Faster and better project portfolio decisions
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This document discusses how mapping project interdependencies can improve decision making for complex project portfolios. It provides examples of tough questions that can be answered through visualizing relationships between projects, such as how optimizing one project's funding may impact others. Research is cited showing mapping interdependencies leads to higher quality decisions than traditional lists or matrices. The document demonstrates how a visual map can help choose which projects to cut from a portfolio to reduce spending.
![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
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Faster and better project portfolio decisions
- 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. 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. 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. 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. 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. 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. 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