Management of Multiple Projects, Essay Example
Competitiveness in the current scenario—where a firm competes beyond domestic circles of competition—has dynamically changed, evolved and is based on the parameter of making the right choices rather than the bulkiness or productivity at large. Making right choices implies choosing the right kind of projects with proper resource allocation and ensuring that those projects are executed in a timely manner.Thus, project portfolio management (PPM) becomes a necessary choice for companies with the increased emphasis on the choices with regard to executing projects. According to Van Zyl Malherbe (2011), PPM is a strategic business practice through which projects are managed based on a strategic portfolio where the choice of such projects is based on their alignment with strategic objectives of companies. Further, Van Zyl Malherbe (2011) stated that PPM necessitates that the choice and execution of projects are in line with and support the business and strategic objectives of organizations. The above author further stressed that PPM requires organizations to integrate their operational and strategic management processes.
PPM requires the management executives to prioritize on projects and to substantiate such prioritization giving evidence as to why certain projects are to be chosen while others are not. The PPM executives also need to manage the resource allocation properly and also monitor the financials with regards to each project being undertaken. The managers are constantly faced with challenges such as changing demands and needs of the internal as well as the external customers. Such changes in the competitive environment has led companies to continuously change project management strategies while some companies end up facing demand for resources more than their capabilities to provide the same. Therefore, there is a need for PPM and to clearly define it. Moreover, there is a need to distinguish PPM from management of multiple projects because in the absence of such a clear distinction, project failures occur due to poor resource allocation and confusion in execution.
In furtherance, Dye & Pennypacker (2000) stated that there also needs to be a mutual compatibility between project portfolio management and the management of multiple projects. The problem in this scenario also lies with managers not being able to relate the importance or relevance of the chosen projects to corporate strategy. Therefore, the need for proper implementation of PPM lies in understanding its purpose, its compatibility and difference to management of multiple projects. This paper, therefore, strives to bring out and understand in-depth the above stated distinction and how the same could aid companies in managing project portfolios in an improved manner.
Implementing the PPM
Upon selecting a project portfolio and the process of executing it alters the risk level and relevance of the selected portfolio to corporate strategy. In case, the projects do not have significance to the corporate strategy of the concerned organization, the selection of a portfolio of projects cannot be of any use.Therefore, for selecting a portfolio of projects there has to be not just a link but a ‘clear link’ to corporate strategy. Companies often assume that whatever projects they receive come under their project portfolio, however, it is not so (Demaio, Verganti, & Corso, 2000). Moreover, a set of independent projects chosen cannot be termed a project portfolio; it can only be a group of projects which are just like any normal projects with without relevance to corporate strategy. Thus, the chosen portfolio of projects should be based on relevance to long standing business strategy of an organization. It is also necessary to understand that no project is independent but is in relation to other similar projects and hold relevance of whatever value to the long standing business strategy. It is very much necessary that the portfolio of projects should be aligned to strategic goals of an organization.
The problem also lies with the organizations’ inability to define their independent strategic goals and vision and this might lead them to succumb to political pressure leading improper project management.
Major differences between the PPM and Multiple project management
As mentioned earlier, companies have to clearly establish the difference between project portfolio management (PPM) and multiple project management. Upon reviewing various literatures, the following differences are articulated and understood:
- The purpose of PPM is to choose projects and prioritize on them while that of multiple project management is to allocate resources to the selected projects.
- The focus of project portfolio management is strategic while multiple project management focuses on tactical issues (Ireland, 2000).
- The planning emphasis of PPM is for long durations to medium durations such as quarterly and annual plans while that of multiple project management is for short duration usually on day to day basis.
- The PPM operations are usually executed by the senior management while the multiple project management is carried out by resource managers or project managers.
- The objective of PPM is to choose the right kind of projects and optimize the results of undertaking the projects in order to contribute to the business strategy of a firm while the task of multiple project management is to see that those projects are executed in time following the guidelines set by PPM executives.
- The long term goals and objectives of organizations, their strategic vision for future business, change management fall under the responsibility of PPM while multiple project management focuses short term goals such as a completion of a project in its assigned time period.
- The PPM monitors resource utilization while multiple project management tasks is to effectively utilize the resources and allocate them properly as per the guidelines of PPM executives.
Priorities assessment and resource allocation
Often there is a misconception that resources allocation comes under PPM often with the evidence of short term resources allocation methods. In this manner, the projects were allocated resources based on their urgency perceived by managers through evaluating the parameters of risk levels, complexity, and the financials. As a result, the projects which had lower risk levels although strategically significant were given least preference against those that are not strategically important but were rated high on risk considering the urgency factor(Dye & Pennypacker, 2000). Therefore, such an evaluation does not adhere to the principles of PPM which is to study the relevance of projects to strategic objectives held by organizations and then consider their selection. Hence, projects should not be prioritized based on their risk or urgency levels but on their strategic relevance to business objectives notwithstanding which would lead to improper judgement prioritizing every project as number one in corporate portfolio. Such prioritization should also be done by relatively comparing every project with every other and then assign the priorities accordingly.
The resource allocation, on the other hand, should follow priorities assigned to projects. In other words, the projects which have highest priority should be allocated resources before all others and to see that there is consistency in such resource allocation. Resource allocation is the task of multi project management team consisting of resource managers and project managers. Further, Pennypacker (2005) suggested that resource managers should check whether the allocated resources are fully utilized for the projects while it is also equally important to monitor the progress of the projects and to see that they are executed on time with the expected quality output.The focus should be on resource allocation and proper utilization of resources because the project managers often do not have discretion to obtain additional resources or time required to complete a project. In multiple project management it is important to draft realistic schedules to newly added projects in addition to the already existing ones.
When working in a multi-project environment often involving portfolio of projects, it is important to focus the compatibility between each and every other projects which is possible through the strategic portfolio method. In multiple project environments it is also very important to manage the inter-project links such as the tangible links, for example, financial and technical resources and other intangible type links such as associations with clients, knowledge sharing, etc. New projects added also show technical and organizational linkages with the current projects and hence such interdependencies can be utilized in a strategic manner. However, such management of the interdependencies is often complex and might impact overall performance of project management(Pennypacker, 2005).
Change management is another important feature of multiple project management which has to be optimally managed. There are occurrences of constant changes taking place in a multiple project environment. Hence, there is a need for an organized choice and prioritization of projects with proper guidance to resource managers and project managers in their areas of planning and resources allocations.There should be optimal resource allocation based on the preset priorities throughout the projects’ durations.In the allocation of resources, the challenges arise mainly while allocating human resources of the right type and capabilities for prioritized projects and this becomes very complex in a multiple project environment(Hendriks, 2006). Such human resource allocation should be done keeping in mind the long term business objectives and strategic vision of organizations.
However, the senior management finds it problematic to allot the right human resources because it might give wrong impressions to others as there is prioritization based on portfolio of projects. However, human resources for many reasons is vital to PPM because every prioritized project needs specified skills and hence finding right people with the much needed skills also becomes difficult for project managers.Moreover, conflicts are likely to occur while allocating human resources leading to poor project performance, therefore, the human resources allocation should be done through a systematic perspective and at the same time striving to resolve the wake of crises if any.
Despite the clear differences between PPM and multiple project management evident from the discussions, the center point is that both PPM and multiple project management are compatible with each other and the roles of both managers are flexible during the execution of projects. It cannot be said that the project portfolio managers enjoy greater discretion because sometimes the project and resources managers have to take discrete decision on their own when situation arises. Working in a multiple project environment is challenging both for the project managers and the senior managerial staff because there should be synchronization between their roles, proper execution of roles, work coordination and knowledge sharing. In conclusion, this paper recognizes the importance of both PPM and multiple project management as vital for today corporate performance which is based on the compatibility of both PPM and multiple project management.
Demaio, A., Verganti, R., & Corso, M. (2000). A multi-project management framework for new product development. European Journal of operational research, 78 (2), 178-191.
Dye, L. D., & Pennypacker, J. S. (2000). Project Portfolio Management and Managing Multiple Projects:Two Sides of the Same Coin? Proceedings of the Project Management Institute Annual Seminars & Symposium. Houston, Texas: Project Management Institute.
Hendriks, A. M. (2006). Human resource allocation in a multi-project R&D environment Resource capacity allocation and project portfolio planning in practice. International Journal of project management, 17 (3), 181-188.
Ireland, L. R. (2000). Managing multiple projects in the twenty first century. Proceedings of the Annual Project Management Institute Seminars & Symposium (pp. 83-89). Houston, Texas: Project Management Institute.
Pennypacker, J. S. (2005). Project Portfolio Management Maturity Mode. Centre for Business.
Van Zyl Malherbe, D. M. (2011). A definition of project portfolio management based on a multiple perspective analysis. University of Stellenbosch, Management. University of Stellenbosch.
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