Wednesday, July 01, 2009

Project Portfolio Decisions








British Airways make portfolio move as it places an ERP project on hold, ahead of vendor selection, to conserve cash. ...

British Airways practices project portfolio management

... "Walsh said BA would consider such a system, along with other big cash hungry projects in around two years time, when hopefully the economic turmoil had died down. " ...


Via UK IT PRO: BA ERP Decision

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posted by Frank M @ 7:57 PM, Read More...  
6 comments links to this post

6 Comments:

At 11:11 AM, Anonymous Pradeep Bhanot said...

This is a great example of balancing the business portfolio to better fit the margin pressure being imposed by the current business climate. BA is not alone in this situation; many industries are deferring cash hungry projects with long lead times to value in favor of projects that promise faster returns that are needed now, as that can help carry them through the current economic turbulence.

 
At 11:18 AM, Anonymous Pradeep Bhanot said...

This is a great example of balancing the business portfolio to better fit the margin pressure being imposed by the current business climate. BA is not alone in this situation; many industries are deferring cash hungry projects with long lead times to value in favor of projects that promise faster returns that are needed now, as that can help carry them through the current economic turbulence.

 
At 10:22 AM, Blogger Frank M said...

Yes. You are right, Pradeep. Quick payback and faster time to value is the driver now. A few companies with excellent cash flow will use this time to make strategic investments.

Thanks for your comments.

Frank

 
At 7:03 AM, Blogger Josh said...

Here's the thing though...

Companies with truly strategic portfolio planning would have enough reserve to be aggressive during a downturn like this.

Instead of cutting back, they should be starting these projects now so that when the economy does recover, they will have a competitive advantage.

BA would do better to think and plan for longer investment cycles given their industry. To me, an airline who defers multi-year life-cycle projects as a REACTION to current market conditions just isn't planning very well.

This represents POOR portfolio management, because it is merely tactical instead of strategic.

Josh Nankivel
pmStudent.com

 
At 2:35 PM, Blogger Frank M said...

Josh - excellent comment.

Your point would work for BA if they have sufficient cash on-hand or cash flow to support their strategic investments or if they would be willing to take on short/long term liabilities to fund initiatives.

I suspect most airlines are managing for cash.

The few airlines investing through the business cycle are the ones to watch. Those would be stocks worth owning.

 
At 2:52 PM, Blogger Josh said...

Agreed!

Josh Nankivel
pmStudent.com

 

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