System Thinking In Portflio Management †Myassignmenthelp.Com

Question: Discuss About The System Thinking In Portflio Management? Answer: Introducation Systems thinking and project management, both the function have a strong relationship with each other. Both of the topics are used together for big researches in the mid 90s. After World War 2 both the processes had their separate progression but their interrelation cannot be neglected, not even today. Development of bodies like SEBOK and PMBOK, elevated the practices of system thinking, specifically system engineering. The shared concepts between system engineering and project management are life-cycle advancement of designs and concepts as well as implementations of projects and systems (Liu, Forrest and Yang 2015). With the evolution of technology system thinking and engineering have been spread from hard to soft systems like personnel and communication management, team structure and performance, communication management and others (Brandstdter, Harms and Grossschedl 2012). The complexities of any project can be understood by the managers by application of concepts of system think ing. Purpose of this essay is to understand the system thinking process and application of different tools and techniques of system thinking in project management. A project can be considered as a system since a system is purposeful factor, interrelated with different interacting constructive parts. A system runs by taking input from the environment or circumstances and by converting them into desirable outputs (Hanson 2014). The structure of a system defines its relationships and usefulness in performing specific activities. Boundary of a system can be defined as the concerns regarding the systems and these concerns or scopes are changeable along with circumstances. A project consists of activities, structures and processes. Project managers can settle down an uncontrollable project by the appropriate application of system thinking (Henry et al. 2013). The term general system management is first introduced by Ludwig von Bertalanffy, which tells that a system can be identified by the dynamic interaction between the components and its non-linearity (Kerzner 2013). A part of a system cannot be understood separately. A system approach can be descr ibed as explaining the problems from large viewpoint to analyse, synthesize, provide feedback and verify alternative approaches which can minimise the complexities (Brownsword and Setchi 2012). Approach of system thinking in project develops a definition of project management system, which an helpful organisational sub-system for superimposing a project team on the structure of an organisation. System engineering is an inter-regulatory approach consisting of successful engineering systems for deducing the solutions of problems by understanding the needs of stakeholders and by deploying useful applications like opportunity explorations, documentations of requirements and validating and verifying the complexities (Kerzner 2013). System engineering should provide a guide for the necessary information regarding the boundaries, vocabulary and structural concepts of any discipline. It should inform about the values as well as limitations of system thinking to the project managers (Gomes and Romo 2015). Incorporating a system engineering process a project can avail requirements, verifications and functions (Haimes 2015). An effective project management system incorporates work breakdown structure that is a hierarchy composed of the products and services necessary for the completion of the project. This work breakdown structure is associated with system architecture, which configur es the alignment between system engineering and project management (Nicholas and Steyn 2017). With the application of system engineering the integration of risks and risk management process in project management is inevitable (Liu, Forrest and Yang 2015). These risks can be defined as the uncertainty of an event or its result constructed by system engineering. These risks can be categorised as- strategic, financial, operational, technical and program or project risks. These risks are associated with the strategic plans and policies of an organisation, its financial base, technical and operations departments of an organisation (Henry et al. 2013). In order to achieve safety from these risks system engineering must be incorporated of a suitable set of risk management procedures. The components of this risk management procedure are planning, identification of risk factors, analysis, development of strategies for responding to the risk factors, monitor and control of risks. A larger project management plan should include sufficient resources for risk management which can give pro per information about tools and techniques, objectives and goals, responsibilities and roles of communication. Next important thing is ti identify the category of the risks (Brownsword and Setchi 2012). There are several risk factors associated with technical, cost-revenue, human resources, production, management, engineering, business threats and more. A proper identification of risk factors will allow an organisation to take appropriate measures to counter the risk. Risk analysis can be of two methods, which are qualitative and quantitative (Haimes 2015). For qualitative analysis a risk mapping matrix delivers the risk probability. Quantitative analysis comprises two techniques, Decision tree analysis and Monte Carlo analysis in order to present the measurement of risks either by using permutation possibility or by sampling randomly. Analysing the risk factors, based on the findings strategies are made to respond against risks. Generic model of development of risk response strateg y follows acceptance, avoidance, control and transfer (Hanson 2014). Finally, the risks are controlled and monitored that those risk factors do not return in the system to affect the project. The techniques for controlling risk factors are achieved value, which is technique of comparison of earned work value with work value set to perform in the scheduled time, program metrics, which is periodic analysis of the achievement of risk management plans and measurement of technical performances, which is a quantification of technicalities of a project and comparison of it with project success metrics. Concepts that strategize the decision making ability incorporating investment policies, align it with objectives and allocation of individual and organisational assets and development of risk management strategies are the structural unit of portfolio management. It is associated with strength, weakness, opportunity and threat analyses that estimate the maximum return despite of presence of risk factors (Brandstdter, Harms and Grossschedl 2012). The consolidated management that manages various procedures, techniques and technologies applied by the bodies of project management in order to analyze a project based on several key characteristics is called project portfolio management (PPM) (Heising 2012). The key objectives of this management procedure is the determination of resource combination for delivery and scheduling of activities to properly achieve the operational, technical and financial objectives of an organisation keeping the boundaries and constraints delivered by strategies, consumers and other circumstances (Martinsuo 2013). Organisational maturity model explains the selection, management and completion of projects by any organisation. The portfolio consistency of any company is dependent on the experience of that organisation (Gomes and Romo 2015). Different levels of project portfolio management are associated with organisational maturity model differently (Bourne 2016). The first level, which can be described as reactive, consists of no formal tool for project management. The directives of management are prioritized on the basis the most needed projects and the projects have definite cost estimation. New-formed organisations are the elements of this PPM (Wendler 2012). The second level, emerging discipline, consists of a project management office that provides the surety of involvement of organisational strategies to the projects. The project managers at this level follow a specific set of project management processes giving priority to the initiated projects. Level three of PPM is initial integration (Beringer, Jonas and Kock 2013). The organisations in this level utilize a program, a set of projects embedded in its project portfolio management that clearly defines roles and objectives of project manager. Project officer, PPM manager and different committees that can guide a project exist in these organisations. Layer four, which is effective integration, consists of organisations those use the knowledge gathered from organisations all around the world (Teller et al. 2012). Each project is tracked, monitored and forecasted specifically for its benefits. Project portfolio is modelled to obtain risks, rewards and investment returns. Layer five of project portfolio management, effective innovation, is the maximum level of maturity of project portfolio management where the communication is channelled through an Enterprise project management office and the scope of interest of the project changes circumstantially. Roll out rate of the PPM projects at this level is faster than that o f the lower level PPM projects (Unger, Gemnden and Aubry 2012). Project managers are given responsibilities of smaller project for achieving improved flow of projects within the enterprise and quicker success rates. Aligning project portfolio with corporate strategies and objectives ensures the focus of any organisation towards the right projects. This alignment is done in the basis of strategic goals, assumptions, operational constraints and applicable data (Beringer, Jonas and Kock 2013). These portfolio alignments provides various benefits like clients have been clearly defined about the objectives and targets of the organisation and based on that the vision develops inside the client (Heising 2012). It gives clients the idea of project values and helps them to eliminate un-aligned projects for waste reduction and proper utilization of resources. There are certain business values related with portfolio management. Allocation of resources can be improved by prioritizing work through every available department of an organisation (Bourne 2016). The portfolio incorporates both in-house equipments and outsourced works. Work scrutiny can be improved by portfolio management as it suggests that the work has to be approved by all the stakeholders. According to the concepts, any work must be opened for scrutinizing in more than one area as any work when approved in any one area, it reduces the potential for other works to be approved in that same area (Martinsuo 2013). The authorization process of any work gets sufficiently open as the information of funding of the work gets revealed. The planning process gives the permission to every individual to propose work and channels the knowledge of authorization of the work to the relevant people. Consistency of work assessment can be improved by portfolio management planning process. The comp arison of the authorized work can be evaluated on an apples to apples basis. Along with the selection of high priority works, the alignment of work is also an effect of portfolio management (Unger, Gemnden and Aubry 2012). The alignment is made on the basis of targets and objectives of the overall context of the department. Work balance can be improved also. Financial portfolio management helps to develop a balance in the usage of resources. The instruments used to ensure this balance are bonds, real estate, stocks and some others. Sometimes evaluation of the portfolio of an authorized work set some barriers in the path of the work. Portfolio management helps to overcome these barriers by categorizing the events for spending resources and provides a way to adjust the expenses and create balance in utilization of resources (Wendler 2012). The values lie further ahead. A shift of focus from cost to investment is an important effect of portfolio management. Any work will only get authorized when teh values become relative to the cost structure. This focus change is primarily observed in the areas of information technology due to the involvement of computers. The values of expenditure can be mentioned in the portfolio. Collaboration and communication can be increased through portfolio management. Good amount of communication between the functional departments and the peer departments enhances the collaboration (Nicholas and Steyn 2017). The enhanced communication between the team for portfolio management and the executives of any organisation is also required for a perfectly build portfolio management system. Lastly, a project needs to be stopped at an appropriate moment. Sometimes the financial activities like the investment on a project do not fulfil the objectives (Teller et al. 2012). This profitability diminishes an d the resources need to be saved as they can be used for another approach. These ideas can be achieved from project portfolio management. Therefore, from the above discussion, it can be said that a project can only be developed properly with the application of system engineering. Thinking every step systematically helps a project to be constructed according to the objective of the project. Project portfolio management is centralized approach of management for different organisations. In order to gain the profit from the projects and fulfil their objective every organisation must include a project portfolio management team. PPM set the business values of an organisation and affects various parts of its functions. Ultimately it selects the works those need to be authorized and the works those need to be rejected. References: Beringer, C., Jonas, D. and Kock, A., 2013. Behavior of internal stakeholders in project portfolio management and its impact on success.International Journal of Project Management,31(6), pp.830-846. Bourne, L., 2016.Stakeholder relationship management: a maturity model for organisational implementation. CRC Press. Brandstdter, K., Harms, U. and Grossschedl, J., 2012. Assessing system thinking through different concept-mapping practices.International Journal of Science Education,34(14), pp.2147-2170. Brownsword, M. and Setchi, R., 2012. A formalised approach to the management of risk: a conceptual framework and ontology.Systems approaches to knowledge management, transfer, and resource development. IGI Global, Hershey, PA, pp.263-285. Gomes, J. and Romo, M., 2015. Enhancing Organisational Maturity with Benefits Management.International Journal of Information Technology Project Management (IJITPM),6(4), pp.34-47. Haimes, Y.Y., 2015.Risk modeling, assessment, and management. John Wiley Sons. Hanson, B.G., 2014.General Systems Theory-Beginning With Wholes: Beginning with Wholes. Taylor Francis. Heising, W., 2012. The integration of ideation and project portfolio managementA key factor for sustainable success.International Journal of Project Management,30(5), pp.582-595. Henry, D., Pyster, A., Olwell, D.H., Hutchison, N., Enck, S. and Anthony, J.F., 2013. Experiences from creating the guide to the systems engineering body of knowledge (SEBoK) v. 1.0.Procedia Computer Science,16, pp.990-999. Kerzner, H., 2013.Project management: a systems approach to planning, scheduling, and controlling. John Wiley Sons. Liu, S., Forrest, J. and Yang, Y., 2015. Grey system: thinking, methods, and models with applications. InContemporary Issues in Systems Science and Engineering(pp. 153-224). New York, NY: John Wiley Sons, Inc.. Martinsuo, M., 2013. Project portfolio management in practice and in context.International Journal of Project Management,31(6), pp.794-803. Nicholas, J.M. and Steyn, H., 2017.Project management for engineering, business and technology. Taylor Francis. Teller, J., Unger, B.N., Kock, A. and Gemnden, H.G., 2012. Formalization of project portfolio management: The moderating role of project portfolio complexity.International Journal of Project Management,30(5), pp.596-607. Unger, B.N., Gemnden, H.G. and Aubry, M., 2012. The three roles of a project portfolio management office: Their impact on portfolio management execution and success.International Journal of Project Management,30(5), pp.608-620. Wendler, R., 2012. The maturity of maturity model research: A systematic mapping study.Information and software technology,54(12), pp.1317-1339.