Project Portfolio Management Planning Report for Flowserve Company

This report provides a comprehensive analysis of project portfolio management (PPM) for Flowserve, a multinational company in the industrial and environmental machinery sector. The report highlights the benefits of adopting PPM, such as improved resource allocation, strategic alignment, and increased efficiency in project completion. It evaluates Flowserve's current practices, identifies opportunities and threats associated with PPM implementation, and proposes a modern portfolio model for prioritizing projects. The report also discusses the challenges Flowserve might face, including setting project priorities and establishing effective communication hierarchies. Furthermore, it outlines the tools and techniques, particularly analytical tools, that can be used to monitor and measure project performance within a PPM framework. The report emphasizes the importance of corporate social responsibility (CSR) and sustainability in Flowserve's operations and how PPM can support these goals. The conclusion underscores the need for adequate resources and the right personnel to ensure successful PPM implementation, ultimately aiming to enhance Flowserve's strategic value and project outcomes.

PROJECT PORTFOLIO MANAGEMENT PLANNING
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Abstract
Project management is a common practice that has been adopted to control the activities
in a project. On the other hand, project portfolio management is a practice that has been adopted
by organizations to monitor different projects that a company is undertaking. Since Flowserve is
a multinational company that undertakes multiple projects, it would benefit from adopting
project portfolio management. It would have a better allocation of resources and ensuring
efficiency in the completion of the projects. However, regardless of the benefits of adopting a
project portfolio, the company would face some challenges such as; setting priorities on which
projects to first undertake. For the implementation of a project portfolio to be effective, the
company has to ensure it has adequate resources and the right personnel. Additionally, some
different tools and techniques are used to manage the project portfolio. The most common are
analytical tools used to measure the performance of a project.

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Introduction
Project management has become a common practice in most organizations today. It is a
practice that plans, executes, and controls the activities of a team in achieving specific goals to
an organization within a specified time(Morris & Pinto, 2010) . Most organizations have adopted
project management practices to help in effectively managing their projects as it helps identify
and resolve problems quickly. Additionally, it helps the organization gain a different perspective
of the project and how it fits in the strategy of the organization. In return, the organization can
prioritize its resources and ensure efficiency in achieving their goals. Another benefit of project
management to the organization is that it can schedule and budget for costs and resources
accurately from the start of the project. However, most organizations fail to meet their project
goals due to the constraints given.
Organizations have different projects that are running simultaneously in the organization under
different project managers. These create a problem of how to assign resources to different
projects. For this reason, organizations have adopted Project Portfolio Management (PPM),
which is a centralized form of management for all the organization's projects. Although most
projects are not related to one another, they are managed under one portfolio. As shown in a
study by Inc (2011), project portfolio management provides oversight to all the projects of an
organization and manages the resources of the different projects. PPM ensures that the
organization's projects are started and done at the right time to maximize the investments made
by the organization.
Portfolio management identifies potential projects to an organization and approves them
depending on the resources and time available to undertake the projects. They then assign project
managers to the approved projects. In approving these projects, PPM ensures that they are in line

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with the overall strategies and goals of the organization. Hence, PPM controls and monitors the
different projects in their cycle to ensure they are in line with the organization's goals and
strategies. Additionally, PPM may allocate more resources to a project during its cycle if the
budgeted resources prove to be insufficient. Most of the projects initiated by an organization are
aimed at bringing change to the organization. Therefore, change management is vital to the
organization in ensuring the change brought about by the different projects is well accepted
(Spivak, 2019). This is done by the project management office which handles all activities
related to project portfolio management.
Evaluation of project portfolio management in Flowserve company.
Flowserve is a multinational company that deals in the supply of industrial and
environmental machinery. It is a company that has several branches all over the world. It
undertakes a lot of projects internally which are aimed at ensuring their product growth.
Additionally, the company is also subcontracted to carry out other projects by different countries
and companies. Due to the large number of projects undertaken by the company, introducing
project portfolio management in the company will be an effective strategy to help the company
monitor its projects. Additionally, the projects undertaken by the company vary as they are both
internally and contracts from other companies. Therefore, PPM will be effective in ensuring the
company meets the different needs of the projects. In a study by Martinsuo & Killen (2014), it
showed that a company that undertakes a lot of different projects will benefit from project
portfolio management in that it will access the value of the different projects. Additionally, it
will help create a competitive advantage for the company.
Currently, Flowserve has not adopted project portfolio management in managing its projects. It
manages its operations by hiring project managers to undertake the different projects it

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undertakes. The research and development department of Flowserve identifies the projects to
undertake and assigns resources to the project managers to undertake the project. The main
disadvantage of this method is that the projects are not always aligned with the long-term goals
of the organization (Unger et al., 2012). Also, the allocation of resources may be done poorly.
The adoption of PPM by Flowserve would help it better manage their projects. It would also
ensure that the company undertakes projects that are in line with its strategies and goals.
Flowserve has highly invested incorporate sustainability to ensure that they provide a
conducive environment for its employees and high-quality products to its customers. Corporate
Social Responsibility (CSR) has become a requirement for most organizations today. Flowserve
does its CSR by giving back to the community. It provides improved goods and services to their
customers. This helps in sustaining the market for their products. Additionally, Flowserve deals
with the supply of industrial and environmental machinery. These are products that have been
known to be high pollutants to the environment. However, Flowserve has incorporated programs
aimed at recycling and waste reduction to ensure minimal pollution to the environment.
Additionally, they produce products with high emission control levels. CSR has been used to
boost the performance of the organization as well as ensure environmental sustainability
(Kerzner & Learning, 2010).
Opportunities and Threats to adopting project portfolio management
The adoption of project portfolio management by Flowserve would highly benefit the
company in undertaking different projects. Portfolio management helps a business understand
the risks involved in undertaking a certain project and mitigate the risks (Badiru & Osisanya,
2016). This would benefit Flowserve in that it undertakes projects from other companies.
Therefore, the company is in a better position to quote a reasonable price based on the risks

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associated with the project. This will help the company in making decisions as to whether to
undertake a project and know how profitable the project is.
Equally important, the business value of Flowserve would increase after the adoption of project
portfolio management. This is because PPM would increase the project turn times. Portfolio
management gives a clear schedule of all the activities to be carried out while undertaking a
project. The process of PPM offers an option to test and adapt the process when monitoring a
project. Therefore, the management can add more resources to a project if the test done during
the process shows that the resources would be insufficient. For this reason, when the project
starts, there is a clear way of how the activities are to follow with adequate resources (Luca,
2017). This ensures continuity of workflow for Flowserve and thus increasing productivity and
efficiency of the project. The business value of the company will increase due to efficiency
which helps complete the project in a shorter period.
On the other hand, in adopting project portfolio management, the company is likely to
face some challenges. Flowserve deals with a lot of projects at a time. Thus, setting priorities on
which project to start and how much resources to assign to a different project is a challenge that
Flowserve would face (Teller & Kock, 2013). However, the company can overcome this
challenge by prioritizing projects based on if they align with the company's strategies.
Additionally, a high hierarchy of communication is a challenge that most organizations would
face. Flowserve is a multinational company with different branches in different countries that
undertakes multiple projects. If there are multiple levels of hierarchy in which a member of a
team has to go through to clear any doubts they have, likely, the issue will not be resolved. In
meeting this challenge, the company should personnel within the project team whom the
members can go to for any queries they have.

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Developing a plan for introducing project portfolio management
Organizations barely have enough resources to cover all their projects. For this reason,
when a company wants to implement project portfolio management, it must ensure it has
adequate resources (Lock & Wagner, 2018). Flowserve should be aware of all the resources it
has and decides on how to prioritize the resources to different projects. Additionally, before
implementing project portfolio management, an organization should ensure it has the right
personnel. The most common reason why most organizations are unsuccessful in implementing
project portfolio management is that they have the wrong personnel on the team (Patanakul,
2015). Flowserve should ensure that it selects the right people who can be able to allocate
resources and prioritize projects effectively. This will ensure the success of portfolio
management.
In implementing project portfolio management, Flowserve should adopt the modern
portfolio model. A study by Francis & Kim (2013), described the modern portfolio model as a
theory that organizations use to construct a portfolio that will maximize the expected return of an
investment given the level of market risk. In using this model, Flowserve can be in a position to
prioritize the projects to undertake given the level of risk involved and the expected return of the
projects. In choosing projects with minimal risk, Flowserve will experience an increase in its
profit levels which shows the performance of the company. Additionally, the theory assumes that
in determining a portfolio, a company combines different projects into one portfolio. Thus, the
diversification of the projects will form multiple revenue streams of the company with minimal
risks.
As shown in the study by Inc (2011), implementing a successful project portfolio
management requires the organization to follow several steps for it to succeed. The first step

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requires for all the projects for Flowserve to be identified and differentiated depending on if they
are a minor or a major project. The portfolio management should then determine the process in
which the different projects identified should be approached and the tools to be used. Since
resources of the company may not be enough to cater for all the projects, the management then
determines a method in which to prioritize some projects over others. The management should
then look at the running projects and determine the cost of completing the projects. Then
compare the budget remaining with the costs required to complete the new projects. When the
projects are running, the portfolio manager will monitor the progress of the projects and ensure
that they are successful within the stipulated resources and time.
Tools and Techniques for project portfolios
Project portfolio management tools and techniques are systems that the management uses
to oversee the portfolio process. These tools are used to monitor and show the progress of
different projects (Kodukula, 2014). The most common tools and techniques used are analytical
tools. They are used to compare the benefits of the financial performance of a project to the
strategies of the organization. Analytical tools are further broken down into cost performance,
strategic alignment, and continuous improvement analytics. The strategic alignment metrics is a
tool that is used to determine if the projects in the portfolio are in line with the organizational
strategies. Projects in line with the strategy and goals of the organization are considered to be
successful. Additionally, the continuous improvement metrics are used to determine the
efficiency of managing the projects and the portfolio (Petit, 2012).
Analytical techniques would be the best to use for Flowserve since they would show the
performance of the different projects they have undertaken. Under the analytical tools, cost
performance would be the most ideal metric for Flowserve. This metric uses different key

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performance indicators to measure the performance of the projects. The most common indicator
used is measuring the return on investments. It is a technique that determines if a project is
profitable enough with respect to the costs incurred (Resources, 2016). This would be the perfect
tool for Flowserve due to its nature of undertaking several projects. The company will know the
determine the projects that are profitable and drop the non-profitable projects.
Conclusion
Project portfolio management has become a common practice for most organizations
today. It is a practice that has been adopted to help in the allocation of resources to the different
projects that an organization undertakes. Flowserve is a multinational company that undertakes a
lot of projects. Therefore, it would highly benefit from adopting the project portfolio to help with
the managing of the projects. Adopting the project portfolio would provide a lot of opportunities
for Flowserve.

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References
Badiru, A. B., & Osisanya, S. O. (2016). Project Management for the Oil and Gas Industry: A
World System Approach. CRC Press.
Francis, J. C., & Kim, D. (2013). Modern Portfolio Theory: Foundations, Analysis, and New
Developments. John Wiley & Sons.
Inc, E. (2011). Project Portfolio Management: A View from the Management Trenches. John
Wiley & Sons.
Kerzner, H., & Learning, I. I. for. (2010). Project Management - Best Practices: Achieving
Global Excellence. John Wiley & Sons.
Kodukula, P. (2014). Organizational Project Portfolio Management: A Practitioner’s Guide. J.
Ross Publishing.
Luca, R. (2017). Project Portfolio Management Strategies for Effective Organizational
Operations. IGI Global.
Martinsuo, M., & Killen, C. P. (2014). Value Management in Project Portfolios: Identifying and
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Patanakul, P. (2015). Key attributes of effectiveness in the managing project portfolio.
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https://doi.org/10.1016/j.ijproman.2015.01.004

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Petit, Y. (2012). Project portfolios in dynamic environments: Organizing for uncertainty.
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