Project Portfolio Management

In our small example 4 different projects are compared and evaluated. Due to the limited budget not all of them can be implemented. Therefore, the most effective ones must be selected. The projects are aiming at developing new fields of compentence in the company as the basis for customer orders and new business in the future. The projects 2, 3 and 4 are co-financed (eg through public funding). Projects 1 and 4 require higher investments (double amount compared to the other projects). The field of competence 1 (capability) represents the most attractive business field.

These and other dependencies must be taken into account in the model. Through Qualitative Modeling you can weight interconnections between factors by roughly estimating one factor’s influences on another factor as increasing or decreasing, weak, middle or strong, and immediate, middle-term or long-term. To do so open the properties dialogue of any connection by simply clicking/tapping on it.

To take different perspectives on the model you can make any factor to the central factor (here Project 2), allowing you to get a better look at what influences this factor and what this factor influences. You can also use filters and cluster to make a great model clearly. For this, you can define any category you want per factor. Having assigned categories you can choose the Menu … View … Filter/Cluster and select which factors you do not want to see in the model and hence filter, or which factors should be presented summed up as a cluster. A cluster could, for example, form a project with the respective project steps / activities and their interconnections. This allows you to make large models with thousands of factors at all times clear and transparent.

The Insight Matrix shows how the selected factor is impacted by the other factors in the short-, middle- and long-term. On the horizontal x-axis, you can compare their differing impacts and on the vertical y-axis you can look at the change of these impacts over time. In simple words, the higher the x-value, the stronger the positive effect of the factor.

The Insight Matrix of our small example shows that the "Project 3" is the most effective measure in a short-term view. However, the impact of "Project 1" is negative.

In the medium term, the "Project 3" continues to be the most effective lever, but the "Project 1" becomes more and more relevant.

The "Project 1" even outperforms the other projects in the long term view, because the most attractive competence and thus business fields can be established by "Project 1". However, the project 4 appears to play no role at all.

This impression is however misleading. The Insight Matrix of the "Project 1" shows that the "Project 4" has a significant impact on "Project 1".

This also confirms the model view. The field of competence 3 (Capability 3) can be established by "Project 4". This field of competence leads directly to no project revenues, but it supports "Project 1" and thus indirectly the development of an attractive business area.

Therefore, the projects 1 and 4 should be implemented simultaneously - in the sense of an optimal project selection

For a permanent planning, prioritization, control and monitoring of all projects within an organization you can use different attributes per factor, e.g. the current status of implementation. This additional information can also be displayed in the Insight Matrix by using different bubble sizes. Looking at our example model, it can be quickly realized that obviously wrong priorities have been set. The long-term effective "Project 1" has just started and the "Project 3" with the lowest long-term relevance is nearing completion.

In order to get deeper insights into your model, you can quantify and simulate your model or parts of it. The graph above shows the simulation results of a scenario that includes only the implementation of the project 3. Thereafter EUR 10 million can be achieved over time.

The next scenario includes the simultaneous implementation of projects 2 and 3. Here the success can be more than doubled over time.

The sole implementation of the project 1 leads to similar success, ...

... that can be increased significantly by implementing project 4 at the same time.