AS-W6 Name: Yousef Al-Joudi Student ID: H00029133 Word Count=1299

Individual Project: Project Outline PPM Methodology and Its Success Criterias
At the start and before selecting the methodology needed to manage the portfolio we need to create the PMO of the SBU to help on drawing unit strategy and execution map and also determine the features of selected mythology. The characteristics of this PMO are determined by the understanding of the PMO type the SBU needs, implement the Buy in It is a project approach, getting involved in the long term, perform, document and communicate in the very beginning of the success, stay optimistic during the CALM process and know when its time to declare victory or defeatand move on. We have no problem saying, Were going to cancel this, (Harvard 2007 p.6) it is very important to know when it is a must to kill a project. (UOL 2013 pp.6-7). The selected PMO required be structuring and managing by Enterprise Program Management Approach. Kerzner (2010) indicated that EPM framework that provides a model within which projects, programs, and portfolios fit into a hierarchy where project execution and program delivery is aligned with enterprise strategy and leads to improved realization of desired benefits (Kerzner 2010 p.567)

Proposed mission and Strategy of the SBU:

Strategy: According to Rothman J. (2009) that The more tactical (actionable) your mission is, the more the mission helps you draw the boundaries of work that belongs in your group and work that doesnt belong (Rothman J. 2009 p.162) this will help your organization concentrate on what they should do and deliver. Our strategy and mission we deliver projects all the way from planning, design and commissioning. The mission and strategy should be reviewed and approved by CEO. Artto & Dietrich (2004) indicated that Andrews (1995) states it is very critical for the successful implementation of strategy is to ensure that decisions made by Top management are consistent with the organizations goals, Therefor to accomplish this we have to have an active participation from the highest level of the company management so that we can integrate our strategic objectives and align the program and projects within our proposed project portfolio.

Portfolio management: As defined by (PMBOK) Portfolio management is "The centralized management of one or more portfolios, which includes identifying, prioritizing, authorizing,

managing, and controlling projects, programs, and other related work, to achieve specific strategic business objectives."(PMI, 2008, p.9) in this level of management the strategy will be designed and projects will be evaluated and categorized as per selected criteria and within the initiated strategy through the business unit. Program management: Program management is managing many projects in Top level management concentrating on projects finance and income, in addition to execute the portfolio recommendation and instruction to lead the work towards organization strategy. Project management: In this level the focus is to execute the projects within time, budget and as per scope meeting the customers expectations.

The Projects under the New SBU

Project (A) (Engineering, Procurement & Construction EPC of New Olefins Plants): Often EPC services providers focuses on providing planning, front end engineering design (FEED), and (EPC) services, including project management, schedule and cost and quality control for petrochemical Complexes in the mid-east and Specially in Saudi Arabia due to the availability of the natural resources and the increased demands on constructing new Olefins Plants. This Project is very important because of its demands in the market and its guaranteed success. This project been rated very high priority and it should not be delayed. Project (B) (EPC of Expansion on Old Olefins Plants):This project is very important step in the development of our reputations as services providers but its difficulties on Engineering, execution and its safety issues because of dealing with life plants it has been categorized as Low priority projects. Project (C) (Long term EPC & Maintenance services for life Olefins Plants): This project is important for our reputations as services providers, even though its income constant and for very long period but it is not on the main strategy of the SBU. This project has been categorized as low priority projects. Project (D) (EPC of New Intermediates & Derivatives Plants): Often the existing companies have their own Intermediates & Derivatives Plants but it is not finically beneficial for them so the aim is to suggests to one of the major companies there to build one large plants and provide these Intermediates & Derivatives to the remaining companies to save them the cost of maintaining several small plants and be more profitable for the suggested company. This project has been rated very high priority for the SBU.

Proposed selection criteria:

Some of the key methodologies used in ranking projects within a portfolio mentioned in our weekly note (UoL 2013 p.p. 3-4). Are: 1. Economic Return: These techniques usually depend on the organization experience with similar projects. And its typically need financial estimates of investment and income movements over the time period of the project. The most common technique used in this methodology is based on calculating the net present value (NPV) of the

cash flow streams for the investments over period of time. According to the demand increase of the plastics and consumer products, the need for petrochemicals increases the investment on constructing new petrochemical complexes. 2. Real Options Theory: Real options theory it highlights the combined importance of uncertainty and managerial discretion, and it presents a dynamic view of firms investment and organizational governance decisions. The advantages of the real options first it can bridge corporate strategy and finance also it merges financial markets information into strategic thinking. 3. Portfolio Matrices: As indicated in UoL (2013) that Portfolio matrices (bubble diagrams)mostly used by companies when they plan to initiate a new product and it is used for displaying parameter values on three or four project dimensions. The evaluation by this metrics will help on prioritizing projects with portfolio strategic goals. 4. Comparative Approaches: As indicated in UoL (2013) that one of the methods Included in this classification the Analytic Hierarchy Process (AHP In these technique, first the weights of different objectives are determined, then alternatives are compared on the basis of their contributions to these objectives, and finally a set of project benefit measures is computed. This technique support decision making based on comparative scale and it provides direction in the project selection process based on its quantitative, qualitative and judgment criteria.

Potential Change Management Process and Issues

The market huge and tempting and the investment are rising. The portfolio process should be flexible and can absorb changes according to business changes. EPC services market becoming very competitive and customers becoming aware and are not the same therefor we need to perform studies on the market status and we should approach our customers by making presentations regularly. One of the main political issues here in Saudi Arabia is getting Government Issue sorted out due to their slow routine producers.

Conclusion:
After thorough review of the available projects within the new created SBU project A were found important to be implemented because of its demand on the market and high profitability. Project B is important step in the development of our reputations as services providers but because of its difficulties on Engineering, execution and safety issues due to dealing with life plants its priority been decreased. Project C is not on the business strategy track so this project been rated very low even though its income is constant and for very long period. Project D has been rated very high priority because of the following:

The opportunity of constructing different plants in different locations in Saudi Arabia which will bring more income and value for the new SBU. KBR Company has the experience and technology to construct such plants. The cost of constructing these plants less and has more return on investment compared to the olefins plants.

Reference
Artto, K. A., & Dietrich, P. H. (2004). Strategic business management through multiple projects. [On line] available at http://media.johnwiley.com.au/product_data/excerpt/54/04702268/0470226854.pdf (Accessed: 02 October 2013) KBR (2013) Corporate Information [on line] available at http://www.kbr.com/About/CompanyProfile/ (Accessed: 02 October 2013) Kerzner, H. (2010) Project management best practices: achieving global excellence. 2nd ed. Hoboken, NJ: John Wiley. Rothman J. (2009) Manage your project portfolio: increase your capacity and finish more projects. Raleigh, NC: The Pragmatic Bookshelf Harvard Management (2007) MANAGING TEAMS FOR HIGH PERFORMANCE Harvard Business School Publishing Corporation [On line] available at http://www.beingabetterleader.com/docs/managing%20teams%20for%20high%20performance%20hbr.pdf?LanguageID=EN-US(Accessed: 15 October 2013)

UOL (2013) Ranking/evaluating the portfolio and making portfolio decisionsWeek5 Lecture Notes [Online]. Available from: https://elearning.uol.ohecampus.com/bbcswebdav/pid-6351488-dt-contentrid-271395_4/institution/UKL1/MPM/SUSPPM/Wk5/SUSPPM_Wk5_WeeklyNotes.pdf (Accessed: 05 October 2013) PMI (2008) a guide to the project management body of knowledge (PMBOK Guide), 4th ed. Newtown Square, PA: Project Management Institute.