A GUIDE TO
EFFECTIVE
PROJECT SELECTION
&
PORTFOLIO
MANAGEMENT
AR 543 BABY JEAN ALBERTO | STRIELAMIA ALMAZAN | ANN ATOY
Specialization 3
GROUP 2
Introduction to Strategic Management & Project Selection
WHAT IS STRATEGIC MANAGEMENT?
Definition: Strategic management is the ongoing planning,
monitoring, analysis, and assessment of all necessities an
organization needs to meet its goals.
Why it Matters: Helps align projects with business objectives,
ensuring long-term success.
Key Components: Goal setting, analysis, strategy formulation,
strategy implementation, and monitoring.
2
Introduction to Strategic Management & Project Selection
PROJECT SELECTION IN STRATEGIC
MANAGEMENT
Why Selecting the Right Project is Crucial?
1. Ensures alignment with strategic goals.
2. Optimizes resource allocation.
3. Increases overall business competitiveness.
3
Introduction to Strategic Management & Project Selection
PROJECT SELECTION IN STRATEGIC
MANAGEMENT
Factors Influencing Selection:
Organizational goals
Financial return
Market demand
Risk assessment
3
Introduction to Strategic Management & Project Selection
METHODS OF PROJECT SELECTION
Feasibility Study
Determines project viability based on technical,
economic, and legal factors.
Cost-Benefit Analysis:
Compares expected benefits versus costs.
Strategic Fit:
Ensures projects align with the company's vision and
mission.
4
Introduction to Strategic Management & Project Selection
Strategic management and project selection are
fundamental to achieving long-term organizational success. By
aligning project choices with strategic objectives,
organizations can maximize efficiency, minimize risks, and
ensure sustained growth in an increasingly competitive
environment.
Implementing structured project selection methodologies
enhances decision-making and contributes to overall business
excellence.
5
Project Management Maturity & Selection Models
WHAT IS PROJECT MANAGEMENT MATURITY
(PMM)?
Measures the ability of an organization to
effectively manage projects based on
standardized processes, best practices, and
continuous improvement. It is measured through
different maturity models, which assess how well an
organization applies project management principles,
tools, and methodologies.
6
Project Management Maturity & Selection Models
WHAT IS PROJECT MANAGEMENT MATURITY
(PMM)?
Project Management Maturity Models (PMMM):
Initial (ad-hoc project management) Quantitatively Managed (measured and
Level No formal project Level controlled)
1 management processes 4
Project management is institutionalized.
Managed (Basic Processes) Level Optimized (continuous improvement)
Level
2 Some processes exist but are 5 Project management is fully integrated and
not standardized optimized.
Defined (Standardized Processes)
Level
3 Project management is
institutionalized.
6
Project Management Maturity & Selection Models
PROJECT SELECTION MODELS
structured approaches used by organizations to evaluate and prioritize projects based on
strategic goals, financial viability, and resource availability. These models help ensure
that selected projects provide the most value and align with business objectives.
NUMERIC MODELS (Quantitative) NON-NUMERIC MODELS (Qualitative)
These models use mathematical and financial These models focus on subjective factors
analysis to determine a project's viability (ROI, rather than financial metrics (scoring models,
NPV, IRR). checklists).
7
Project Management Maturity & Selection Models
PROJECT SELECTION MODELS
NUMERIC MODELS (Quantitative) NON-NUMERIC MODELS (Qualitative)
These models use mathematical and financial analysis to These models focus on subjective factors rather than
determine a project's viability (ROI, NPV, IRR). financial metrics (scoring models, checklists).
Payback Period – Measures how long it Sacred Cow – A project is selected based
takes to recover the initial investment. on the personal interest of senior
Shorter payback periods are preferred. management, regardless of its feasibility.
Net Present Value (NPV) – Calculates the Operating Necessity – A project is chosen
present value of future cash flows, helping because it is essential to business
determine profitability. A positive NPV operations (e.g., regulatory compliance).
means the project is worth investing in.
Internal Rate of Return (IRR) – The Competitive Necessity – The project is
discount rate at which the NPV of a project required to remain competitive in the
becomes zero. Higher IRR values indicate industry (e.g., launching a new product to
better profitability. compete with rivals).
Benefit-Cost Ratio (BCR) – Compares the Sustainability & Environmental
benefits of a project to its costs (BCR > 1 Considerations – Projects are selected
means the project is viable). based on their environmental and social
impact. 7
Project Portfolio Management (PPM) & Business Proposal
WHAT IS PROJECT PORTFOLIO MANAGEMENT
(PPM)?
Definition: The centralized management of multiple projects to achieve strategic
objectives.
Key Aspects:
Project Prioritization
Risk & Resource Management
Strategic Alignment
8
Project Portfolio Management (PPM) & Business Proposal
BENEFITS OF PROJECT PORTFOLIO
MANAGEMENT
Enhanced Decision- Reduced Risks
Making
Facilitates data-driven Identifies and mitigates potential
selection of projects. project failures early.
Optimized Resource Better Strategic
Allocation Alignment
Ensures efficient use of manpower, Ensures projects contribute to
time, and budget. long-term business goals.
9
Project Portfolio Management (PPM) & Business Proposal
BUSINESS PROJECT PROPOSAL –
THE TECHNICAL APPROACH
Definition: A formal document detailing a project's technical aspects,
feasibility, and execution plan.
Executive Summary: Overview of project purpose and goals.
Key Components:
Project Objectives: Clear, measurable targets.
Technical Feasibility: Evaluates the practicality of project execution.
Budget & Timeline: Estimates costs and project duration.
Risk Assessment: Identifies potential challenges and mitigation strategies.
10
Project Portfolio Management (PPM) & Business Proposal
BUSINESS PROJECT PROPOSAL –
THE TECHNICAL APPROACH
Definition: A formal document detailing a project's technical aspects,
feasibility, and execution plan. This section ensures that the proposed PPM
system aligns with organizational goals, optimizes resource allocation, and
enhances decision-making.
Key Components of Technical Proposal
Executive Summary: Overview of project purpose and goals.
Project Objectives: Clear, measurable targets.
Technical Feasibility: Evaluates the practicality of project execution.
Budget & Timeline: Estimates costs and project duration.
Risk Assessment: Identifies potential challenges and mitigation strategies.
10
Project Portfolio Management (PPM) & Business Proposal
SAMPLE BUSINESS PROPOSAL
PROPOSAL FOR A GREEN ARCHITECTURE INITIATIVE.
Project Overview: Development of an eco-friendly community space.
Project Objectives: Provide affordable and sustainable housing. Reduce
environmental impact through energy-efficient solutions.
Technical Feasibility: Use of renewable energy sources (solar panels, wind
turbines). Smart water management and waste recycling systems.
Budget & Timeline
Estimated Cost: ₱80 million
Duration: 24 months
Funding Sources: Government grants, private investors, green financing options
Risk & Feasibility Study: Evaluation of environmental impact and financial
feasibility.
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SUMMARY OF KEY
POINTS
Strategic Management & Project Selection: Helps align projects
with business goals.
Project Maturity & Selection Models: Provides frameworks for
better decision-making.
Project Portfolio Management & Business Proposal: Ensures
proper project execution and documentation.
12
THANK YOU
FOR LISTENING
AR 543
Specialization 3 BABY JEAN ALBERTO | STRIELAMIA ALMAZAN | ANN ATOY