Do You Have Portfolio Analysis Skills? – Part 2

This article is a second article for the first related article in my LinkedIn profile. please refer to it for more understanding of the article.
https://zalbasireppm.com/pmo/do-you-have-portfolio-analysis-skills-part-1/

Portfolios might be defined for certain type of projects with similarity or not, with shared resources or not. The main goal is to have a director who is responsible to deliver the projects goals and the strategic goals.

The following scenario is for a small consultant who defined portfolios for each region. Please refer to part one in this platform.

The report on the photo is not a dashboard. You don’t need complicated dashboard or sophisticated coloured charts to mange your projects and portfolios. the photo is the data which top management would like to see. From my experience top management still looking to see the real numbers with its charts to go deep immediately to investigate the details rather than just asking. As I mentioned in the first part of this article, I prefer to use Primavera P6 EPPM because it is powerful and used already by most contractors, consultants and clients all over the world.

Reporting by earned value is my preferred method for reporting projects-based organizations performance. Because using EVM gives them one source of truth to see what was planned, what was performed, the actual costs, the resources allocation and future loads.

Earned value management (EVM) is used to assess the schedule and cost performance of a project in a sample terms: –

A. ahead of / on / behind schedule

B. under / on / over budget

Using the following Values:

1. Planned Value (PV) — The budgeted value of the work completed so far at a specific date.

2. Earned Value (EV) — The actual value of the work completed so far at a specific date

3. Actual Cost (AC) — The total expenditure for the work so far at a specific date.

4. Schedule Performance Index (SPI) — ratio between EV and PV, to reflect whether the project work is ahead of / on / behind schedule in relative terms.

SPI = EV/PV

If the project is behind schedule the SPI < 1 (i.e. achieved less than what planned)

If the project is on schedule the SPI = 1

If the project is ahead of schedule the SPI > 1 (i.e. achieved more than what planned)

5. Cost Performance Index (CPI) — ratio between EV and AC, to reflect whether the project work is under / on / over budget in relative terms.

CPI = EV/AC

If the project is over budget the CPI < 1 (i.e. achieved less than spent)

If the project is on budget the CPI = 1

If the project is under budget the CPI > 1 (i.e. achieved more than spent)

So lets see the status of the different portfolios for each city for this small consultant.

Sharjah Portfolio is behind schedule (SPI=0.79) and over budget (CPI=0.84). The reasons needed to be investigated and a decision to be made.

Ras Al Khidmah Portfolio is behind schedule and on budget. Even there are delays on the projects, but all staff are paid by the client.

Abu Dhabi Portfolio are behind schedule and over budget.

Dubai Portfolio are behind schedules and over budget due to variation and more scope included.

Ajman Portfolio still not started and maybe this is the reason why the consultant is still keeping some staff with no payment on the other regions.

The challenges which will be faced soon is that most projects are ramping up to catch the schedules on the fourth quarter and some shared resources will be overloaded. The consultant has to bring some temporary staff, or maybe permeant too depends on the future needs which is clear that even 2018 has many projects, however less staff will be needed. Please refer to the resource allocation chart. If there are delays, then the staff might be able to distribute their loads. However, the main scope of the consultant is to push the contractors to deliver to catch the delayed schedules.

Overall, the consultant needs to get more projects as the confirmed projects in 2018 are in Ajman, Abu Dhabi and Dubai. The projects in Sharjah and Ras Al-Khaimah are completing by or after mid year. The business development needs to get more projects ASAP considering awarding is taking from 2 to 6 months to start form biddings. The HR needs to look at potential termination or long leave for some staff until new projects is awarded.

Considering the long employment process and regulations, long leave might be offered and negotiation with some clients needed if they wish to keep some of them.

Ajman has two projects to start on 2018, the staff is still not assigned, The consultant is planning to move some staff of Sharjah and Ras Al-Khaimah to Ajman. Considering some staff are residing with their families some discussion about moving to Ajman from Ras Al-Khaimah is needed. Although, with the modern highways and trip time which is less than one hour, it will not be an issue. However, the consultant has a policy to ensure their staff are happy. So they would prefer to give them early notice as possible when confirmed to help them manage their family lives.

On strategy planning, the consultant is managing all projects from their HO in Dubai with small office in Abu Dhabi. It is a time to review a hold decision to expand Abu Dhabi office with projects until 2019. The consultant needs to review the business development and bidding reports to take such important investment. This will include design projects too.

On the recruitment planning, there is no urgent needs to recruit for 2018 expect for some critical needs which needs to be covered.

Overall profit was not according to target which was 6%. However, 4% profit is around the trend in the market for UAE and the region.

The risks of overloading need to be looked at month by month to avoid any problems with OT approvals by the client when needed. A consideration not to overload staff and fatigue management need to be reported every week.

Lesson learnt of the previous period needed to be recorded and the staff need to be educated about it and trained on it.

Business development and opportunities development and seizing needed for all project management teams who have face to face dealing with the clients.

There are a lot to say and recommend and plan form one photo like above. If you have more results to get from the above phot, please share it..

If you don’t have such reports, you can’t improve your organization to have sustainable business.

Best wishes for all.

Engr. Ziad Albasir

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