Behavior of internal stakeholders in project portfolio management and its impact on success

Stakeholder behavior and stakeholder management are key success factors within project portfolio management (PPM). This empirical study of 197 project portfolios investigates the effect of the intensity of engagement (IoE) of portfolio-internal stakeholders on project portfolio success. We show that the effect of stakeholders is phase-specific and that role clarity as a measure of PPM maturity affects the nature of the relationship between the IoE of stakeholders and portfolio success. The effects of the IoE of senior managers on success are not clearly positive with regard to strategic portfolio structuring and are even negative in operative portfolio steering in established PPM systems. In immature PPM systems, line managers tend to take advantage of their position in resource management. Surprisingly, the influence of portfolio managers in portfolio steering is insignificant. Altogether, this paper shows the diverse effect of the IoE of stakeholders on portfolio success. This study enriches project research by applying stakeholder theory to the project portfolio context and offers practical guidance for further professionalizing PPM.     

Identifying,framing and managing uncertainties in project portfolios

Uncertainties in the organization, external environment and from single projects may hamper project portfolio performance unless managed properly. This paper introduces a framework on uncertainties and their management in project portfolios and pursues increased understanding on how managers can take uncertainty into account better. We explore uncertainties, how managers frame them as opportunities or threats, and the actual practice of managing them across ten R&D project portfolios. The framework on project portfolio uncertainties and their management is further refined based on the empirical results. As key contributions, we show evidence on the balanced existence of three types of uncertainties, the threat bias in their framing, and the dominance of rational, opportunity driven mechanisms of control in uncertainty management. We discuss the context-dependent practice of project portfolio management and the need to complement rational mechanisms with structural and cultural, for project portfolio management to become a dynamic capability.     

The three roles of a project portfolio management office: Their impact on portfolio management execution and success

Project portfolio management offices (PPMOs) are a subset of project management offices (PMOs) that handle collections of multiple single projects and programmes, i.e. portfolios. PPMOs are centralised organisational units that cater to the demands of various stakeholders by performing specialised tasks. They are initiated by their organisation's leadership in response to increasing management challenges originating from project portfolios. Although there has been considerable research on PMOs in general, not only a clear understanding of multi-project PMOs' activity patterns set in specific contexts like project portfolio management, but also both existence and mode of multi-project PMOs' contribution to successful performance are still lacking. By quantitatively analysing PPMOs in 278 portfolios, we identify three different activity patterns, which are interpreted as distinctive roles. We show a significant positive effect of PPMOs' coordinating and controlling roles on performance in terms of project portfolio management quality, which is a predictor of portfolio success.     

Impact of customer integration on project portfolio management and its success—Developing a conceptual framework

The growing number of company projects requires comprehensive management, project portfolio management (PPM), for strategic alignment and efficient use of resources. In parallel, companies face customers demanding higher value, and joint value creation with customers is considered a key success factor in the future. Project portfolios delivering products and services for customers implicate a link between PPM and an increased customer focus. Combining the research fields of marketing and PPM for the first time, this study proposes customer integration into PPM. I develop a framework describing the impact of customer integration into PPM on project portfolio success mediated through relationship value. Furthermore, the study describes relevant aspects for customer integration on the project portfolio level and identifies interfaces for cross-functional integration of a customer portfolio representative within the PPM process. The findings and limitations of this study are discussed, and further research is suggested.     

Investment project as an internal corporate venture

A capital investment project exhibits both deliberate and emergent strategic elements. The emergent strategic elements have been conceptualized as a project strategy, which is formed in a project to attain business-oriented results and to cope with organizational and market environments. We use corporate venturing literature to explain the formation of the strategy of an individual project. In the project studies that consider the deliberate strategic elements with projects, a project has been explained to solely implement the strategy of its parent organization: This paper addresses the relationship between a project and its parent and explains how the dimensions of the parent-project relationship affect the formation of a project's strategy which may diverge from the intended strategy of the parent. The empirical study is a case study on four investments projects in Neste Oil, a firm operating in the oil refining industry. The projects have a degree of autonomy in relation to the parent, depending on their relatedness to the existing capabilities of the parent.     

The management of project management: A conceptual framework for project governance

For an organization to create optimal value from its investment in projects there must be a clear link between the outputs created by the projects and the requirements of the organization's business strategy. This means that organizations that have a structure in place for aligning the project deliverables with their organizational goals will be better placed to realize their investment in projects, and achieve the value defined by their business strategies. This paper examines existing research, ideas and concepts of project governance and enterprise project management, and offers a framework to build on current theory development and practice. Synthesizing existing literature of project/program management, governance and portfolio management, this paper proposes four key elements to improve the performance of projects and hence create value for organizations. These four elements are (1) portfolio management: focused on selecting the right projects and programs to support the organization's strategy, and terminating ones that no longer contribute to the business success of the organization; (2) project sponsorship: providing the direct link between the executive and the project or program manager, focused on the whole project lifecycle; (3) Project Management Office (PMO): providing oversight and strategic reporting capabilities; (4) projects and program support: the effective support and management of projects and programs are the measures of an effective governance system. The purpose of the framework described in this paper is to provide guidance to organizations in the development of effective project governance to optimize the management of projects.     

Understanding project interdependencies: The role of visual representation,culture and process

Project portfolio management is central to many organizations' strategic processes and requires consideration of multiple factors and the ability to envision alternative future consequences to support strategic project portfolio decision making. Complex project portfolios with multiple project interdependencies are characteristic of many project environments, yet existing methods do not provide the clear understanding of project interdependencies that is required.     

Technological invention to product innovation: A project management approach

The optimal allocation of resources at the firm level to transform emergent technological invention into commercially successful products depends on the effective assessment and selection of projects. This study develops a multidisciplinary model for differentiating, prioritizing, and selecting investment in technological projects within an organization’s portfolio. Approaches from project portfolio and strategic technology management are integrated to explore how a particular product within a diverse project portfolio may be prioritized and developed. Our results suggest that the application of the suggested model to a portfolio of biotechnology projects may enhance the assessment of internal capabilities and external competitiveness, thereby providing a basis for firms to prioritize and preferentially allocate scarce resources within a portfolio of heterogeneous technologies.     

Evaluation of project interdependency visualizations through decision scenario experimentation

The interdependence between projects in complex portfolios sharpens the challenge of project portfolio decision making. Methods that assist with the evaluation of data can address decision challenges such as information overload and time pressure. A decision simulation in a controlled experiment explored the use of visual representations of project interdependency data to support project portfolio decision making. Dependency matrices and network mapping were compared with non-graphical lists of dependency data. The findings show that the type of tool used may influence the quality of the resulting decision. Using visual tools, particularly network mapping displays, is correlated with the best results.     

Stakeholder impact analysis of infrastructure project management in developing countries: a study of perception of project managers in state‐owned engineering firms in Vietnam

Construction projects can involve a diverse range of stakeholders and the success of the project depends very much on fulfilling their needs and expectations. It is important, therefore, to identify and recognize project stakeholders and develop a rigorous stakeholder management process. However, limited research has investigated the impact of stakeholders on construction projects in developing countries. A stakeholder impact analysis (SIA), based on an approach developed by Olander (2007), was adopted to investigate the stakeholders’ impact on state‐owned civil engineering projects in Vietnam. This involved the analysis of a questionnaire survey of 57 project managers to determine the relative importance of different stakeholders. The results show the client to have the highest level of impact on the projects, followed by project managers and the senior management of state‐owned engineering firms. The SIA also provides suggestions to project managers in developing and evaluating the stakeholder management process.     

Reconceptualising mega project success in Australian Defence: Recognising the importance of value co-creation

Recent literature in project management has urged a re-conceptualisation of projects as a value co-creation process. Contrary to the traditional output-focused project methodology, the value creation perspective argues for the importance of creating new knowledge, processes, and systems for suppliers and customers. Stakeholder involvement is important in this new perspective, as the balancing of competing needs of stakeholders in mega projects becomes a major challenge in managing the value co-creation process. In this study we present interview data from three Australian defence mega projects to demonstrate that senior executives have a more complex understanding of project success than traditional iron triangle measures. In these mega defence projects, customers and other stakeholders actively engage in the value creation process, and over time both content and process value are created to increase defence and national capability. Value created and captured during and post projects are the key to true success.     

Project complexity and team-level absorptive capacity as drivers of project management performance

Many believe that project complexity reduces project management performance. However, so far research has failed to establish this causal relationship conclusively. We extend research on project complexity by introducing the concept of team-level absorptive capacity and by studying its role as mediator between project complexity and project management success. Applying structural equation modelling to a sample of 285 respondents, we find an unequivocal, direct and positive statistical association between project complexity and delays and overspending. Further, we show that team-level absorptive capacity is critical for successful project management, but also that absorptive capacity can only partially offset the harmful impact of project complexity. Beyond adding to project management theory, the paper contributes to the wider management literature. We establish complexity as an antecedent of absorptive capacity and demonstrate how each dimension of absorptive capacity has unique determinants and outcomes.     

An empirical investigation on how portfolio risk management influences project portfolio success

Project risk management is recognized as essential in order to cope with the challenges arising from the environment. Literature suggests a portfolio-wide perspective for managing risks in project portfolios. However, research on risk management and its success in a project portfolio context is scarce. This study examines how portfolio risk management influences project portfolio success. Using a sample of 176 firms, this study provides evidence that portfolio risk identification, the formalization of the portfolio risk management process, and risk management culture directly influence risk transparency, whereas risk prevention, risk monitoring, and the integration of risk management into project portfolio management are directly connected to risk coping capacity. The findings also suggest that both risk transparency and risk coping capacity have a direct impact on project portfolio success. However, the results did not confirm the hypothesis that risk transparency and risk coping capacity have a complementary effect on success. Implications for scholars and project portfolio managers are discussed.     

Strategic change towards cost-efficient public construction projects

The cost of public construction projects is a central topic in project management. However, studies have primarily focused on cost at the project level, not on cost management at the portfolio level. In this paper, we take the perspective of a government agency, conducting a strategic initiative to increase cost-efficiency in their portfolio of construction projects. We use an action research approach to investigate the dynamics of the initiative and the implementation of resulting actions to achieve lasting change towards cost-efficiency. Co-creating actions for cost-efficiency together with the project teams was important for the success of the strategic initiative. For successful implementation, alignment of the objectives of the initiative with organizational strategy, and knowledge transfer between projects is central. This study expands the project management literature regarding strategic cost management of portfolios of construction projects and provides practical guidance for organizations.     

Is strategy being implemented through projects? Contrary evidence from a leader in New Public Management

This paper reports on the effectiveness of the project management and investment frameworks in the State of Victoria. It finds project management and investment practices comparable to best practice but also finds 100 billion dollars invested in projects over the past decade without any evidence of improvement in strategic goals. It concludes that there may be systemic deficiencies in our project management and investment frameworks. It suggests that deficiencies in the way projects are currently selected and managed limit the capability to realise strategic goals. Future research to develop programme management, portfolio management and project governance is recommended to increase the likelihood that strategy will be implemented.     

A history of project management models: From pre-models to the standard models

The basis of project management theory includes, as is the case of many management theories an “articulated collection of best practices”, drawn for the most part from the study of major North American engineering projects. There is no history of project management comparable to the ones that have been produced for marketing, accounting or strategic analysis. Very few historians have studied projects as a specific activity and academics in project management are rarely specialists with archives or have familiarity with historical reasoning. Defining the historic trajectory of project management implies specifying the scope of what this history includes beforehand. To write a history of project management we must specify the object of this “historicization”. What are we dealing with when we talk about “history of project management”? A first objective of this paper is to define object and scope of this history. The author suggests a difference between “managerial practices” and “management models” and recommends writing a history of models rather than a history of singular practices. A second objective is to sketch the transition between pre-models of project to the standard North American model.     

Contemporary project portfolio management: Reflections on the development of an Australian Competency Standard for Project Portfolio Management

Project portfolio management is an emerging aspect of business management that focuses on how projects are selected, prioritised, integrated, managed and controlled in the multi-project context that exists in modern organisations. Competency standards have been developed by professional bodies for project managers. However, to date there has been no attempt to develop a competency standard at the portfolio management level. This paper examines the process for development of the first performance-based competency standard for project portfolio management and identifies how this contributes to the body of knowledge in both project portfolio management and project management more broadly. The intent is to use the Standard to improve project portfolio management capability and practice in organisations, which in turn promotes efficient resource use and more profitable project outcomes. Specific issues regarding Australian practice are described, along with implications for how this may impact Australian practice in the future.     

HRM in project groups: The effect of project duration on team development effectiveness

The literature has found contradictory results regarding the impact of human resource management on project success. This paper focuses on one important human resource management process – team development – to investigate its importance in the project environment. Results show that most team development practices that work well in the operational business environment do not have a significant influence on project success. However, project duration was found to moderate the relationship between team development and project success: the effectiveness of team development increases in longer projects. The paper identifies and analyzes team development practices that have a positive impact on project success exclusively in long projects.     

The influence of business strategy on project portfolio management and its success — A conceptual framework

Firms are facing more difficulties with the implementation of strategies than with its formulation. Therefore, this paper examines the linkage between business strategy, project portfolio management, and business success to close the gap between strategy formulation and implementation. Earlier research has found some supporting evidence of a positive relationship between isolated concepts, but so far there is no coherent and integral framework covering the whole cycle from strategy to success. Therefore, the existing research on project portfolio management is extended by the concept of strategic orientation. Based on a literature review, a comprehensive conceptual model considering strategic orientation, project portfolio structuring, project portfolio success, and business success is developed. This model can be used for future empirical research on the influence of strategy on project portfolio management and its success. Furthermore, it can easily be extended e.g. by contextual factors.