Posted: August 14th, 2022

Project Portfolio Management in Multinational Corporations

Project Portfolio Management in Multinational Corporations

Project portfolio management (PPM) is the process of selecting, prioritizing and managing multiple projects and programs that align with the strategic objectives and business goals of an organization. PPM helps organizations to optimize the use of resources, minimize risks, maximize benefits and deliver value to stakeholders. PPM is especially important for multinational corporations (MNCs) that operate in diverse and complex environments, where they face challenges such as cultural differences, regulatory compliance, market volatility, technological innovation and global competition.

In this blog post, we will discuss the benefits, challenges and best practices of PPM in MNCs, and provide some examples of successful PPM implementations in different industries.

Benefits of PPM in MNCs

PPM can provide several benefits for MNCs, such as:

– **Strategic alignment**: PPM ensures that the projects and programs in the portfolio are aligned with the vision, mission and strategy of the organization, and support its competitive advantage and value proposition. PPM also helps to communicate the strategic direction and priorities to all stakeholders, and to monitor and measure the performance and outcomes of the portfolio.
– **Resource optimization**: PPM enables MNCs to allocate and balance the resources (such as human capital, financial capital, technology, etc.) across the portfolio, based on the strategic importance, urgency and interdependencies of the projects and programs. PPM also helps to avoid resource conflicts, overallocation and underutilization, and to leverage synergies and economies of scale.
– **Risk management**: PPM allows MNCs to identify, assess and mitigate the risks associated with the portfolio, such as market uncertainty, regulatory changes, technological disruptions, cultural clashes, etc. PPM also helps to manage the dependencies and interactions among the projects and programs, and to anticipate and respond to changes and issues that may affect the portfolio.
– **Value creation**: PPM ensures that MNCs deliver value to their customers, shareholders, employees and other stakeholders through the successful execution of the projects and programs in the portfolio. PPM also helps to evaluate the benefits and costs of the portfolio, and to prioritize and select the most valuable and feasible initiatives.

Challenges of PPM in MNCs

PPM can also pose some challenges for MNCs, such as:

– **Complexity**: MNCs often have large, diverse and dynamic portfolios that span multiple regions, markets, functions and business units. Managing such portfolios requires a high level of coordination, integration and standardization across the organization, as well as a clear governance structure and decision-making process.
– **Uncertainty**: MNCs operate in volatile and uncertain environments, where they face constant changes in customer preferences, competitor actions, technological innovations, regulatory requirements, etc. These changes can affect the assumptions, objectives and outcomes of the portfolio, and require frequent adjustments and adaptations.
– **Culture**: MNCs have to deal with different cultures, values, norms and expectations among their stakeholders, both internally (such as employees,
managers, business units) and externally (such as customers,
suppliers,
partners). These cultural differences can create misunderstandings,
conflicts
and resistance
to change,
and affect
the collaboration
and communication
across
the portfolio.

Best Practices of PPM in MNCs

To overcome these challenges
and reap
the benefits
of PPM,
MNCs should follow some best practices,
such as:

– **Define a clear vision
and strategy**:
MNCs should have a clear vision
and strategy
that guide
the selection,
prioritization
and management
of their portfolios.
The vision
and strategy
should be aligned with
the organizational goals
and values,
and reflect
the customer needs,
market opportunities
and competitive advantages.
The vision
and strategy
should also be communicated
and shared
with all stakeholders,
and reviewed
and updated regularly.

– **Establish a robust governance structure**:
MNCs should have a robust governance structure that defines the roles,
responsibilities
and authority levels
of the different parties involved in PPM,
such as senior executives,
portfolio managers,
project managers,
business units,
etc. The governance structure should also specify the criteria,
methods
and tools for selecting,
prioritizing,
evaluating
and reporting on
the projects
and programs in the portfolio.

– **Use a consistent framework
and methodology**:
MNCs should use a consistent framework
and methodology for managing their portfolios,
such as PMI’s Standard for Portfolio Management or PRINCE2’s Portfolio Management Approach. The framework
and methodology should provide a common language,
terminology
and process for planning,
executing,
monitoring
and controlling
the portfolio.
The framework
and methodology should also be flexible enough to accommodate different types of projects
and programs,
and different levels of complexity
and uncertainty.

– **Leverage technology
and tools**:
MNCs should leverage technology
and tools to support their PPM processes,
such as project portfolio management software, dashboards,
analytics,
etc. Technology
and tools can help MNCs to collect,
store,
analyze
and share data and information about their portfolios,
and to facilitate communication,
collaboration
and decision-making among stakeholders.
Technology
and tools can also help MNCs to automate some tasks,
such as scheduling,
resource allocation,
risk assessment,
etc.

– **Foster a culture of learning
and innovation**:
MNCs should foster a culture of learning
and innovation that encourages creativity,
experimentation
and improvement in their portfolios.
MNCs should also promote a culture of trust,
transparency
and accountability that supports feedback,
learning
and knowledge sharing among stakeholders.
MNCs should also celebrate successes,
recognize achievements
and reward performance in their portfolios.

Examples of PPM in MNCs

Here are some examples of how MNCs have implemented PPM in different industries:

– **IBM**: IBM is a global leader in information technology and consulting services, with a portfolio of over 10,000 projects and programs worldwide. IBM uses a PPM framework called the IBM Project Management Methodology (IPMM), which is based on PMI’s standards and best practices. IPMM provides a common approach for managing projects and programs across the organization, and integrates with IBM’s business strategy, governance structure and performance management system. IBM also uses a PPM software tool called Rational Portfolio Manager (RPM), which helps to manage the portfolio data, resources, risks and benefits, and to generate reports and dashboards for stakeholders. IBM’s PPM has enabled the company to improve its project delivery, customer satisfaction, resource utilization and strategic alignment.

– **Unilever**: Unilever is a global consumer goods company, with a portfolio of over 400 brands and products in more than 190 countries. Unilever uses a PPM framework called the Unilever Project Management Framework (UPMF), which is based on PRINCE2’s principles and processes. UPMF provides a consistent and scalable approach for managing projects and programs across the organization, and aligns with Unilever’s business strategy, governance structure and sustainability goals. Unilever also uses a PPM software tool called Planview Enterprise One, which helps to manage the portfolio data, resources, costs and benefits, and to generate reports and dashboards for stakeholders. Unilever’s PPM has enabled the company to increase its innovation, efficiency, quality and profitability.

– **Shell**: Shell is a global energy company, with a portfolio of over 1,000 projects and programs in more than 70 countries. Shell uses a PPM framework called the Shell Project Delivery Framework (SPDF), which is based on PMI’s standards and best practices. SPDF provides a comprehensive and rigorous approach for managing projects and programs across the organization, and aligns with Shell’s business strategy, governance structure and risk management system. Shell also uses a PPM software tool called Primavera P6 Enterprise Project Portfolio Management (EPPM), which helps to manage the portfolio data, resources, schedules, risks and benefits, and to generate reports and dashboards for stakeholders. Shell’s PPM has enabled the company to improve its project delivery, safety, reliability and value creation.

Conclusion

PPM is a vital process for MNCs that want to achieve their strategic objectives and business goals in a complex and uncertain environment. PPM can help MNCs to optimize their resources, minimize their risks, maximize their benefits and deliver value to their stakeholders. However, PPM also poses some challenges for MNCs, such as complexity, uncertainty and culture. To overcome these challenges and reap the benefits of PPM, MNCs should follow some best practices, such as defining a clear vision and strategy, establishing a robust governance structure, using a consistent framework and methodology, leveraging technology and tools, and fostering a culture of learning and innovation.

References

– Cooper R.G., Edgett S.J., Kleinschmidt E.J., 1999. New product portfolio management: practices and performance. Journal of Product Innovation Management 16(4):333–351.
– Gartner Inc., 2021. 6 Practices for Effective Portfolio Management [online]. Available at: https://www.gartner.com/smarterwithgartner/6-step-action-plan-for-effective-portfolio-management [Accessed 17 Nov 2023].
– Levitt J., 2009. Strategic Project Portfolio Management homework help – write my masters thesis: Enabling a Productive Organization. John Wiley & Sons.
– Nieto-Rodriguez A., 2012. The Focused Organization: How Concentrating on Fewer Goals Can Lead to Greater Success. Gower Publishing Ltd.
– Project Management Institute (PMI), 2017. The Standard for Portfolio Management – Fourth Edition. PM

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