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.     

Enforcing strategic fit of project portfolios by project termination: An empirical study on senior management involvement

Project portfolios are vehicles for strategy implementation. Senior management should terminate projects no longer conforming to corporate strategy in order to ensure strategic fit. This paper investigates how rigorous termination of bad and troubled projects affects portfolio effectiveness and senior management's decisive role in this context. We introduce the concept of project termination quality, analyse its consequences for strategic fit and how it is affected by senior management involvement. Using a quantitative longitudinal study of a sample of project portfolios, we show that termination quality positively affects strategic fit. We also show a positive, but inverted u-shaped relationship between senior management involvement and termination quality. We conclude that there is an optimal degree of involvement, beyond which an additional involvement of senior managers results in negative effects.     

Impact of relationship value on project portfolio success — Investigating the moderating effects of portfolio characteristics and external turbulence

Companies today need project portfolio management (PPM) to cope with the increasing number of projects and use it to ensure comprehensive management, strategic alignment, and efficient use of resources. Moreover, customers are demanding more value from their suppliers. The management of a project portfolio and the corresponding customer relationship portfolio implies a link between PPM and relationship management. By combining the fields of PPM and marketing, this study hypothesizes a connection between relationship value and project portfolio success. Because both parties need to extract value from a relationship, relationship value is divided into relationship value for the customer and relationship value from the customer. The results are based on a cross-industry sample of 174 German, Swiss, and Austrian medium-sized and large companies and rely on two informants from each firm. We find a significant relationship between relationship value and project portfolio success as well as moderating effects of portfolio interdependency, portfolio size, and technological turbulence.     

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.     

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.     

Advancing project and portfolio management research: Applying strategic management theories

This paper focuses on the application of strategic management theories to Project Management and Project Portfolio Management research, specifically the Resource-Based View, Dynamic Capabilities, and Absorptive Capacity. A literature review and four research experiences illustrate the advances achieved through the use of these three theoretical perspectives, and contribute to the development of this field by providing examples and guidance for theory development and future research. Commonalities between the research examples include a strong strategic focus, recognition of the importance of knowledge and learning, and research questions seeking understanding and explanation. These research experiences outline the successful application of strategic management theories to a wide range of contexts, using diverse methodologies at a variety of levels of analysis. The findings indicate a broad potential for further fruitful research stemming from the relatively recent application of strategic management theories to Project Management and Project Portfolio Management research.     

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.     

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.     

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.     

The integration of ideation and project portfolio management — A key factor for sustainable success

Effective management of single projects is no longer sufficient. In today's business market, proactive management of the whole project portfolio has become increasingly important for achieving long-term success and competitive advantage. At the front end of projects, opportunities are discovered, ideas are created, and the foundation for later project, portfolio, and, eventually, corporate success is laid. This paper contributes to the project management body of knowledge by combining the front end view on projects with the holistic view of managing project portfolio landscapes. It focuses on establishing a framework for conceptualization of the relationship between ideation and project portfolio management in product development environment by relating ideation portfolio management, front end success, and project portfolio success, and lays the groundwork for further empirical research. The overarching topic I address is the conceptualization of how ideation can facilitate and sustainably improve portfolio success in the product development environment in the long-term.     

Project portfolio management in practice and in context

Companies struggle with the sub-optimization and changes among their projects, even if various normative instructions and good practices have been introduced for project portfolio management. At the center of this paper is the need to understand project portfolio management in practice and in context. The purpose is to report a review on recent empirical research literature regarding project portfolio management, to draw attention to the limitations with viewing portfolio management as a rational decision process, and to develop new avenues for research regarding project portfolio management in practice and in context. As a result, this paper shows that, to respond to uncertainties and complexities in business environments, project portfolio management can be viewed as negotiation and bargaining and as structural reconfiguration, besides rational decision processes. These alternative perspectives offer new insight into the dilemmas identified in day-to-day project portfolio management and open up avenues for resolving them, thereby promoting success in project portfolio management.     

Exploring the roles of portfolio steering committees in project portfolio governance

Governing project portfolios engages different actors in organizations including portfolio managers, portfolio officers, top managers, and others who may team up as portfolio steering committees. While portfolio steering committees play a regular role in project portfolio governance, their role is still unclear. Through an in-depth multiple case study in three Danish companies, the roles of portfolio steering committees were explored. The results showed that portfolio committees may play three distinct roles in portfolio governance: a) communication and consolidation role, b) negotiation role, and c) decision making role. The results challenged the notion that portfolio committee meetings are the place and time to make collective decisions on the portfolio, rather, portfolio steering committees might unintentionally become or intentionally be used for other purposes than decision making. The empirical evidence of the study proposes that these three roles might be related to two governance design factors: frequency and duration of committee meetings.     

Project portfolio management: An integrated method for resource planning and scheduling to minimize planning/scheduling-dependent expenses

It is well known that the progress of R&D projects has more and more begun to rely on the availability of individual experts who are generally scarce and expensive. The matrix structure considers periodic staffing of project teams which has been found to be efficient for non-scarce human resources but is impractical for individual experts. Our objective is to develop and evaluate an alternative approach for resource planning and scheduling that might be useful for project portfolio management. The method we suggest is an extension of a recently developed optimization model for a job-shop with several machines and chance-constrained deliveries. Our method determines in advance the hiring and releasing points of individual experts that maximize economic gain subject to chance-constrained delivery commitments. For this purpose, we use a simulation based on a greedy priority dispatching rule as well as a cyclic coordinate descent search-algorithm. A benchmarking of the staffing of project teams and the integrative methods shows that integrated planning and scheduling is a very useful tool for the decision-making process in project portfolio management.     

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.     

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.     

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.     

The integration of CPM and material management in project management

The problem of scheduling a project for which expensive, long-lead inventory items have to be ordered from outside vendors is addressed. A logic aimed at minimizing the cost of such projects is presented along with an illustrative example. The logic is based on adding a material management module to the CPM analysis, evaluating the feasibility of the CPM schedule, and rescheduling the project in case long-lead items make the schedule generated by CPM infeasible. An attempt to integrate CPM and material management in a large-scale construction project is reported and possible extensions of this research are suggested.     

Measuring the efficiency of project control using fictitious and empirical project data

Dynamic scheduling refers to the integration of three important phases in the life cycle of a project: baseline scheduling, schedule risk analysis and project control. In this paper, the efficiency of controlling a project is measured and evaluated using a Monte-Carlo simulation study on fictitious and empirical project data. In the study, the construction of a project baseline schedule acts as a point-of-reference for the schedule risk analysis and project control phases. The sensitivity information obtained by the schedule risk analyses (SRA) and the earned value management (EVM) information obtained during project control serve as early warning control parameters that trigger corrective actions to bring projects back on track in case of problems. The focus in this paper lies on the time performance of a project, and not on the prediction and controlling of the project costs.     

Multiproject lineage management: Bridging project management and design-based innovation strategy

Innovation-based strategies are widely recognized as key drivers to maintain competitive advantage. The design and strategic literature underline the possibility of triggering a multiproduct value-expansion dynamic based on the creation of new concepts dynamically twinned with corporate strategy. However, the multiproject-management literature—portfolio, program, and platform—lags behind and remains focused on ex ante coordination, resource allocation and selectionism. Thus, there are still few indications of the processes that stimulate and orient continuous, profitable multiproject creative expansion. Bridging the multiproject-management literature and design theory, we propose a model of multiproject lineage management (MPLM), which focuses on the key processes that drive exploration efforts and shape innovation trajectory. We conduct a multiple longitudinal case analysis in the automobile sector. Based on this analysis, we expose the principles of MPLM, mapping the roles of corporate, program and project management within a global expansion project. Finally, we highlight our contributions to managerial practices and the related literature.