IT Project Portfolio Optimization

It is a very typical problem faced by organizations today that IT Departments have limited IT Budgets, resources and a significantly larger number of projects to execute. Additional constraints like

 Prioritizing the company's projects against a clear set of measurable and actionable objectives, while ensuring that only projects that contribute to the bottom line are being selected
 Availability of IT Resources to execute the projects
 Risk profile of projects
 Timelines for start and subsequent completion of projects
 Environmental variables like competitors’ strategies, opportunity costs, and alternatives with competing IT architectures further complicate the selection criteria of projects.

Given all these constraints within any organization, it is imperative to optimize the project selection to derive maximum value to the organization.

Patni’s Project Portfolio optimization solution explores how the project portfolio can be automatically optimized according to the various inputs involved in selection of projects according to the various constraints of budgets, time, resources, benefits, etc to maximize the value provided to the organization. It models the risk scenarios involved with various decision making criteria and enables the executive to take a rational decision based on probabilistic and quantitative approaches to project portfolio prioritization.

The need for the Holy Grail of Project Portfolio Optimization has always existed and such tools are the most sought after in the CxO’s decision-making Kit. Allowing a decision making tool to automate some of the dynamics involved in optimal project selection can enable rational and timely decisions driven to a large part by mathematical and probabilistic scenarios. The inputs into the model will be the ones typically involved in the grunt work of mathematical or probabilistic calculations with a multitude of permutations and combinations.

The mathematical and probabilistic approach with the constraints can help out with the calculations and ultimately enables the decision-maker to find the delicate balance between project prioritization as an art and a science. Simulation to predict various output scenarios based on Monte Carlo or other standard techniques primarily using risk as the driving factor helps in a large way to determine expected outcomes. The ultimate goal is to enable and incorporate sound decision-making directed towards selecting the optimal portfolio at any given point in time in an efficient, effective and timely manner.

Comments

[Armil]

Thank you for the great ideas being shared.