Vertical and horizontal integration factors are reflected in the analysis, selection, and scheduling of projects and portfolio integration. Programs or product lines are "chunks" of business development that will help define a portfolio of projects to improve business performance. Once these programs are identified, we can identify, say, five projects in each program as candidate projects to implement. In effect, you might be choosing three projects from a series of 15 projects for implementation.
We use a variety of program management tools in selecting the three projects that will be planned and scheduled in detail. These tools include
1. Cash flow analysis. This tool requires you to forecast the first 5+ years of cash flow for each project. Costs will come from a budget built up from a preliminary task list and schedule for the project, while revenues will come from your assessment of how the project deliverable or product will generate income or "value." Remember that a cash flow estimate can be identified for a project that does not produce a marketable product but adds value to the program portfolio. Simply allocate a dollar value each year to the benefits of the project to a user or customer in order to estimate the cash flow equivalent to the stream of project benefits.
2. Net present value (NPV). This tool requires you to take the cash flow analysis you have prepared and calculate the net present value of each so that you can compare all the projects regardless of how many years their cash flow is projected.
3. Risk assessment and management. This tool requires you to identify the high-level risks in each project and prepare a risk matrix, including task, task risk description, impact, probability, severity, and contingency plans.
4. Weighted scoring model. This tool allows you to score each project against the various strategic objectives of your company, to place weights on each strategic objective and multiply the scores by the weights to get a "weighted" score for each project.
Once you have performed this analysis for each project, you will be using the results to rank the projects in each program and to select three projects for detailed scheduling and budgeting using Microsoft Project. The selected projects may not be the ones most highly ranked in your rank ordered listing, but they will be the three projects that must be implemented first, to enable the remaining projects to be implemented to integrate the program and business strategic objectives.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.