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Vol. XI Issue V - May 2009
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Project Management eJournal
FEATURED PAPER
Five Key Decisions for Portfolio Optimization
By Dr. David Ullman and Harvey Levine
Introduction
We live in an economically strapped world where it is essential for an organization to have a portfolio of successful projects. Yet General Motor’s inability to make decisions about its portfolio – what cars and trucks to develop and manufacture - may lead to its bankruptcy in 2009. Things aren’t much better in the IT industry where only 35% of the projects are successful (2006 Chaos Report from the Standish Group) with 40 - 46% late or over budget (Chaos and SAP). Furthermore, 80% of new technologies are not used as intended or abandoned within six months of implementation (Ernst & Young). Reality is probably worse than these values for IT projects, as they are based on self-reported numbers.
These statistics beg the question, Why is developing a portfolio of successful projects so hard? Although there are many responsible roles, two that are clearly important will be addressed in this paper. First, many projects that are undertaken are not aligned with the organization’s strategic directions. Second, poor portfolio decisions are made. Portfolio decisions are difficult because they are based on uncertain, evolving, conflicting and incomplete information. So, these decisions are risky. For success it is essential that projects be as insensitive as possible, i.e. robust, against all that can happen after the project is begun.
To read entire paper (click here) >>
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Dr. David Ullman, has a unique history of teaching, research and professional practice. He has taught the design process to over 1000 students in university classrooms and at over twenty major corporations. He has written what is considered to be the best text on the design process. He has founded two successful corporations and developed products for them. He has a reputation for designing simple solutions to problems and believes that in simplicity is elegance. Throughout his career he has strived to practice what he preaches, and preach what he has personally researched and used in practice. He is the Author of The Mechanical Design Process 4th edition, McGraw-Hill,2009 and Making Robust Decisions, Trafford, 2006. He serves as the President, Robust Decisions Inc, a company helping clients make decisions by design. He is an Emeritus Professor of Mechanical Engineering Design at Oregon State University, a Fellow of the American Society of Mechanical Engineers (ASME) and developer of Accord, the software enabler of robust decision-making. David can be contact at ullman@robustdecisions.com. |
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Harvey Levine, a past Chair of the Project Management Institute and a PMI Fellow, is a well-known project management (PM) author, consultant, and authority on the subjects of Project Portfolio Management (PPM), PM software, technology, earned value, and general PM practices. He has 47 years of PM experience, including 24 years with the General Electric Company. Since 1986, Harvey is Founder/Principal with The Project Knowledge Group, a PM consultancy based in New York and California that specializes in building PM competencies and providing guidance, training and services related to PPM and PM software selection, evaluation & implementation. He is a leading advocate and mentor in the expanding field of Project Portfolio Management. One of the leading consultants to the PM software industry in the USA, he has provided advice and services to many of the leading vendors in this field. Harvey has also been recognized as a PM software industry watchdog, and a PM software “guru” for his knowledge, understanding, and insights regarding both vendor and user issues. Mr. Levine is the author of three books: "Project Portfolio Management: A Practical Guide to Selecting Projects, Managing Portfolios, and Maximizing Benefits" (Jossey-Bass, 2005); "Practical Project Management: Tips, Tactics, and Tools" (John Wiley & Sons, 2002); and "Project Management using Microcomputers" (Osborne/ McGraw-Hill, 1986). Harvey is also a global advisor for PMForum and a member of the PM Ambassadors™ Speakers Bureau. Harvey can be contacted at halevine@earthlink.net |
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