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.     

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.     

改进的多项目交互组合选择优化模型

项目组合选择（ProjectPortfolioSelection,PPS）是多项目管理中的一个重要的决策问题。从大量的候选项目中选出最优的项目组合非常困难,尤其是项目间存在交互作用。以往很多研究考虑了两两交互的项目组合选择问题,但在考虑3个或者3个以上项目间的交互作用时存在缺陷。提出一个改进的多项目交互组合选择优化模型,考虑3个或者以上项目间存在交互作用的复杂情况,并用NSGA-II算法有效地求解该模型,算例分析表明了该模型和算法的有效性。     

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.     

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.     

A decision-making framework for justifying a portfolio of IT projects

This paper presents a comprehensive decision-making framework for evaluating a portfolio of IT projects. A problem of IT project selection with and without project interdependencies is considered. The problem is subject to maximum project funding budget constraint. When IT project portfolio contains independent projects, a dynamic programming (DP) solution procedure is proposed to efficiently solve the portfolio of IT projects' problem. However, when IT project portfolio contains project interdependencies, a mixed integer programming (MIP) approach is needed to solve the problem optimally. Experiments and results using simulated data using Monte Carlo simulation are provided. The results indicate that a large set of project selection problems containing up to 60 projects can be solved easily using the proposed decision-making framework.     

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.     

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.     

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.     

Organisational routines in multi-project contexts: Coordinating in an urban development project ecology

Project management literature have focused on either intra-organisational relationships or on vertical inter-organisational relationships. The purpose of this paper is to explore inter-project interdependencies and coordinating in multi-project contexts by using the notion of project ecologies. We adopt an organisational routines perspective to explore the coordinating practices managing those interdependencies. The empirical material underpinning our findings were collected and analysed through a case study of an urban development district, new to both the project ecology literature and the organisational routines literature. The findings highlight the existence and importance of horizontal interdependencies in project ecologies, as compared to the more commonly studied interdependencies in vertical relationships within and between projects. The need for horizontal coordinating is outside project managers’ regular focus on steering vertical relationships. Accordingly, the routines to manage the horizontal interdependencies in project ecologies are different to those in more engineered routines that are often described in project management guidelines.     

Practices,projects and portfolios: Current research trends and new directions

Project portfolio management (PPM) bridges strategy and project management. Traditional research in PPM has primarily investigated the rational, top-down and structural aspects of strategizing. By doing so, it has failed to focus on the underlying practices that are triggered by the strategy and how these practices frame strategy implementation. Practice-based research provides a methodological lens to explore the reality of strategic enactment through the project portfolio. Practice-based perspectives are under-represented in PPM research; therefore the aim of this paper is to provide an agenda for further practice-based research in PPM. Central to this agenda is a concern with various aspects of practice, including its discursivity, representation, dynamic capabilities, leadership and materiality.     

Examining the role of transformational leadership of portfolio managers in project performance

Research into the role of transformational leadership in project based organisations has generally focused on project managers or senior managers and less so on portfolio managers who oversee multiple projects to achieve business objectives. This study examines the impact of transformational leadership behaviour of portfolio managers on project performance directly and indirectly through other intervening variables such as climate for innovation and innovation championing. Using a questionnaire survey, data were obtained from 112 project managers in a UK project based organisation. Transformational leadership behaviour of portfolio managers was found to have a positive and significant relationship with project performance. Innovation championing and climate for innovation both partially mediated the relationship between transformational leadership and project performance. The study confirms the importance of portfolio managers in enhancing project performance and identifies the need for project based organisations to cultivate transformational leadership behaviour among them for enhanced performance. It also highlights the need for further exploration of the role of portfolio managers in improving project performance.     

Modeling project criticality in IT project portfolios

Today's IT project portfolios (ITPP) contain many projects and varied interdependencies. Depending on a project's criticality to the ITPP, a failure can have massive consequences. However, existing methods usually only assess overall project portfolio risk and do not account for the criticality of single projects and their dependencies. Applying Bayesian network modeling to ITPPs, we bridge this gap and extend the current body of knowledge for the information systems and project management literatures. Our new method analyzes single projects' criticality in a portfolio context by considering both transitive dependencies and different dependency types in an integrated way. Since we demonstrate that single projects' criticality can vary substantially, being aware of which projects are critical is a key success factor for ITPP management. For practitioners, our method provides a straightforward procedure to enhance ITPP risk management.     

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.     

Formalization of project portfolio management: The moderating role of project portfolio complexity

Companies frequently implement formalization to improve success. Previous research has found supporting evidence for the performance-enhancing effects of formalization in both single project management and project portfolio management. However, there is no research on how formalization at the project level interacts with formalization at the portfolio level, or on how this interaction may impact success. This study investigates the interaction of formalization at both levels and examines the moderating effect of project portfolio complexity on formalization. Using a sample of 134 firms, this study shows that single project management formalization and, likewise, portfolio management formalization are directly connected to portfolio success. Simultaneous formalization at these two levels delivers a complementary effect, resulting in an increase in success that is more than additive. A contingency analysis confirms that the proposed positive effects become more prominent if complexity is high. Complexity measured as project interdependency has a stronger moderating effect than complexity measured as portfolio size.     

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.     

A methodology for selecting portfolios of projects with interactions and under uncertainty

Effective project evaluation and selection strategies can directly impact organizational productivity and profitability. Numerous analytical techniques ranging from simple weighted scoring to complex mathematical programming approaches have been proposed to solve these problems. However, traditional project selection methods too often fail to consider both the uncertainties in projects and the interaction among projects. Some prior studies have considered the interaction among projects in deterministic environments. Others have dealt with stochastic environments but have not considered project interdependencies. This study aspires to fill this gap in the project portfolio selection literature. Information system/information technology (IS/IT) projects are used in this study because they are frequently subject to uncertainties due to estimation difficulties and bounded by interactions due to technological interdependencies. We use Data Envelopment Analysis (DEA) to select the best portfolio of IS/IT projects while taking both project uncertainties (modeled as fuzzy variables) and project interactions into consideration simultaneously. We also present a numerical example to demonstrate the applicability of the proposed framework and exhibit the efficacy of the procedures.     

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.