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For an organisation of which you are part, or one which with you are familiar, or one sourced from the Internet, you are asked to examine the introduction of a project portfolio management function in order to improve the organisation’s strategic advantage, project success and achieve its sustainability goals. Prior to developing the plan for the introduction of the project portfolio management function, you are asked by Executive Management to consider the way the organisation currently manages its project portfolio and then address the following requirements:

How the organisation is likely to view the introduction of portfolio management given its size and project needs?
How the organisation currently manages its projects and is there scope for improvement?
How the organisation incorporates sustainability criteria into its business decisionmaking process and its operations, including social equity, economic efficiency and environmental performance? Is there scope for improvement and how might this be achieved?

The likely successes that the organisation might experience by introducing a project portfolio management process.
The likely challenges the organisation might face with the adoption of the project portfolio management process and how would these challenges be overcome?

What would be the key elements of a plan to introduce project portfolio management into the organisation and how would it impact the strategic goals?
What type of project portfolio management model would you propose for the organisation and why?
How would you plan to implement project portfolio management into the organisation?

What tools/techniques are available for managing different types of project portfolios and which ones would you propose for the organisation and why?

In considering these requirements, be mindful of the benefits of project portfolio management but draw comparisons and highlight specific cases where any shift by the organisation towards project portfolio management may have both positive and/or negative impacts.

Vaughan Constructions

Corporations who undertake projects are investing in their future. This can be in the form of increasing the value for owners/shareholder, towards the reduction of expenditure and enhancement of revenue, ensuring the continuity of the business of the corporations, etc. These projects require allocation of corporation's resources such as finance, human resource, the attention and expertise of the management, etc.

Project Portfolio management or PPM can be defined as the centralization of management of processes, technologies, methodologies utilized by project management offices and project managers towards collective analysis and management of the corporation's current on-going projects and proposed projects (Turner, 2014).

This report examines, analyses the current project portfolio management systems of a small sized Australian construction company, Vaughan Constructions which has offices in Melbourne and Sydney. The report further provides Vaughan Construction suggestions and recommendations towards implementation of a Project Portfolio Management system. It includes exploring the opportunities and threats the company can face by utilizing a Project Portfolio Management System, the possible organizational and structural changes required in implementing the same, developing a plan for implementation of a Project Portfolio Management system plan and exploring tools and techniques the company can utilize.

Vaughan Construction was incorporated in 1955 and are licensed, and experienced developers of commercial, retail, residential and industrial construction and have executed projects in Sydney, Melbourne, Perth, Adelaide, Darwin, etc (, 2018).

Some of the projects executed by Vaughan Constructions are as follows

  • Bravo Apartments, Carlton, VIC
  • RICOH, East Creek, NSW.
  • Scotia Street Townhouses, North Melbourne, VIC
  • Northline, East Arm, NT
  • Coca-Cola Amatil Highbay, Northmead, NSW
  • Mernda Village Shopping Centre, Mernda, VIC

Vaughan Construction has carried out the construction of residential, commercial, industrial and retail construction all over Australia and executes several projects simultaneously which require the attention of the management along with the allocation of finance, resources, manpower, etc.

Also, the company needs to know revenues center and cost center of each project to determine the profitability of each project. In case, any particular project is incurring losses or less than desired profits, corrective actions and timely intervention is required before things spiral out of control as in projects, a delayed response can spin a project off-schedule and over-budget (Brook and Pagnanelli, 2014).

The company currently has a system wherein the finance managers coordinate with project managers on a regular basis towards the accounting of a project. This involves analysis of revenues and cash in-flows generated, estimated cash inflows shortly, expenditure on a project, budgeting of a project, etc.

The project managers also have to coordinate with the Project head of the group about project progress, project scheduling, deviations in the schedule, the requirement of technical support from management, unforeseen incidents at the site, etc.

This form of reporting often is counter-productive as on many occasion each departmental head is more concerned with their departmental goal and in lieu for their departmental goals, often overlook organizational goal of timely execution of the project and ensuring maximum revenues at minimal costing (Stettina and Horz, 2015).

Further, MIS generated to the management is on a weekly basis which is often not current and up to date due to the time lag between the receipt of data from project sites to preparation of a report, hence often many times management decision are taken on basis of stale information and data (Daniel et al., 2014).

Situation Context and Evaluation

As a result of this looking at the current project management systems at Vaughan, there is no doubt that these are outdated and need to be upgraded with modern Project Portfolio Management Method.

Implementation of a Project Portfolio Management System can offer Vaughan Constructions the following benefits.

It is crucial to ensure that a project perfectly fits into a company's strategic plans (Costantino et al., 2015). However, often project managers forego looking at the biggest picture and concentrate more on their individual project goals instead of the overall company goals which can prove counter-productive (Sanchez, 2015).

A Project Portfolio Management System ensures all project goals are in sync and in-line with the company’s strategic business objectives and goals

A Project Portfolio Management System enables generation of data and reports which can provide a more profound insight regarding a project or a group of the different project rather than individual reports pertaining individual projects, which only deals with project progress (Brook and Pagnanelli, 2014).

A Project Portfolio Management System enables management to reallocate resources between its project portfolio similar to the way resources are reallocated within a project.

A company has limited resources regarding capital, machinery, equipment, manpower, etc. When a company is working on multiple projects at a single time, idle resources at one project site can be quickly reallocated to another project site (Turner, 2014)

A Project Portfolio Management System aids the management to identify problems and issues which can arise during a project, and once a problem has been identified using portfolio analysis, it can be addressed and corrected promptly (Kaiser et al., 2015).

Every project can have its own sets of risks and when a company has a portfolio of projects, it is vital to how what are the possible risk in a company's project portfolio, how to identify these risk when they occur, how to resolve these risk and how does its occurrence impact the progress of a project. A Project Portfolio Management System enables providing answers to these issues to the management timely and accurately (Muller, 2017).

The implementation of a Project Portfolio Management System requires cultural changes within an organization as changes are required to be made in the established patterns of communications within Business Units. Also, the content of communication with different business units will require changes from an orientation of "customer service" it a "value-added" orientation.

At the beginning of the changes in an organization during the Project Portfolio Management System process, any staff members might perceive it as a business risk, as it can be viewed as having the ability to affect the continuity of business units and their service. Also, many employees, especially older ones, might be resistant to change on account of being accustomed to working and communicating in a particular method and they perceive change as a threat to their position in the company as these changes can make them redundant (Patanakul, 2015).

Hence the changes about with the introduction of Project Portfolio Management Systems required the support of the management, assigning roles and responsibilities to various members of staff to act as agents of change to encourage support and co-operation towards the new systems being implemented. This approach can enable the company to achieve the desired results and solicitate full co-operation and support from all member of staff with minimal disruption and resistance from its existing team and staff members (Muller, 2017).

  • Opportunity Life Cycle

Opportunities and Threats of Implementing a Project Portfolio Management System

The opportunity life-cycle is a set of the prescribed process which should be followed for implementations of all Project Portfolio Management System. Initiatives (McGrath et al., 2015). The opportunity life cycle provides a depiction of on-going improvements in all phases and initiatives towards implementation of a Project Portfolio Management System.

The steps different phases involved in the opportunity life cycle include

  • The Proposal Stage – It involves in the recording of business expectations, benefits a business seeks to attain, quantification of various business risk, etc. in alignment with the overall company strategy (Kerzner and Kerzner, 2017)
  • The Planning Stage - In this stage, proposals which have been approved are planned in detail towards execution. All the benefits and risks a business faces need to be evaluated
  • The Building Phase – This phase involves the execution of the project stage, wherein the progress of the project and the mitigation of risk are monitored.
  • The Run Phase – The IT service delivery is involved in stage preparing programs toward recording, sending and receiving various forms of data and communication across different channels within the company (Nicholas and Steyn, 2017).
  • Refresh – This involves a review stage wherein any issues with the new system are rectified and improved for better execution and communication.

Adaptive project management methodology is adaptive as the name suggests. In this form of project management, there is a broad scope of different projects to varying. In Adaptive Project Management Systems, the time required and cost to execute a project can remain constant while adjusting various other scopes of the project as and when the project is under execution (Walker, 2015).

Vaughan Constructions can adopt an adaptive form of project portfolio management as each project is unique and has its own set of unique requirements at each end, i.e., resources, benefits, risk, etc. Most of the time each project has its parameters, own input, and output requirement, different working conditions, etc. An Adaptive project portfolio management system will allow the business to maximize the value of each project in such a manner wherein enhancing the probability of unlocking newer ideas and opportunities at the time of development of the project (Jenner, 2016).

These involve measurement of progress of a project regarding benefits/revenues generates by a specific project against cost/expenditure involved in earning the said benefits ().

The various form of Cost/Value metrics are

  • Estimate Commercial Value
  • Portfolio value vs. Cost

It involves the concepts of allocation of budgets into a strategic bucket, and this is popular in companies which are organized by budget by product line. Some of the different types of strategic bucket budgeting include

  • Capital vs. Expense Charts
  • Effort hours and ROI

These form of tools analyze some of the most vital metrics computing the capabilities of business to focus on a strategy for providing business solutions. These vital metrics aim to assess the performance of a strategy on a continuous basis.


Project Portfolio Management is an essential management tool for companies which conduct many projects at the same time. Every project needs to generate revenues exceeding the investment/expenditure incurred in executing the project, and often companies have to allocated and prioritize the allocation of its limited resources among its various projects

However, since all projects have different requirements, benefits, risk, and impact of risk, businesses can select a suitable Project Portfolio Management technique depending upon its size, type of industry it operates in, etc.

The various factors a company should keep in mind while selecting a methodology for implementation of Project Portfolio Management are as follows:

  • Common Organisational Goals and Targets
  • Core Value of the Company
  • The Constraints faced by a Project
  • Type of Stakeholders involved in a project.
  • Size of the Project
  • Company's ability to take the risk
  • Project Cost.
  • The requirement of Flexibility.


Brook, J. W., & Pagnanelli, F. (2014). Integrating sustainability into innovation project portfolio management–A strategic perspective. Journal of Engineering and Technology Management, 34, 46-62.

Costantino, F., Di Gravio, G., & Nonino, F. (2015). Project selection in project portfolio management: An artificial neural network model based on critical success factors. International Journal of Project Management, 33(8), 1744-1754.

Daniel, E. M., Ward, J. M., & Franken, A. (2014). A dynamic capabilities perspective of IS project portfolio management. The Journal of Strategic Information Systems, 23(2), 95-111.

Jenner, S. (2016). Transforming government and public services: realizing benefits through project portfolio management. Routledge.

Kaiser, M. G., El Arbi, F., & Ahlemann, F. (2015). Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment. International Journal of Project Management, 33(1), 126-139.

Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.

McGrath, B., Hanna, J., Huang, R., & Shivdasani, A. (2015). 3D Opportunity for Life Cycle Assessments: Additive Manufacturing Branches Out.

Muller, R. (2017). Project governance. Routledge.

Nicholas, J. M., & Steyn, H. (2017). Project management for engineering, business, and technology. Routledge.

Patanakul, P. (2015). Critical attributes of effectiveness in managing the project portfolio. International Journal of Project Management, 33(5), 1084-1097.

Sánchez, M. A. (2015). Integrating sustainability issues into project management. Journal of Cleaner Production, 96, 319-330.

Stettina, C. J., & Hörz, J. (2015). Agile portfolio management: An empirical perspective on the practice in use. International Journal of Project Management, 33(1), 140-152.

Turner, J. R. (2014). Handbook of project-based management(Vol. 92). New York, NY: McGraw-hill.

Vaughan Constructions (2018). Company Overview. Retrieved on October 6th, 2018 from

Walker, A. (2015). Project management in construction. John Wiley & Sons.

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