Portfolio Management Planning Report

This report assesses the project of a healthcare organization, Apollo Hospital Enterprises, in the context of India. It outlines the threats and opportunities of the projects, key elements, proposes a portfolio model and also chooses a tool for evaluation of the project.

Portfolio Management Planning Report
Portfolio Management Planning Report
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Portfolio Management Planning Report
Table of Contents
Introduction................................................................................................................................2
Situational Context and Evaluation............................................................................................2
Opportunities and Threats..........................................................................................................3
Threats:...................................................................................................................................3
Opportunities:.........................................................................................................................3
Development of the Plan............................................................................................................4
Key elements of the plan:.......................................................................................................4
1. Allocating assets:.........................................................................................................4
2. Diversification.............................................................................................................4
3. Rebalancing.................................................................................................................5
4. Change control.............................................................................................................5
Proposed model (Passive Portfolio management)..................................................................5
Portfolio planning implementation.........................................................................................6
Tools and Techniques................................................................................................................7
Available tools........................................................................................................................7
Chosen tools...........................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10
Appendix..................................................................................................................................12
Appendix 1: Threat and opportunities of the project............................................................12
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Portfolio Management Planning Report
Introduction
Portfolio management is the use or allocation of resources within a given limit of an
organization. When an organization has monetary scarcity, it is obvious that they will lack the
capacity of appointing people for completing the work. Portfolio management ensures the
management of limited resources against unlimited demands through the processes of
evaluation, selection, prioritizing, balancing. This article assesses the project of a healthcare
organization, Apollo Hospital Enterprises, in the context of India.
Situational Context and Evaluation
Apollo Hospital, founded by Dr. Pratap C Reddy is the first healthcare organization India that
has earned the honour of international healthcare accreditation. This organization is renowned
for its leadership in medical innovation, quality clinical services, and pioneering medical
research. This integrated healthcare group has offered India 54 hospitals, 1200 pharmacies,
100 diagnostic centers, 11 nursing colleges, health insurance services along with Stem
research and genetic research (services, 2019). The company vision is developing the
healthcare that can create an impact on billion lives, while the mission reflects to create
international standard healthcare within the reach of people ("Vision & Mission - Apollo
Hospitals", 2019).
Apollo is concerned with its customer value and this project targeted the digitally connected
customers of India. After the success of the Telemedicine project, Apollo takes the initiative,
named as ‘Ask Apollo’, giving digital assistance to the patients remotely. Apollo also
partnered with Jio to launch a wellbeing platform, as a part of their CSR journey. As Jio
enhances the wellbeing through technology, Apollo supports it with individualized healthcare
information. The organization has consolidated its assets to provide medical service through
interactive media. This service offers a direct patient to doctor consultation from anywhere at
any time to their convenience or booking of an appointment and pharmacy services. Apollo
has capital of 1,000 Cr or 10 million for this project, though it needs 750 Cr to reduce the
debt level and increase the assets ("Apollo Hospitals launches Ask Apollo - a first of its kind
medical platform in the country for remote patient care", 2019). The project has the
potentiality of engaging the tech-savvy consumers with the brand but it lacks the project
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Portfolio Management Planning Report
focus. The project focus should be on the high-quality performance and effectiveness of
digitalization through the delivery system.
Opportunities and Threats
Threats:
 Decentralization: The paper observes the threats related to the decentralized
governing structure of digitalized service. IT investment leads to decentralized
decision making which eliminates previously defined standard while adopting
autonomous decision making (Furda & Gregus, 2017). As Apollo runs an integrated
operating system, the decentralized structure of the IT model will complicate the
process of integration.
 Legacy hardware: Also, the study identifies the risk of Legacy hardware. Legacy
hardware refers to the old or outdated computer system of the hospitals which prevent
the IT experts to keep compatibility with the advanced software systems.
 E-prescribing: Electronic prescribing can create a lot of ethical issues like sharing of
patient's data without the individual's consent.
 Financial risk: The project planning may increase the risk of financial resources and
debt of the organization in a rush of estimating budget during the planning process. If
the plan does not include a sufficient budget for contingency plans, it will bring
unanticipated costs in the execution time and affect the financial performance of the
company.
Opportunities:
 Scalability: The Ask Apollo project introduces the Opportunity of high scalability
which leads to the rapid growth of the organization. Through the digital
advertisement, the organization can easily access more customer base.
 Patient flow management: The digital service of Apollo facilitates patient flow. The
digital appoint can save the time of the patient waiting in a long queue, in hospitals
outdoor. The patients are aware of their reserved slot for consultation and also
telephonic appointment reduces the time of patient flow.
 Global trend: The digital platform consumption in a community determines the
success of digital e-health services like Ask Apollo. As this allows unprecedented
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Portfolio Management Planning Report
access to personalized healthcare services, the company can expand its market growth
without investing in a physical clinic or warehousing cost. The e-healthcare is a global
trend which indicates global market expansion, a strategic vision of the company.
 Diversification: Through the introduction of the Ask Apollo project, the organization
can diversify to grow its business. It will increase the various options of services and
gain an advantage over the competitors. Also, it can minimize the financial risk
derived from the industry downturn.
 Zero competitors: Another opportunity for this project planning is the lack of
potential competitors in this particular service. Apollo is the first company in India
that is going to arrange an electronic healthcare service.
Development of the Plan
Key elements of the plan:
1. Allocating assets:
The key elements of this portfolio management are allocating asset mix against the
identified risk tolerance. The asset allocation is determined by the risk-return profile
of the investors. The risk return principle suggests the number of returns received by
the company or the investors by investing against a risk. Gutiérrez & Magnusson
(2014) says the return is proportional to the risk. Apollo divides the $247 billion
assets for different categories like over $100 billion in permanent capital vehicles,
$165 billion in largest alternative credit platform and $25 billion in largest private
equity fund ever raised.
2. Diversification
When investing cannot assure the return and loss of a particular class, diversification
can capture return from the entire sectors with less uncertainty (Rose, 2013). It is a
‘risk-management’ strategy that involves a wide variety of investments within a
particular class of business. The justification of this strategy is to reduce the risk of
any specific holding. It is a strategy of balancing against the risk. Apollo allocates
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Portfolio Management Planning Report
investments in hospital construction, arranging beds, purchasing equipment which can
create risk of ROI as the changing market demands or industry downturn. This study
introduces electronic healthcare assistance, a new project of Apollo which diversifies
the healthcare industry into e-commerce sector. The traditional sector can see
downfall due to market forces, like substitution, new entrants or buying power of
consumers and suppliers. In this circumstance, the diversification can save the
company’s income.
3. Rebalancing
Rebalancing is also a risk management strategy which protects investors from
unpredicted risks or it limits the risks within managerial expertise. This step is used in
the time of annual intervals while the investors restoring the portfolio to its original
target allocation (Willenbrock, 2010). For example, Apollo invests Rs. 10000 in the
fund for sub-project telemedicine and also Rs. 10000 for 24x7 hours e-health
assistance service. At the end of the year, the investment accumulates into Rs. 20000
and produces a dividend of Rs. Rs. 350000. The performance of both the firms may
not be in equal level because of the different market forces. As a result, when one
fund gives a return of 250000 at the end of the year, the other fund gives a return of
100000. In this circumstance, rebalancing is important for long term performance as it
can save the company from a downturn caused by the uncertainty of the dominant
fund.
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Portfolio Management Planning Report
january, 2015 December,
2015 january, 2016
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50000
100000
150000
200000
250000
300000
350000
400000
Telemedicine
24x7 hours e-assitance
return
Figure 1: Asset Allocating, Diversification and Rebalancing
Source: Created by the author
4. Change control
This key aspect refers to the new requirements, features, regulatory demands and
technological change of the project. Project Portfolio Management or PPM sends the
change request from a centralized location and also it has the availability of resources
to respond to the changes.
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Allocating
assets
Risk-return
managment
Diversification Rebalancing
ROI = Return
on Investment Change control

Portfolio Management Planning Report
Figure 2 : Key elements of portfolio planning
Source: (created by the author)
Proposed model (Passive Portfolio management)
The researcher has chosen Passive portfolio management for the current project of Apollo
which is called as index fund management. This model outlines a portfolio development
which is directed to track the returns of a specific market index or nearer to the benchmark
(Bannier, Heyden & Tillmann, 2018). It does not involve the decision making of human
managers. The managers set the list of securities on an index and apply the same
measurement. The aim of choosing this portfolio is to generate the desired return guided by
the predefined index. In contrast, the Active management model outlines the use of a human
element or an individual or a team of managers who actively manage the funds. These
managers make financial decisions based on market research, analysis, forecasts and human
judgment (Hallerbach & Pouchkarev, 2015). The experience of a manager is also an
influential factor of this type of management. Though active portfolio management model
assures better returns determined by the market, there is a risk of human fallacy. Apart from
this, the managers have the interest to beat the market which brings additional market risks.
Portfolio planning implementation
Portfolio management involves interlinked projects and programmes which work through a
continuous cycling process. It does not have any particular starting or ending like the
programmes and the projects. This cycle evaluates the strategy in a fixed timeline. The
planning processes of the portfolio are defined in Figure 3, ‘The portfolio life cycles'. The
portfolio lifecycle is parallel as all aspects are undertaken at the sometimes while some phase
is dominants at a particular point.
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Portfolio Management Planning Report
Figure 3 : The Portfolio life cycles
(Sources: Created by the author)
Initiation
This stage represents the starting point when the host organization, Apollo decides to develop
a portfolio by creating infrastructure to operate the portfolio cycle. The four major elements
in portfolio lifecycles are:
1. Definition
The project planning may change to meet the strategic objectives of the company and
objectives of the portfolio which are assessed in the selection process for increasing
the efficiency and feasibility of the portfolio (Bible & Bivins, 2012).
2. Categorisation
The projects are categorized into subdivisions, called sub-portfolios. These sub-
portfolios share the same types of characteristics and this helps in aligning with
specific strategic objectives (Pfau, 2011).
3. Prioritisation
The study sets priorities based on Return on investment (ROI), strategic objectives or
other index metrics. As the study finds the organization lacks adequate resources to
accomplish every desired objective, the prioritisation process picks out the most
important deliverables.
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categorisatonPrioritisatonBalancingDefinition
Initiation Strategic goals
Project
Delivery

Portfolio Management Planning Report
4. Balancing
The prioritised elements are arranged into a mix to increase the potentiality of
supporting and achieving strategic objectives.
Tools and Techniques
Available tools
The available tools and techniques are:
1. Monte Carlo Simulation
This tool represents risk analytic software which is based on probability distributions
(Chouraqui, Lécot & Djebbar, 2017). This tool helps to determine the cost and
benefits of the project by assessing the probability occurrence of each factor against
its associated risk value.
2. Decision Tree analysts
This tool represents multiple decisions along with difference chances of
consequences. Graphically it is displayed through a tree. The graphics involve the
decision of investments and outcomes (Dalcher, 2014). It contains multiple
unpredicted outcomes which have potentiality and can be used for experimental.
Assimilating the total number of positive, negative and neutral outcomes, the ppm
evaluates the feasibility of the project based on the ratio of positives and negatives.
3. Cost-Benefit Analysis
This tool is useful for determining the value of the intangibles in a project. It analyses
the strength and weaknesses of alternatives and based on the analysis it provides
options for achieving the best benefits.
4. Scoring model
This tool gives a rating on the project predefined by a numeric scale, between 1 and
10. This tool suggests ‘project attractiveness score’ by giving scores to different
categories which are used for prioritization (Vecer, 2019). Under this tool, 1-4 scoring
denotes low value, 5-7 denotes medium value and 8-10 denotes high value.
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Portfolio Management Planning Report
Chosen tools
The current study chooses the ‘scoring model' as it gives quantifiable results of each
requirement based on the current capabilities. As this tool helps to prioritize the
project requirements that deliver the most valuable outcome, it will be most helpful
tool for the PPM of Apollo. The main aim of project Portfolio management is to
maximize the organizational value delivery which can be met by this tool
(Washington, 2019).
The study recommends three categories of current projects:
1. Strategic criteria –
This category measures the strategic alignment by giving scores.
2. Financial criteria-
This category measures the financial benefits such as ROI.
3. Risk criteria
This criterion measures the riskiness of the factors.
Conclusion
This Portfolio management shows the four major sequential phases of activities incorporated
in Portfolio life cycle. Portfolio management helps an organization to meet the desired value
of shareholders through simplifying the strategic vision and aligning the execution of tasks.
The study outlines the threats and opportunities of the projects, outlines the key elements,
proposes a portfolio model and also chooses a tool for evaluation of the project.
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Portfolio Management Planning Report
References
Apollo Hospitals launches Ask Apollo - a first of its kind medical platform in the country for
remote patient care. (2019). Retrieved 1 October 2019, from
https://www.apollohospitals.com/news/apollo-hospitals-launches-ask-apollo-a-first-of-its-
kind-medical-platform
Bannier, C., Heyden, T., & Tillmann, P. (2018). Rating Changes and Portfolio Flows:
Evidence from Active and Passive Funds. SSRN Electronic Journal. doi:
10.2139/ssrn.3212563
Bible, M., & Bivins, S. (2012). Evaluating strategic project and portfolio
performance. Journal Of Project, Program & Portfolio Management, 3(1), 10. doi:
10.5130/pppm.v3i1.2525
Chouraqui, A., Lécot, C., & Djebbar, B. (2017). Quasi-Monte Carlo simulation of differential
equations. Monte Carlo Methods And Applications, 23(4). doi: 10.1515/mcma-2017-0114
Dalcher, D. (2014). Mastering IT Project Management: Best Practices, Tools and
Techniques. Project Management Journal, 45(3), e2-e2. doi: 10.1002/pmj.21414
Furda, R., & Gregus, M. (2017). Conceptual View on Healthcare Digitalization. International
Journal Of Big Data And Analytics In Healthcare, 2(1), 35-54. doi:
10.4018/ijbdah.2017010103
Gutiérrez, E., & Magnusson, M. (2014). Dealing with legitimacy: A key challenge for Project
Portfolio Management decision makers. International Journal Of Project
Management, 32(1), 30-39. doi: 10.1016/j.ijproman.2013.01.002
Hallerbach, W., & Pouchkarev, I. (2015). Active Portfolio Management with Conditional
Tracking Error. SSRN Electronic Journal. doi: 10.2139/ssrn.2585914
Pfau, W. (2011). The Portfolio Size Effect and Lifecycle Asset Allocation Funds:A Different
Perspective. The Journal Of Portfolio Management, 110324004226043. doi:
10.3905/jpm.2011.2011.1.013
Rose, K. (2013). Book Review: Project Portfolios in Dynamic Environments: Organizing for
Uncertainty. Project Management Journal, 44(2), 98-98. doi: 10.1002/pmj.21331
services, V. (2019). Value added services | Ask Apollo & ApoKos - Apollo Hospitals.
Retrieved 1 October 2019, from https://www.apollohospitals.com/patient-care/value-added-
services
Vecer, J. (2019). Dynamic Scoring: Probabilistic Model Selection Based on Utility
Maximization. Entropy, 21(1), 36. doi: 10.3390/e21010036
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Vision & Mission - Apollo Hospitals. (2019). Retrieved 1 October 2019, from
https://bangalore.apollohospitals.com/bannerghattaroad/about-us/company-overview/vision-
mission/
Washington, T. (2019). A Guide to Building a Project Prioritization Scoring Model -
ppmexecution.com. Retrieved 1 October 2019, from https://ppmexecution.com/how-to-build-
a-prioritization-scoring-model/
Willenbrock, S. (2010). Diversification Return, Portfolio Rebalancing, and the Commodity
Return Puzzle. SSRN Electronic Journal. doi: 10.2139/ssrn.1898864
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Appendix
Appendix 1: Threat and opportunities of the project
Threats 1) autonomy caused by Decentralized
governing structure
2) Compatibility risk caused by Legacy
hardware
3) ethical implication of electronic
prescribing
4) risk related to financial resource
Opportunities 1) High scalability
2) Well managed patient flow in centre
3) Aligning with the global trend or
indication of market expansion.
4) Diversification of business
5) Lack of potential competitors
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