The project portfolio management is some sets of disciplines of senior leadership which help to maximize the value of the business and drives strategic execution by optimization, selection and by the analysing the project investments which all are aligned to strategies and goal of the business (Martinsuo, 2013). The project portfolio management can manage the processes, technologies and the methods in a centralized manner which are used by the project managers to manage and analyse any specific type of project which is based on various key characteristics.
In this paper, the strategic value of project portfolio management and the project management will be evaluated. Also, various applications of the project portfolio management tools will be discussed in this paper.
To evaluate the strategic value of the project portfolio management situational context of the selected organization will be evaluated. Following that portfolio evaluation will be done. After the evaluation of the portfolio management of the portfolio will be assessed in this article. Finally, the maturity levels and the corporate culture of the organization will be discussed properly.
The findings from the implemented project portfolio management on the organization will be evaluated in this case. The project portfolio management was applied to the organization Toyota, and in the following section, those findings will be shared.
The swot analysis of the Toyota Company has shown that currently, the company is having various type of weaknesses within their system (Gao & Low, 2014). Also, there are many threats which are the company is facing. This threat includes cost increase threats and market competition threats. To manage these weaknesses and to mitigate the threats the Toyota is currently approaching to the project of Total quality management. This approach has helped the Toyota to be successful in their domain. The total quality management allows Toyota to manage the production cost and the inventory (Goetsch & Davis, 2014). The number of defaults has been reduced by the total quality control, and it has improved the loyalty and the satisfaction of the customers. So it can be stated that Toyota is investing in the right project.
The Toyota Company has introduced strategic alignment metrics in their current environment of the organization. This strategic alignment metrics is a type of tool which helps the project to determine overall strategic fits related to the project (Gerow et al., 2014). Scoring is very much important for every project and using this tool of the strategic alignment metrics scoring has been done here. The scoring technique has helped Toyota to determine whether the project can increase the capacity or not and it has been determined that Toyota can increase its capacity by introducing the approach of total quality management.
In recent times Toyota has faced various types of problem due to the rising price of raw materials and fuels. The main problem they have faced is the quality production issue (Kochan, Lansbury & MacDuffie, 2018). To tackle this situation Toyota has introduced project portfolio management by the implementation of the total quality management and by implementing this, Toyota is now executing very well. The introduction of the project portfolio management assisted Toyota to remain competitive in the automobile industry. Now Toyota is able to determine the profitable products and also able to cut the products which are unsuccessful. This thing has helped Toyota to save a large amount of energy and time.
In the current situation, while project portfolio management is applied to Toyota, it will not be able to absorb all the changes instantly. The implementation of the total quality management may lead to the organizational conflicts and organizational resistance in terms of management of the human resources and operations in Toyota (Rahim, 2017). This can lead to employee demotivation, poor performance and outcome of ineffective communications. It can also affect the ongoing projects badly in terms of the efficiency of the project. To absorb all the changes the organization needs sufficient amount of time and cooperation of the employees of the organization.
The Toyota is now actually realizing the benefits which are promised by the implementation of the project portfolio management. By the implementation of the total quality management, Toyota is able to profit more which was promised before the implementation of the project portfolio management (Killen & Hunt, 2013). Another benefit is the effective cash management which is achieved through the total quality management.
The automotive giants Toyota has used the total quality management as the project portfolio for managing its operations effectively. In this total quality management, Toyota has used some specific methods to evaluate its overall project portfolio. This methods of evaluation are the cost/value performance, strategic alignment and continuous improvement (Clark, Silvester & Knowles, 2013). By using the value/cost performance method, Toyota can understand the organizational money spending for the project portfolio which has been initiated in this case. Also, this can help the Toyota to understand the returns of the project and to compare the spending history of Toyota with the market rivals. In the second method, the strategic alignment project’s overall strategic fits are determined with the implemented portfolio. Scoring of the project is done by using this method (Costantino, Di Gravio & Nonino, 2015). The method of continuous improvement is related to the operational efficiency of Toyota that can be achieved by overall project portfolio management. The main benefit of this method is that it helps to identify the opportunities which can help to improve the project in the portfolio.
The above methods of project portfolio evaluation are chosen in this case because all the three methods have provided the basic needs which are required by the Toyota. Before implementing the project portfolio, Toyota was facing difficulty in managing the profitability and the cost due to the rising price of the raw materials and fuels. As Toyota was facing difficulty in the cost management, cost/value performance method was implemented in this case because it can efficiently manage the budget of the Toyota (Millar & Hall, 2013). Also, Toyota faced huge financial loss in the automotive industry as for some major flaws in their production line. Due to this major fault, the Toyota needed to call back its vehicles line up of Camry and the RAV4 in the year of 2007. In the year 2011 Toyota again recalled 111,000 vehicles from the market which led to massive financial loss (Nkomo, 2013). Due to this reasons, Toyota agreed to introduce the method of continuous improvement. The continuous improvement method analysed the operational efficiency of the Toyota which helped the Toyota to rectify its major fault in the production line (Bos & Millone, 2015). As the total quality management was introduced in the Toyota, it was very much important for them to analyse the efficiency of this total quality management. For this reason, the strategic alignment method is used by Toyota. The strategic alignment evaluated the improved quality in the product line by using the project efficiency of the project to maintain competitiveness in the market (Kim & Kim, 2015), a decrease in the operating cost and increase in the capacity of the Toyota. By analysing this, all this method actually analysed the value of the project. Thus the use of these methods is justified in this case.
Using the above-discussed methods, Toyota is not going to face any type of serious challenges. This is because Toyota is already operating in a global environment and by introducing these methods Toyota has solved several problems within the organization. Thus it can be stated that is currently no challenges that Toyota will face using the methods in a global environment.
The benefits management lifecycle works on the principle of identification, appraisal, planning, realise and reviews which all work in a cyclic manner (Bradley, 2016). The methods used by the Toyota for the evaluation consists all of these principles. So it can be stated that the benefits management lifecycle was incorporated indirectly in the process of the evaluation.
The benefits management is the process of the planning, identification, tracking and measurement of the project investment until the realization of the projected benefit (Kerzner & Kerzner, 2017). The benefit measurement ensures that the benefits that are desired are specific, agreed, measurable, realistic, and most importantly time bounded. As the benefits management is controlling all of these aspects of the project management, the benefit management can ensure the successful goal deliveries of the project.
The project portfolio management has clearly ensured that the collective projects of the organization are completely aligned with the strategic objective of the organization. In the first step the project portfolio management created inventory as a strategy. By creating the inventory, the Toyota can identify all the projects which are the pipeline of the Toyota. Toyota must ensure that these projects are within the strategic goals of them. The second step by the project portfolio management is the project analysis which is in the pipeline of the Toyota (Fair et al., 2015). Analysing will help Toyota to determine which project will provide greater value to them. The third step of the project portfolio management is the analysing which projects are aligned with the strategic objectives which are determined by the Toyota. For this step returns and the risks are determined in this case. The fourth step of the project portfolio management is the role of management of the Toyota. The proper budget should be allocated to the projects after the evaluation of the project for the proper execution of those assessed projects. In the last step, Toyota must focus on the testing and adoption of those projects. It is required because only the practical implementation will ensure that the selected project will provide the desired results or not. By executing all the projects mentioned above, Toyota is ensuring that all the collective projects are aligned with the strategic objective of them.
The concept of the project management office has been introduced in this case of Toyota. By the establishment of the project management office concept, Toyota can achieve success in the key performance indicators of the project (Pemsel & Wiewiora, 2013). These key indicators are the schedule, scope, quality, benefits and the budget. In this case of the Toyota, it has been assessed that by the implementation of the project portfolio management the organisation is improving these key indicators. Thus it can be stated that the project management office concept has been introduced in this case. Moreover, that as Toyota has successfully standardised the assessed practices in this case which has increased the success rates of the project.
The Toyota is currently using both of the qualitative and the quantitative approach of tools for managing the portfolio of the project. In the current situation these tools are very much effective in the management of the project portfolio. The tools or the methods used by Toyota is the cost/value performance tools, strategic alignment tools and the tool of continuous improvement.
The maturity model can assists the organization Toyota by the implementation of the high level of organizational behaviour. It also, improve the success of the project and improve the performance of the organization (Falessi, Shaw & Mullen, 2014). The maturity models are currently having a total number of five levels. As Toyota is facing problems in the management of the cost, it has been assessed that at the level three or the level defined Toyota will look at terms of the approaching to the project portfolio management. It is because of that the standard processes of the organization is established in this level and improved over the time.
The best practices which can be adopted for improving the maturity level of Toyota is the awareness of the process, process repeatability, process definitions, management of the processes and the optimization of the processes. The model, in this case, is the PRINCE2 model which will be the appropriate one.
To implement this changes some internal help is required from the organization. First of all, for an unaware organization, the creation of awareness among the whole organization is the first requirement, and for the implement, this changes organizational support is required which includes the support from the colleagues as they might create the main problem in implanting this practices.
The corporate culture of Toyota is very much success because they have applied the Japanese corporate culture and the mechanism of the decision-making. Using these two factors, Toyota is able to analyse the crucial factors of each of the decisions which are taken on the manufacturing plants. The process of the decision making brings transparency to all of the decisions made by Toyota (Kelley, Cranor & Sadeh, 2013). Thus it can use the mechanism of the recall for solving the problems. In terms of influence cultures of the Toyota will impact several internal stakeholders in a different way. As an example, the HR manager will be influenced more than the facilities and technology manager in terms of transparency in the organization.
The process of the project portfolio for the selected project is running very well. Though it is running well, improvements can be done by the initiative of the change management and the benefits realization. These can help to improve the prospective area of stakeholders. The main concern the stakeholders might express is the marketing condition of the Toyota. Though Toyota is one of the major organization which does innovation with their products but still the market competition for Toyota is very much tough.
The corporate culture of the Toyota Corporation will support the project of the portfolio and the criteria of sustainability by handing and supporting the projects in various aspects. These aspects are the training, governance, process orientation and roles and responsibilities. When the organization’s corporate culture manages the processes of Toyota in a good way, it actually becomes a success factor of the project (Eccles, Ioannou & Serafeim, 2014). Thus it will support the management of the project portfolio and the sustainability criteria. The governance and the training also have some contribution to the management of the project portfolio.
The Toyota Corporation has implemented the project portfolio in a very good way so that in current situation this organization is not facing any type of issue in their production line. Implementation of this project portfolio of the total quality management helped Toyota to control its production line, and it also helped to achieve perfect cost control. In such a way, this portfolio management has helped to gain sustainable development in the organization of Toyota without facing any type of big challenges.
Conclusion:
From the above discussion, it can be concluded that project portfolio management is introduced in the various organization for reducing the inefficiencies which occur in the project due to several risks and weaknesses of the organization. The project portfolio management helps to eliminate this type of risks and threats thus it improves the efficiency of the organization. In this case, the analysed organization is the Toyota Corporation which is the biggest organization in the automotive industry. There is several criteria for implementing this project portfolio management perfectly within the organization. In this case, the Toyota Corporation has implemented total quality management of the project portfolio. One of the criteria for implementing this project portfolio of the total quality management is the creating awareness among the organization about this project portfolio which has been done by the Toyota Corporation properly. Before implementing the project portfolio management, Toyota was facing various types of issues in their organization due to the high price of the raw materials and the fuels. Toyota has also done mistakes in their production line, and due to this fact, their line-up of the RAV4 and Camry vehicles has been recalled by them. From the market statistics, it has been found that the Toyota recalled a total number of 181,000 vehicles from the market due to the fact of abnormal noise and leakage in the fuel injection process which cost Toyota a huge loss. Implementing the project portfolio management helped the Toyota Corporation to overcome this issue by improving the production line and by decreasing the operating cost of the organization.
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