Efficient Frontier

RI Expands the Efficient Frontier

Almost all Programs at the Roadmaps Institute are built around a very simple concept called  the Efficient Frontier.  The Efficient Frontier is reached for a company when a project portfolio is optimized.  Projects are usually prioritized to go into the project portfolio based on Return on Investment or ROI.   The number of projects that can be accepted into a company's project portfolio is limited by the resources available.  This constraint can be seen in the graphic as the "Budget" Line.  The limitation on the expected return on the projects if resources are fixed is the available projects based on the knowledge of the managers involved.  

BROWN DOT - If the team is limited to a departmental team within the company this point is likely represented by the brown dot on the Budget Line.  

Expanding to the Current Frontier

RED DOT -  The company would logically have a higher return portfolio by including more managers from other functional areas to get closer to the red dot.  

PURPLE DOT -  If the managers have recently been part of programs where they learned some best practices, such as an MBA program, they might come closer to the World-Class Frontier.  Dr. Starling has co-developed seven such graduate programs and confirms that none of them actually gets you to the World-Class Frontier.   The professors tend to teach what they feel is important and the actual needs of managers in the programs are not fully met.

Achieving the World-Class Frontier

YELLOW DOT - At RI, our World-Class Management Step Charts are designed to help managers understand how to improve their project portfolios to get up to the yellow dot or the World-Class Frontier.   The World-Class Frontier is as far a single company or division can go by itself.  To go higher requires collaboration with other companies or divisions in the same larger enterprise or collaborations with external companies either in or outside of the value chains.

Reaching the Enterprise Frontier

GREEN DOT - The Enterprise Frontier is reached when project ideas are considered with all relevant divisions (sometimes referred to as companies) with the greater enterprise.  Bringing together managers from across an enterprise requires enterprise upper management to champion the efforts, most likely the CEO. 

Final Expansion to Alliance Frontier

BLUE DOT - The only way to increase the return on the project portfolio beyond the Enterprise Frontier level is to involve value chain alliance partners.  Alliance partners include suppliers, customers, and in some cases peer companies that simply want to collaborate but don't have goods or services being transferred between them. 

Only RI Offers the Alliance Frontier

As far as RI understands current literature on the Project Portfolio Maximization, RI is still the only organization in the world that provides companies a methodology coupled with best practice maturity models (aka step charts) covering all key core competencies to enable the companies to go from their Current Efficient Frontier to the Alliance Frontier.  

RI defined the concepts in 2004 while developing the book DR2IVE that was used within Raytheon Company to reach the Enterprise Frontier.  Raytheon never fully reached the Alliance Frontier due to the recession of 2008, but they did involve some alliance suppliers and one big customer, the United States Air Force in limited collaborations.