Page 164 - Global Project Management Handbook

7-14 STATE OF THE ART OF GLOBAL PROJECT MANAGEMENT

ASSIGNING A PROJECT OR A PROGRAM

Assigning a project or a program is a project portfolio management process. The assign-
ing process considers those investments whose initialization probably requires a project
or a program. It is the objective of the assigning process to decide on the realization of an
investment and the organization of the initialization of that investment. The consequences
of a proposed investment for the investment portfolio of the project-oriented company
must be considered. Investments that make an optimal contribution to realization of the
strategic objectives of the project-oriented company should be selected.
Possible organizational alternatives for the initialization of an investment are the project
organization, the program organization, and the permanent organization. By defining the
assigning of a project or a program as a business process, its tasks and the necessary deci-
sions are formalized. The clear differentiation between the investment decision and the orga-
nization decision contributes to ensuring the quality of decision making. It reduces the risk of
bad investments and inadequate organization forms for the initialization of investments.

Tasks in Assigning a Project or a Program
The business process of assigning a project or a program starts with formulation of a rea-
son for an investment and ends with assignment of a project or a program. The phases of
the assignment process are
● Developing the investment idea
● Developing an investment proposal and a project proposal
● Investment decision making
● Organization decision making
● Formal assignment of the project or program
Methods for assigning a project or a program are

● Investment proposal
● Investment portfolio score card

● Business case analysis or cost-benefit analysis
● Project proposal
● Project assignment
The decision regarding the realization of an investment and the decision regarding the
adequate organizational form for its initialization can be taken by the project portfolio
group. Many project-oriented organizations employ an investment-decision committee
for investment decision-making purposes and use the project portfolio group only for
project portfolio coordination.

Investment Proposal and Investment Portfolio Score Card
The investment proposal serves the purpose of describing an investment to be proposed. The
investment proposal summarizes the problem formulation and the reason for the investment,
the investment objectives, a description of the investment object, the required first payments
for the investment, the contributions of the investment for realizing the financial objectives,
the contributions to realization of other objectives of the project-oriented company, and the
organizationalformfortheinitialization oftheinvestment(Fig.7.10).