A few months ago, I wrote a blog post entitled “Teaching and Learning Project Portfolio Management: What’s Your Experience?” that discussed an idea for teaching project portfolio management to graduate business students in a way that introduced them to the concepts of strategic project prioritization and portfolio optimization against constraints. One of my former professors, Dr. Tom Oser, who teaches IT Strategy in the Executive Management of Technology Masters program (EMTM) at the University of Pennsylvania read it and was particularly intrigued by the potential of offering a module in IT portfolio management using our project portfolio management application Optsee®. The EMTM program is a 20-year old executive Masters of Science program co-sponsored by Penn Engineering and the Wharton School. It was the first of its kind to offer a blend of courses in modern management and emerging technologies, so offering an IT Strategy module that gave students a “hands on” experience applying modern simulation and optimization technology using Optsee® to solve a vexing business problem was a natural fit. We decided to use a two-part case study written by Professor Mark Jeffery and Lecturer Joseph Norton from the Kellog School of Management at Northwestern University called “MDCM, Inc. Strategic IT Portfolio Management” available from Harvard Business Publishing. The case describes the challenges that a large medical device contract manufacturer is facing in trying to improve their out-of-date and chaotic IT infrastructure. The case ends with the new CIO preparing to work with his IT staff to develop a presentation to the board around what projects they were going to recommend and why. The case presents a small portfolio of 12 projects, each with great strategic importance to the firm, but since the case did not fully dimensionalize the projects, we created a set of 8 attributes and corresponding values around each one including:
  • Net Present Value
  • Probability of Success
  • Total Cost
  • Business Process Improvement
  • Core Competency
  • Customer Commitment/Need
  • Employee Satisfaction
  • Integration
Then we added a set of annual budget and resource constraints over a three-year period that force the teams to make the hard choices as to which projects they will and will not be able to execute. Thus, based on their understanding of the case and working in teams, the students are asked to do the following:
  • Determine the appropriate weight for each attribute that reflects MDCM’s IT strategy.
  • Determine the appropriate value setting for all the attributes for each project based on their understanding of the case, except for “Net Present Value,” “Probability of Success,” “Total Cost,” and “Total Resource Requirements” (these were fixed).
  • Prioritize the projects and optimize them to maximize value to MDCM.
  • Develop a “Report to the Board” that recommends an optimal project delivery plan for the next three years.
Each student will get a free fully-functional version of Optsee® desktop pre-loaded with the projects, a full-tutorial, and a detailed step-by-step guide to completing the assignment. Optsee is compatiable with both Windows and Mac computers, and requires no speadsheets or programing to run Monte Carlo simulations and portfolio optimizations. If you’re a professor who might be interested in using this in your class, please e-mail or call me. I’d be happy to discuss it with you.