Project Portfolio Management of CPB Contractors

This paper aims at discussing the project portfolio management of CPB Contractors, including opportunities, threats, and strategies for improvement. It also explores various project portfolio models and tools.

Running head: PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
Project Portfolio Management of CPB Contractors
Name of the Student
Name of the University
Author Note

1PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
Executive summary
This paper aims at discussing the project portfolio management. The opportunities
and threats it provides in a business organization. The selected company for this paper is CPB
Contractors. This paper will also talk about the project portfolio management followed by the
company and its required improvements in order to gain benefits. The various models and
tools of project portfolio management are also discussed. This will give an idea of CPB
Contractor’s position in the market and the possible changes required by introducing project
portfolio management effectively. .

2PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................4
Situational context and evaluation.........................................................................................4
Project size and needs........................................................................................................4
Scope for improvement......................................................................................................4
Sustainability criteria.........................................................................................................5
Economic efficiency and environmental performance......................................................5
Opportunities and threats...................................................................................................6
Development of the Plan....................................................................................................8
Implementation of project portfolio management..............................................................8
Project portfolio models.....................................................................................................9
Tools and techniques........................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

3PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
Introduction
Project portfolio management is the process, the project managers use in order to
analyze the possible return on doing a project (www.cpbcon.com, 2019). Project portfolio
management provides a better idea to the managers and the organization (www.cpbcon.com,
2019). CPB Contractors is an Australian company for construction belonging to the CIMIC
Group (www.cpbcon.com, 2019). The company operates in Australia, New Zealand, India,
Asia and Papua New Guinea.CPB Contractors provides services for constructing roads, ports,
rail, building, health, gas projects, tunneling and defense (www.cpbcon.com, 2019). The
company is also doing the construction of marine and port, which also includes export
facilities of bulk materials. The principles of work include accountability, integrity,
innovation and delivery. This paper will also discuss about the project portfolio of CPB
Contractors and the new strategies to be implemented in order to grow their business with
special focus on the construction of roads from Devil Pulpit to Richmond River and up
gradation of Pacific Highway in New South Wales. The construction is expected to generate
revenue of approximately 365 million dollar. The project will construct a 34km Pacific
highway connecting the Maclean to Devils Pulpit area to the south and Richmond River to
Ballina Bypass area in the north. The company to avoid disruption will use various traffic
management strategies. The project is expected to be completed by the end of 2020.

4PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
Discussion
Situational context and evaluation
Project size and needs
Project portfolio management has four basic points for strengthening the position of
their products in the market. New guidelines are adopted and the CPB contractors to increase
their brand value in the market adopt new marketing techniques. The techniques for
marketing the products should be balanced according to the stature of the company. The
strategies should be aligned based on the market priority. Research and development plays a
major part in identifying the market needs, which the company utilizes efficiently. The
multiple methods are nowadays identified that help in determining the market needs. Given
the size of the company and project needs, CPB Contractors are likely to view the
introduction of portfolio management in a positive way that will be beneficial for the
company’s growth.
Scope for improvement
The CPB Contractors uses various techniques that are helpful in providing better
prospects in the market. The decision the company is making is based on a collaborative
effort that is resulting in good product development. The decision-making is done by
consulting all the stakeholders in the company, which leads to favorable environment for the
growth of the company. The factors that lead to risk prone investments are also reduced and
the scope of resources is increased. The value provided to the stakeholders in the decision-
making process gives them an authority in progress of the company. This strengthens their
position in the company (www.cpbcon.com, 2019). All these factors collaborate to give the
company constant success in the projects and attain a stable market position.

5PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
Sustainability criteria
Decision-making is an important tool in the areas related to portfolio management.
CPBC can use this tool as a tool to enhance the growth of the company. The evaluation of
projects and proper survey techniques help in improving the market position of the company
and identifying all the areas where the company should envisage the focus. The company
should begin with two procedures one is to initially identify the sources and then comes the
filtering part. A keyword based network is followed to enhance the decision making process.
Portfolio Management is a vital tool used by CPBC to manage the projects it is working on.
Portfolio management helps to decrease the competition in the market by applying the
concept of social equity (Influence of Portfolio Management in Decision-Making, 2018).
This technique of using social equity and decision-making helps the company to optimize the
timing and costing of the product.
Economic efficiency and environmental performance
The cost efficiency due to the environmental factors plays an important in portfolio
management. The investing parties are often concerned about the external costing of the
project, which plays an important factor in the growth of the CPBC. The investors all over the
world lay stress on the financial factor while they are investing in the foreign areas. Using the
technique of portfolio management can reduce the threats related to the environment. The
investments keeping in mind the environmental factor leads to the success and sustenance of
the projects. The pressure from the government and the stakeholders to adopt various
practices are rapidly increasing. Thus, the importance of adopting environmental
sustainability is noted. Change in the climate and excess pollution affects the construction
projects. Although it is poorly studied, integrating social and environmental sustainability
has become essentially important. Environmentally sustainable organizations reap more

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benefits like increased share of the market, improved reputation of the company, increased
capacity of innovation and increase in exports (Rajablu et al., 2015).
Opportunities and threats
There are scope of opportunities and threats in introducing new strategies and project
portfolio in CPB Contractors in order to achieve the sustainability goals of the company. The
opportunities are-
 Include a structured process to assess and analyze the portfolio of the company. A
structured and systematic process also helps the company to attain the strategic goals.
 Analyze the risk of the programs and projects undertaken.
 To find out the strategies to maximize the chances of achieving the goals of the
company and minimizing the threats.
 Justifying the activities, the events and the circumstances that can impact the
portfolio adversely. Thus calculated measures to be taken in order to avoid chaos in
the organization.
 Allocation of resources becomes easier in projects where over or under-allocation of
resources takes place (Beckers et al., 2013).
The challenges involved in introducing project portfolio management are-
 Market risk is the most critical risk of introducing portfolio management in CPB
Contractors. In market risks, the portfolio of the company will be influenced by the
activities occurring in the market as a whole.
 Business risk is a threat to the holdings of an investor. This risk become prominent
when there is incompetence in the business management (Deventer, Imai & Mesler,

7PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
2013). Another threat to the company would be the sovereign risk. It occurs if there is
environmental change in the business. The changes can be in rules and norms of the
company.
 Liquidity risk takes place when the investor wants to liquefy the business without a
potential buyer. Thus, the act of liquefying the organization is threatening for the
company (Drehmann & Nikolaou, 2013).
 Risk of interest is due to the central banks managing the country’s economy. Thus, the
central banks occupy an important place in the economic structure of the country
(Sims, 2016). It provides financial assistance to the business organizations and
provides them with financial adequacy, asset management and security from market
risks (Imbierowicz & Rauch, 2014).
 Inflation risk can also threaten the company as the purchasing power of the company
reduces significantly (Deventer, Imai & Mesler, 2013).
 It affects the flow of cash into the business organization. Inflation risk is also termed
as purchasing power risk and is related to the investments in the organization. The
risk involving the flow of cash minimizes the changes in power of purchasing.
These challenges can be overcome by using suitable strategies. Firstly, by changing
the legal landscape. Secondly, changes in the technology and regulations will help
CPB Contractors to overcome the risks. Thirdly, more complacency in the business
will make the business susceptible to external risks. Fourthly, persistent innovation
will reduce its competition. Fifthly, using the correct tools and techniques in order to
overcome the challenges is important.
Development of the Plan
The strategic goals of the company depend on the planning and implementing of the
strategies at the correct time. Developing a corporate strategic ideas will help the company to

8PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
allocate resources at the correct time. External factors like economy, availability of skilled
workers, competition and sub contractors affect the corporate strategy. Strategic plan will
help to identify these factors and develop a way to deal with these challenges. Monitoring
elements of a strategic plan includes staying on manufacturing routine, shipping products in
different distribution points. It will also help in evaluating the results in order to improve the
plans.
Implementation of project portfolio management
 Focus on strategic implementation – Considerable interests have developed in
processes managing multiple projects. After reviewing the processes it is found that
the absence of the implementation of the strategic plan that focuses on the portfolio
creates a gap between the planning and the implementation which impacts the
strategic goals (Alkhafaji & Nelson, 2013).
 Top-down understanding- The new strategies must be converted into a portfolio of
programs and projects. Thus, strategic guidelines should exist in order to
communicate the strategic plan in the organization. Otherwise, the new strategic ideas
become indefinite because of various conflicting elucidation in different levels.
 Organizational focal point – Vertical implementation should be followed (Chong &
Preece, 2014).
 Alignment across functions- The resources should be utilized correctly in order to
make the correct decision for the organization. Internal chaos might arise due to the
unclear priorities.
 Executive transition Mitigators- Regular turnover of the employees may result in
slowdown of the implementation affecting the achievement of the strategic goals.
 Feedback loop- Frequent feedbacks should be enabled in order to justify the
performances through control reports and performance metrics.

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Project portfolio models
The various models of project portfolio management helps to elevate the
understanding of the project and the work of the organization. These models are as follows-
 Scoring model- This model rates programs and projects in various categories of
numeric scale. All the scores are summed up to evaluate the score of project
attractiveness, which is utilized by the companies to prioritize projects or programs.
Evaluating the project portfolio management lifecycle along with evaluating programs
and projects are key elements of this model (Cleden 2017).
 Five question model- This includes qualitative measurements in order to assess the
overall success of project portfolio management. The five question model consider
the following five questions-
Fi
gure 1: Five question model
Source: (Created by the author)
 Portfolio, program and project management maturity model- This model measures
the health of the company and the ability of the company to be constructively adapt.

10PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
This hierarchical way of measuring helps to deliver programs, portfolios and projects
(Crawford, 2014).
 Cost benefit analysis- This model helps in the systematic determination of a project’s
viability that weighs the cost against the benefits. It has mainly two functions. Firstly,
to determine the benefits over the costs. Secondly, a system is created to compare the
projects to one another (Johansson & Kriström 2018).
 Decision-Tree analysis- This model involves qualitative measurements that involve
visual depiction. An individual project is taken up and the possible expansion of the
project is evaluated with the help of this model. Factors with unknown results are
included on this decision-tree by the addition of multiple possible outcomes, neutral ,
positive or negative. The positive to negative ratio results helps to assess the viability
of the project (Bhargava et al., 2013).
 Monte Carlo Simulation- This model is computerized and helps in the analysis of
risks based on the probable distributions. This simulation adds values to the factors
with uncertainty and creates the outcome model. This technique helps the
organization to determine the costs and the benefits (Rubinstein & Kroese, 2016).
There are different techniques that help to measure the project portfolio management.
These are – Heuristic model, Visual or mapping techniques and Scoring techniques. CPB
Contractors should use the Scoring Methods Model because it is the best-known method
to carry out the arithmetic operations regularly. Attribute values can be easily calculated
by the company. It assigns positive power to the attributes of benefits and negative power
tp the attributes of cost. Hence CPB Contractors will be highly beneficial. The scoring
method are designed to measure the risk for medium sized companies.
Tools and techniques
Various tools and techniques are utilized for project portfolio management.

11PROJECT PORTFOLIO MANAGEMENT OF CPB CONTRACTORS
 Heuristic technique- This technique helps to resolve problems, helps in learning
which includes practical methodology to get a sufficient solution for immediate goals.
(Milosev & Martinelli, 2016).
 Mapping techniques or visual maps- This management tool visually explains the trend
of work and helps to re-organize the flow of work (Kaiser, El Arbi & Ahlemann,
2015).
 Scoring techniques- This technique enhances profitability and guide in planning
strategy. It involves mathematical operations on a regular basis (Nowak, 2013)
CPB Contractors should use the Scoring technique in order to monitor their project
outcomes and revenue generation by using arithmetic operations. The CPB Contractors
can also measure profitability of the project.
Conclusion
This paper concludes that implementing project portfolio management in the road
construction of CPB Contractors will reduce the inefficiencies that take place while
undertaking a program or a project and removing the notable risks involved. The risks may
arise due to the lack of system availability and required information. Thus, an awareness of
the project portfolio management of an organization is essential to execute specific projects.
It is also concluded that a systematic portfolio management will help the company to manage
the programs, projects and operations. Additionally embracing modern techniques and
technologies will help CPB Contractors to reduce their cost of executing the projects and
reducing the period of payback.

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