competitive Advantage
Fifth Edition, Global Edition

Chapter 3
Project Selection and
Portfolio Management

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Project Selection

Screening models help managers pick winners from a pool


of projects. Screening models are numeric or nonnumeric
and should have:
• Realism
• Capability
• Flexibility
• Ease of use
• Cost effectiveness
• Comparability
Copyright © 2020 Pearson Education, Ltd. All Rights Reserved
Approaches to Project Screening

• Checklist model
• Simplified scoring models
• Analytic hierarchy process
• Profile models

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Checklist Model

A checklist is a list of criteria applied to possible projects.


• Requires agreement on criteria
• Assumes all criteria are equally important

Checklists are valuable for recording opinions and


stimulating discussion.

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Copyright © 2020 Pearson Education, Ltd. All Rights Reserved
Simplified Scoring Models

Each project receives a score that is the weighted sum of


its grade on a list of criteria.
Scoring models require:
• agreement on criteria
• agreement on weights for criteria
• a score assigned for each criteria

Score =  (Weight  Score)

Relative scores can be misleading!

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Copyright © 2020 Pearson Education, Ltd. All Rights Reserved
Copyright © 2020 Pearson Education, Ltd. All Rights Reserved
Analytic Hierarchy Process

The AHP is a four step process:


1. Construct a hierarchy of criteria and subcriteria.
2. Allocate weights to criteria.
3. Assign numerical values to evaluation dimensions.
4. Determine scores by summing the products of numeric
evaluations and weights.
Unlike the simple scoring model, these scores can be
compared!

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Figure 3.1 Sample AHP with Rankings for
Salient Selection Criteria

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Figure 3.4 Profile Model

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Project Portfolio Management

The systematic process of selecting, supporting, and


managing the firm’s collection of projects.
Portfolio management objectives and initiatives require:
• decision making
• prioritization
• review
• realignment
• reprioritization of a firm’s projects

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


The Portfolio Selection Process
The portfolio selection process is an integrated framework of
interrelated steps and activities.
• Preprocess Phase
– Methodology of selection and strategy
• Process Phase
– Prescreening, individual project analysis, screening,
portfolio selection, and portfolio adjustment
• Postprocess Phase
– Project development, project evaluation, and portfolio
completion

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Figure 3.8 Project Portfolio Selection
Process

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Developing a Proactive Portfolio

The project portfolio matrix classifies projects into four


types according to commercial potential and technical
feasibility:
• Bread and butter
• Pearls
• Oysters
• White elephant

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Figure 3.9 Project Portfolio Matrix

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Keys to Successful Project Portfolio
Management

• Flexible structure and freedom of communication


• Low-cost environmental scanning
• Time-paced transition

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved


Problems in Implementing Portfolio
Management

• Conservative technical communities


• Out-of-sync projects and portfolios
• Unpromising projects
• Scarce resources

Copyright © 2020 Pearson Education, Ltd. All Rights Reserved

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