Portfolio Management - Middle East Technical University

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Transcript Portfolio Management - Middle East Technical University

CE 726 - Strategic Management of Construction Companies Term Project

Portfolio Management

Arman Sümengen Gözde Bilgin 12.12.2013

METU

OUTLINE

Part 1: Portfolio Management Basics

 Modern Portfolio Theory               Portfolio Theory to Project Portfolio What is Portfolio?

Portfolio Components What is Portfolio Management?

Project Management and Strategic Planning Key Areas of Portfolio Management Project Management vs. Portfolio Management Goals of Portfolio Management Focus of Portfolio Management Role of Portfolio Manager Knowledge and Skills of Portfolio Manager Successful Portfolio Management Benefits of Portfolio Management Lack of Adequate Portfolio Management 

Part 2: Applications of Portfolio Management

CE 726 Term Project Portfolio Management

METU CE 726 Term Project Portfolio Management

PART – I Portfolio Management Basics

METU CE 726 Term Project Portfolio Management

MODERN PORTFOLIO THEORY

Initials of Portfolio Theory

 The revolution in financial investing known as modern portfolio theory  was initiated in the 1950's by Harry Markowitz. Portfolio Theory  investors can obtain significantly greater return at lower risk if, instead of choosing stocks and other financial assets based on their individual potentials, they make choices based on calculating the    impact on the risk and return generated by the portfolio as a whole . Diversification can lower risks to some extent  “Don’t put all your eggs in one basket” Standard deviation of returns is measure of portfolio risk  by choosing assets whose returns are not perfectly positively correlated, the risk of a portfolio can be lowered while maintaining/increasing the expected return Markowitz enabled a clear understanding of the investor's true goal  better strategy for selecting investments.

References:

Lee Merkhofer Consulting. (n.d.) Priority Systems: Project Portfolio Management Tools: Which Approach is Best?, retrieved on December1, from http://prioritysystem.com/tools.html

References:

Shaonan, S., Zhuofu, W., and Xiangtian, N. (2010). The research of large-scale construction enterprise project portfolio management Based on Vague sets,

Proceedings of E-Product E-Service and E-Entertainment (ICEEE),

1-6.

METU CE 726 Term Project Portfolio Management

MODERN PORTFOLIO THEORY

Initials of Portfolio Theory

  Risk of every individual component > Risk of portfolio Determination of specific mix of investments that generates higher return for a given level of risk 

Initials of Project Portolio

  F. Warren McFarlan applies portfolio method in IT projects in 1981.

Early studies of project portfolio management evolves in the order of  Project selection  Prioritizing Product Selection  Multiple Project Management

References:

Shiwang, Y., Jianping, W., and Na, G. (2009). Application of project portfolio management in the real estate corporations, Proceedings of Industrial Engineering and Engineering Management, 1225-1228.

References:

Miguel, P.A.C. (2006). A Case Study on Portfolio Management Implementation and Its Relation with Product Development Process in a Company from the Process Industry,

Proceedings of PICMET

, Istanbul, Turkey.

METU CE 726 Term Project Portfolio Management

PORTFOLIO THEORY TO PROJECT PORTFOLIO

From Modern Portfolio Theory to Project Portfolio

 Same reasoning behind the portfolio theory applies for the organization's with the goal to choose the project portfolio that creates the greatest possible value for the organization  improved project-selection strategy .  Improved cash flows (e.g., cost savings, increases in revenue) also serves for goals of project portfolio, but there are differing goals  like improving worker safety, customer service, relationships with business partners, and organizational capability.  Data on past performance helps to predict uncertainties with financial assets however it is generally not possible to predict uncertainties with return from projects  challenge with applying portfolio theory to projects.

References:

Lee Merkhofer Consulting. (n.d.) Priority Systems: Project Portfolio Management Tools: Which Approach is Best?, retrieved on December1, from http://prioritysystem.com/tools.html

METU CE 726 Term Project Portfolio Management

WHAT IS PORTFOLIO?

Merriam Webster Dictionary Online

 [general] “a set of drawings, paintings, or photographs that are presented together in a folder”  [financial] “the investments that are owned by a person or organization” 

Project Management Institute’s Standard for Portfolio Management

 “a component collection of

programs, projects,

or

operations

managed as a group to achieve strategic objectives”

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

PORTFOLIO COMPONENTS

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

PORTFOLIO COMPONENTS

Program

  sets of projects that are either related by a relationship, or aiming the same goal, or using the same resources brings benefits that would not be possible if the projects in the program were managed individually 

Operations

 the day-to-day organizational activities like production, manufacturing, finance, marketing, legal, information services, human resources, administrative services, and such.

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

References:

Schwalbe, K. (2006). Introduction to Project Management,

Boston, MA: Cengage Learning, Inc.

METU CE 726 Term Project Portfolio Management

WHAT IS PORTFOLIO MANAGEMENT?

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PORTFOLIO

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METU CE 726 Term Project Portfolio Management

WHAT IS PORTFOLIO MANAGEMENT?

Project Management Institute’s Standard for Portfolio Management

 “The centralized management of one or more portfolios, which includes  identifying,  prioritizing,    authorizing, managing, and controlling projects, programs, and other related work to achieve specific strategic business objectives” 

Portfolio Management

 Not only leads the organization to be strategically aligned but also depicts the current strategy and enables the organization to restructure its strategy .

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

WHAT IS PORTFOLIO MANAGEMENT?

Portfolio Management is about

Making strategic choices

 which markets, products, and technologies our business will invest in 

Project selection

 on which new product or development projects you choose from the many opportunities you face 

Resource allocation

 how you will spend your scarce engineering, R&D, and marketing resources 

Balance

 having the right balance between numbers of projects you do and the resources and capabilities you have available

References:

Cooper, R.G., Edgett, S.J., and Kleinschmidt, E.J. (1999). New Product Portfolio Management: Practices and Performance, Journal of Product Innovation Management, 16, 333-351.

METU CE 726 Term Project Portfolio Management 

PROJECT MANAGEMENT AND STRATEGIC PLANNING

Portfolios include any past present-future short-termed projects and programs. This leads;

 keeping short-termed  projects alive in the long termed portfolio enables strategic thinking through long-term focus 

Portfolio management acts as a link between

 strategic concepts, and  projects, programs, operations

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

KEY AREAS OF PORTFOLIO MANAGEMENT

Key Areas that lead achievement of strategic objectives

   

Maintaining portfolio alignment :

every portfolio component should be serving for at least one strategic objective,

Allocating financial, human, and material or equipment resources :

resources should be allocated according to prioritization of the components,

Measuring portfolio component performance :

the contribution of the component to the achievement of strategic objectives should be measured to be able to take corrective actions,

Managing risks :

each component should be analyzed for their risks that may affect the achievement of strategic goals.

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

PROJECT MANAGEMENT VS. PORTFOLIO MANAGEMENT

Project Management

 leads

PROJECT SUCCESS

Portfolio Management

 leads

ENTERPRISE SUCCESS References:

Schwalbe, K. (2006). Introduction to Project Management,

Boston, MA: Cengage Learning, Inc.

METU CE 726 Term Project Portfolio Management

PROJECT MANAGEMENT VS. PORTFOLIO MANAGEMENT

Project and Program Management addresses short-term tactical goals

   Are we carrying out projects well ?

Are projects on time and budget ?

Do project stakeholders know what they should be doing?

Portfolio Management addresses long-term strategic goals

   Are we working on the right projects ?

Are we investing in the right areas ?

Do we have the right resources to be competitive?

References:

Schwalbe, K. (2006). Introduction to Project Management,

Boston, MA: Cengage Learning, Inc.

METU CE 726 Term Project Portfolio Management

GOALS OF PORTFOLIO MANAGEMENT

Cooper and Edgett (2001)

    Maximize the Value of your Portfolio Seek Balance in your Portfolio Align your Portfolio Strategically Pick the Right number of Projects 

Kendall and Rollins (2003)

    Choosing the right project mix Linking the executive team’s strategies to current and planned projects Managing the project portfolio correctly Measuring to tangibly improve project performance relative to the executives’ strategic goals

References:

Cooper, R.G., and Edgett, S.J. (2001). Portfolio Management for New Products: Picking the Winners,

Product Development Institute

.

References:

Kendall, G.I., and Rollins, S.C. (2003). Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed,

USA: International Institute for Learning, Inc. and J. Ross Publishing, Inc.

METU CE 726 Term Project Portfolio Management

FOCUS OF PORTFOLIO MANAGEMENT

Main focus

 Project investments  Resources  Assets  Strategic objectives 

Focus after periodic Performance Measurement should be possible changes in

 Relative priorities  New projects of projects may be added  Active projects may be stopped or cancelled  Decisions may be taken that will affect specific project work plans or investments  New strategies may be adapted

References:

Kendall, G.I., and Rollins, S.C. (2003). Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed,

USA: International Institute for Learning, Inc. and J. Ross Publishing, Inc.

METU CE 726 Term Project Portfolio Management

ROLE OF PORTFOLIO MANAGER

Portfolio manager may be an individual, group or a governing body that is responsible for execution of portfolio management process

 are focused on “doing the right work” rather than “doing works right” 

Responsibilities of portfolio manager are

 Playing a key role in project prioritization , making sure there is balance of components, and that the components are aligned wih strategic goals ;  Providing timely assessment of portfolio and component performance , as well as early identification of portfolio-level issues and risks that are impacting    performance; Measuring the value to the organization through investment measurements, such as return on investment (ROI), net present value (NPV), payback period (PP), or other measures, or targets; Ensuring timely and consistent communication to the stakeholders on progress, impacts, and changes associated with management of portfolio; Participating in program and project reviews .

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

KNOWLEDGE AND SKILLS OF PORTFOLIO MANAGER

Portfolio manager should have skills in the areas of (Project Management Institute, 2013)

 Portfolio strategic  management and alignment, Portfolio management methods and techniques ,  Stakeholder engagement,  Leadership and management skills.

Project managers and their teams must develop knowledge and skills in the following areas (Schwalbe, 2006):

 All nine project management knowledge areas ,  The application area (domain, industry, market, etc.),  The project environment (politics, culture, change management, etc.),  General management (financial management, strategic planning, etc.),  Human relations (leadership, motivation, negotiations, etc.).

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

References:

Schwalbe, K. (2006). Introduction to Project Management,

Boston, MA: Cengage Learning, Inc.

METU CE 726 Term Project Portfolio Management

SUCCESSFUL PORTFOLIO MANAGEMENT

be able to answer the following questions that lead a successful PPM

     Are we investing in the right things?

Are we optimizing our capacity?

How well are we executing ?

Can we absorb all the changes ?

Are we realizing the promised benefits ?

References:

Pennypacker, J., and Retna, S. (2009). Project Portfolio Management: A view from the management trenches, The Enterprise Portfolio Management Council,

Hoboken, New Jersey: John Wiley & Sons, Inc.

METU CE 726 Term Project Portfolio Management

BENEFITS OF PORTFOLIO MANAGEMENT

Main benefits organisations should expect from adopting PPM approaches (Datz, 2013):

 Maximize value  investments while minimizing the risk Improve communication and alignment  Encourage business leaders to think "team" not "me" and to take responsibility for   projects Allow planners to schedule resources more efficiently Reduce the number of redundant projects and make it easier to kill projects 

The benefits PPM brings the business are (Turbit, 2005)

:  Portfolios can be constantly reviewed and altered if necessary to produce the  highest returns based on changing situations Management see the projects as groups of activities contributing to an initiative.  They are not a series of unrelated work Dependencies are easier to identify

References:

Datz, T. (2003). Portfolio management: how to do it right,

CIO Magazine

.

References:

Turbit, N. (2005). Project Portfolio Management (PPM),

The Project Perfect White Paper Collection

.

METU CE 726 Term Project Portfolio Management

LACK OF ADEQUATE PORTFOLIO MANAGEMENT

Lack of PPM processes and tools may lead (Kendall and Rollins, 2003):

 too many active projects,  projects that do not add value ,  projects not linked to strategic goals , and  an unbalanced portfolio  misaligned or low priorty components consuming critical resources (PMI, 2008).

References:

Kendall, G.I., and Rollins, S.C. (2003). Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed, USA: International Institute for Learning, Inc. and J. Ross Publishing, Inc.

References:

Project Management Institute. (2008). The Standard for Portfolio Management, 2nd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

PART – II Applications of Portfolio Management

METU

OUTLINE

Part 1: Portfolio Management Basics

Part 2: Applications of Portfolio Management

       Standard for Portfolio Management Case Study  Philips Research Benefits Example Quantitative Benefits Example Portfolio Management Software Portfolio Management in Construction Project Proposal (Tubitak 1001) CE 726 Term Project Portfolio Management

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Project Management Institute’s Portfolio Management Standard (2013)

  What is PPM Steps through Portfolio Management Processes 

Portfolio Management Processes

(inputs | tools and techniques | outputs)      Portfolio Strategic Management Portfolio Governance Management Portfolio Commmunication Management Portfolio Performance Management Portfolio Risk Management

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Steps in Portfolio Governance Management

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Identify Components  Categorize Components Evaluate Components  list of qualified components  search for common criteria review all components Select Components  create a subset for further evaluation Prioritize Components  rank by established criteria for balancing Balance Portfolio  create component mix that supports the strategy Communicate Portfolio Adjustment  provide clear understanding Authorize Components  allocate resources Review and Report Portfolio Performance  Monitor Business Strategy Changes  track the progress enable responsive portfolio

References:

Project Management Institute. (2008). The Standard for Portfolio Management, 2nd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Examples of Tools and Techniques

 Strategic Alignment Analysis

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Examples of Tools and Techniques

 Portfolio Roadmap

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Examples of Tools and Techniques

 Multi-Criteria Scoring Model

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Examples of Tools and Techniques

 Portfolio Balancing Using Indicators or Criteria

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Examples of Tools and Techniques

 Scoring Component Performance

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

STANDARD FOR PORTFOLIO MANAGEMENT

Examples of Tools and Techniques

 Portfolio Efficient Frontier

References:

Project Management Institute. (2013). The Standard for Portfolio Management, 3rd edition,

Newton Square, PA: Project Management Institute, Inc.

METU CE 726 Term Project Portfolio Management

CASE STUDY

PHILIPS RESEARCH

Philips Research

 Company Profile: research and generation of new technologies for Royal Philips Electronics  Staretegic Motivation: outcomes of research projects are to be applied in products of the company’s main business lines  Motivation behind PPM: Limitations in available financial resources and  the need to use these resources effectively and efficiently Portfolio Management:  380 projects annually, 4 programs  managed by a program board:   program manager, account managers and managers in charge of university relations or business initiatives annual planning cycle  starts with strategy definition, strategy deployment and portfolio definition; provides a specific budget for research the portfolio is regularly checked against the strategy  strategic fit

References:

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S.R., Moura, M., and Sloper, A. (2005). The impact of project portfolio management on information technology projects,

International Journal of Project Management, 23

, 524-537.

METU CE 726 Term Project Portfolio Management 

CASE STUDY

PHILIPS RESEARCH

Philips Research

 Portfolio Management:  selection of projects  research-oriented nature of projects and substantial differences in Philips’ business lines  regular review and assessment  project reviews 2-3 times a year, progress reporting 2-4 times a year  annual portfolio evaluation  strategic fit,       portfolio’s potential for improving the company’s competitive position, ensuring a right balance between different types of projects, existence of effective partnerships with external companies, portfolio’s consistency with current and future capabilities, probability of success, time to market, etc.

 one third of projects are are stopped  continued , other third are unfortunately does not share redirected , the rest benefits realization

References:

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S.R., Moura, M., and Sloper, A. (2005). The impact of project portfolio management on information technology projects,

International Journal of Project Management, 23

, 524-537.

METU CE 726 Term Project Portfolio Management

BENEFITS EXAMPLE

The impact of project portfolio management on information technology projects (De Reyck et al., 2005)

 Objective: to assess whether there is a correspondence between the use of PPM processes and techniques, and improvements in the performance of projects and portfolios of projects.

  Gap: Aim: Does PPM add value?

to investigate the extent to which organisations view their internal  projects as discrete projects or as a coherent portfolio of investments, and the value they get from taking this perspective.

Hypothesis: 1.

adoption level of PPM processes and techniques varies across organisations  classification of organisations according to their 2.

level of adoption higher adoption levels of PPM methods and techniques  result in increased value gained from information technology projects

References:

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S.R., Moura, M., and Sloper, A. (2005). The impact of project portfolio management on information technology projects,

International Journal of Project Management, 23

, 524-537.

METU CE 726 Term Project Portfolio Management

BENEFITS EXAMPLE

Questionnaire Survey (De Reyck et al., 2005)

  Respondents: 34 companies  from IT sector (55%), Business Operations (15%), General Management (15%), Strategy (12%), and Finance (3%)  Geographically, UK (40%), Europe (15%), and other (45%) Adoption level: How much the companies apply the following key elements?

1.

Centralised view of the project portfolio 2.

3.

4.

5.

6.

7.

8.

9.

Financial Analysis Risk Analysis Interdependencies Constraints at portfolio level Overall portfolio analysis Categorisation, selection accountability and governance Optimization Specialized software

References:

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S.R., Moura, M., and Sloper, A. (2005). The impact of project portfolio management on information technology projects,

International Journal of Project Management, 23

, 524-537.

METU CE 726 Term Project Portfolio Management

BENEFITS EXAMPLE

Questionnaire Survey (De Reyck et al., 2005)

  Categorization: Statictical methodology (SPSS | k-means cluster analysis with Ward’s method)  Stage I, Stage II, Stage III (increasing adoption level) Results:

Level of adoption vs. Organisational impact (correlation)

References:

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S.R., Moura, M., and Sloper, A. (2005). The impact of project portfolio management on information technology projects,

International Journal of Project Management, 23

, 524-537.

METU CE 726 Term Project Portfolio Management

BENEFITS EXAMPLE

Questionnaire Survey (De Reyck et al., 2005)

 Results:

Level of adoption vs. Level of problems with Projects

References:

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S.R., Moura, M., and Sloper, A. (2005). The impact of project portfolio management on information technology projects,

International Journal of Project Management, 23

, 524-537.

METU CE 726 Term Project Portfolio Management

QUANTITATIVE BENEFITS EXAMPLE

United States General Accounting Office (GAO) report (1994) presents a case study:

 After disapponting results, a company adopts portfolio investment techniques to manage its IT projects  previously spending too much on old systems and projects that does not help the company  The organisation develops a set of criteria to evaluate  benefits,  costs, and  risks and thus determines the best mix of projects for obtaining a better balance between its maintenance expenditures and strategic investments.  Result:  in three years  the organization reported a 14-fold increase in the return on investment from IT projects.

References:

De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S.R., Moura, M., and Sloper, A. (2005). The impact of project portfolio management on information technology projects,

International Journal of Project Management, 23

, 524-537.

METU CE 726 Term Project Portfolio Management

PORTFOLIO MANAGEMENT SOFTWARE

Tools for Project Portfolio Management

 Many tools that use different approaches are listed under  project prioritization, capital efficiency, enterprise project management, portfolio analysis, multi-project management, asset management, resource allocation, and such.

 Common property  Create, manage, and view data from a database of proposed, planned, and ongoing projects.

 They differ in:  Prioritizing  Planning projects and projects and optimizing managing the project portfolio, the execution of approved projects,  Managing the supply and demand for project resources.

References:

Lee Merkhofer Consulting. (n.d.) Priority Systems: Porject Portfolio Management Tools: Which Approach is Best?, retrieved on December1, from http://prioritysystem.com/tools.html

METU CE 726 Term Project Portfolio Management

PORTFOLIO MANAGEMENT SOFTWARE

Primavera P6 Enterprise Project Portfolio Management

Microsoft Office Project Server / Project Online

METU CE 726 Term Project Portfolio Management

PORTFOLIO MANAGEMENT IN CONSTRUCTION

Vergara, 1977 Kangari and Boyer, 1981 PROJECT SELECTION

project addition to reach desirable portfolio weighted average cost of capital portfolio approach market model approach

PORTFOLIO ANALYSIS

evaluation of condition of existing portfolio new portfolio analysis is presented

OTHER Veshosky, 1994 Han et al., 2004 Blismas et al., 2004 Shaonan et al., 2010

optimal portfolio selection project selection according to the enterprise strategy financial portfolio risk analysis by attention to main aspects of portfolio components proposes strategic moves portfolio theory typology of programme composition of a portfolio

Touran, 2010

investigation of impact of a cost overrun risk in single project's budget to portfolio budget

Ye and Mao, 2011 Abbasianjahromi and Rajaie, 2012

new project portfolio selection methodology based on the risk factor

Wu et al., 2013

investigates effect of project portfolio management on cost control discusses the pre-portfolio decisions of new energy investment projects

METU CE 726 Term Project Portfolio Management 

PROJECT PROPOSAL (TUBITAK 1001)

Proposal:

 Coordinators: Prof. Dr. Irem Dikmen Toker & Prof. Dr. Talat Birgonul  Evaluation: will be finalised in January 2014 

Gaps in literature:

 Limited work on portfolio management in construction  Limited analysis of dependencies between projects in a portfolio 

Aim: construction of a tool

 Quantify the dependencies  Depict dependencies visually  Support decision making process    Present Will be Will be scenario analysis dynamic intelligent   for any project candidate will be adaptable to changing external circumstances will be capable of suggesting strategies for management of construction portfolios

References:

Construction Engineering and Management Division, Middle East Technical University

METU CE 726 Term Project Portfolio Management

Any portfolio method is better than none at all, just do it!

R.G. Cooper & S.J. Edgett

METU CE 726 Term Project Portfolio Management 

ADDITIONAL REFERENCES

For Slide of “Portfolio Management in Construction”

         

Abbasianjahromi, H., and Rajaie, H. (2012).

Developing a project portfolio selection model for contractor firms considering the risk factor,

Journal of Civil Engineering and Management, 18

, 879-889.

Blismas N., Sher, W., Thorpe, A., Baldwin. (2004).

A typology for client’s multi-project environments,

Construction Management and Economics, 22

, 357-371.

Han, S.H., Diekmann, J.E., Lee, Y., and Ock, J.H. (2004).

Multi-criteria Financial Portfolio Risk Management for International Projects,

Journal of Construction Engineering and Management, 130

, 346-356.

Kangari, R., and Boyer, L. T. (1981).

Project selection under risk,

Journal of Construction Division ASCE, 107

, 597–608.

Shaonan, S., Zhuofu, W., and Xiangtian, N. (2010).

The research of large-scale construction enterprise project portfolio management Based on Vague sets,

Proceedings of E-Product E-Service and E-Entertainment (ICEEE),

1-6.

Touran, A. (2010).

Probabilistic Approach for Budgeting in Portfolio of Projects,

Journal of Construction Engineering and Management, 136(3),

361-366.

Veshosky, D. (1994).

Portfolio approach to strategic management of A/E firms,

Journal of Management in Engineering, 10

, 41– 47.

Vergara, A.J. (1977).

Probabilistic estimating and applications of portfolio theory in construction, PhD thesis,

Urbana University of Illinois at Urbana-Champaign

.

Wu, Y., Chen, J., Liu, C., and Wang, H. (2013).

On the method and model of energy enterprise project portfolio selection and optimal allocation of resources, Journal of Theoretical and Applied Information Technology, 48(1), 612-619.

Ye, Z. and Mao, D.-J. (2011).

The Cost Control of Communication Construction Projects: Case Study of Zhejiang Post and Telecommunication Construction Corporation, Mechanic Automation and Control Engineering (MACE), 15-17 July, Hohhot, 1736-1739.