Portfolio management is different from project management in that it encompasses the entire life cycle - from ideation through the realisation of the benefits it set out to provide. Portfolio management includes project management as a phase of the project life cycle which focuses on, and is best at, the execution phase of a project. However, projects are more than just tasks and issue solving. Projects truly begin at the ideation stage and although some do not make it through execution to the realisation of benefits of the investment, portfolio management accounts for that entire process. Portfolio management is important in business because there are factors to consider that affect the success of the project, and thus the organisation, as well as unexpected benefits from the investment. For example, sometimes it is what a project management office (PMO) chooses not to do that is the most important. By prioritising and consciously choosing not to undertake projects that do not benefit the business or take away from time and resource capacity from higher priority projects, PMOs become more efficient and are better able to focus on the projects that matter. This focus results in better and faster execution or project management.

Many projects also begin by supporting overall business goals and for one reason or another, by the end they no longer serve that value. Either the business goals have changed, more important things have come up, new technology has come out that changes the project (this especially happens in product development projects), or the project has simply lost value because the main stakeholder is no longer a stakeholder. For any of these reasons or others, projects often change direction, and organisations need to adapt along the way. By managing projects as part of a portfolio, the dynamic changes because you enable the portfolio to be successful - even if some of the projects in it fall short - and help drive the desired outcome for your organisation. RockFlow Pty Ltd is a South African business specialising in residential and commercial construction projects. Its name is descriptive of the solid foundation of good business principles and processes, as it was created 30 years ago, whilst the fluid nature of its operations is identified in the second part of its name. The company has been applying project management principles, knowledge, tools and techniques since its inception. The Board adopted the business management by portfolio approach recently and expects the company to continue growing and expanding in the construction industry to ultimately become an industry leader in the region. It is against this background that RockFlow Pty Ltd contracted you to share your knowledge and experience in project, programme and portfolio management with the company. Some of your contractual responsibilities are to advise the management and staff of RockFlow Pty Ltd on the successful implementation of project and programme management in the company.

Question

You are concerned that the project staff at RockFlow Pty Ltd will not be able to deliver on the required estimates for the company's programmes and projects. Clarify what the concept estimation is by highlighting the requirements for estimation, and elaborate on the characteristics of data for estimations in the company.

Answer rating: 100% (QA)

Estimation is the process of predicting or approximating the resources time and costs required to complete a project or a specific task within a project It is an essential aspect of project management ... View the full answer