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    Effectiveness in Project Portfolio Management
    Effectiveness in Project Portfolio Management
    Effectiveness in Project Portfolio Management
    Ebook79 pages57 minutes

    Effectiveness in Project Portfolio Management

    By Peerasit Patanakul, Audrey Curtis and Brian Koppel

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    About this ebook

    Join project management researcher-practitioners from Pennsylvania State University and the Stevens Institute of Technology as they go inside five different organizations from across the business spectrum in search of the answers. These dramatically different organizations, which ranged from financial services and telecommunications, to technology and government-based R&D, all shared one thing: the reliance upon effective project portfolio management for their success. In this landmark study, researchers were granted unprecedented access to reams of internal project documentation and hours of one-on-one time with key personnel, from C-Suite and project management executives to front-line staff. This enabled the team to assemble the inside story of how project portfolios were actually managed in each of these organizations, and identify what worked and what didn't. Using this understanding and a comprehensive literature review as a foundation, they created an empirically grounded definition of project portfolio management effectiveness that can be applied to organizations of all kinds. They were then able to identify the five critical process, organizational, and human factors that impact project portfolio management effectiveness and propose common-sense criteria for accurately measuring it.
    LanguageEnglish
    PublisherProject Management Institute
    Release dateMay 1, 2013
    ISBN9781628251357
    Effectiveness in Project Portfolio Management

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      Book preview

      Effectiveness in Project Portfolio Management - Peerasit Patanakul

      program.

      Chapter 1

      Introduction

      This study was conducted to investigate PPM effectiveness in real-life business settings in order to propose a definition of PPM effectiveness, identify factors impacting PPM effectiveness, and propose criteria for measuring such effectiveness.

      4/11/2013

      Current Research on Project Portfolio Management Effectiveness

      Project portfolio management (PPM) has been practiced in many organizations as an approach to coordinate a portfolio of projects or programs, to achieve specific organizational objectives (PMI, 2008). A typical goal of PPM is to ensure that an organization is doing the right work rather than doing the work right (PMI, 2008). From industry practices, Cooper, Edgett, & Kleinschmidt, (2001) suggest that the maximization of portfolio value, portfolio balance, and strategic alignment are the typical goals of PPM for new product development.

      To accomplish PPM goals, several authors have proposed PPM frameworks, which include those for project portfolio selection (Archer & Ghasemzadeh, 1999) and management of portfolios in different settings (Kendall & Rollins, 2003; Rad & Levin, 2005; Rajegopal, McGuin, & Waller, 2007). Early research on PPM methodologies focused on R&D project/portfolio selection and evaluation (Bard, Balachandra, & Kaufmann, 1988; Chiu & Gear, 1979; Golabi, 1987; Khorramshahgol & Gousty, 1986; Madey & Dean, 1985; Spharim & Szakonyi, 1984). This trend continues and methodologies have been developed for different settings and conditions, such as a specific decision support system to identify an optimal project portfolio mix under uncertainty for information system projects (Kira, Kusy, Murray, & Goranson, 1990), a model for optimizing interdependent projects over multiple time periods (Dickinson, Thornton, & Graves, 2001), and a model for interactive R&D portfolio analysis dealing with project interdependencies and time profiles of multiple objectives (Stummer & Heidenberger, 2003). Besides the methodologies proposed in a form of mathematical models discussed above, several authors suggested simpler methodologies for PPM that include economic/financial models such as payback period, net present value, bang for buck index, productivity index, profitability index, and expected commercial value (Cooper et al., 2001; PMI, 2006; Rajegopal et al., 2007). Scoring models were also proposed for project selection and evaluation, while bubble diagrams were suggested for portfolio balancing. Product and technology roadmaps and strategic buckets were suggested in part for strategy-portfolio alignment (Cooper et al., 2001). The stage-gate approach was also proposed for portfolio management (Cooper, Edgett, & Kleinschmidt, 2002).

      While some of the PPM frameworks and methodologies, including a standard for PPM (PMI, 2008), have been widely practiced, a simple question asked by practitioners is whether or not their PPM is effective. In the literature, research on PPM effectiveness is still limited. Several studies were conducted on PPM efficiency and performance (Blomquist & Muller, 2006; Martinsuo & Lehtonen, 2007). Even though the understanding of PPM efficiency is beneficial, the comprehension of PPM effectiveness cannot be overlooked. The use of the proposed frameworks and methodologies may be the means for achieving PPM effectiveness; however, one will not know until PPM effectiveness is defined. The objective of this study is to investigate PPM effectiveness from a real-life business setting in order to propose a definition of PPM effectiveness, identify factors impacting PPM effectiveness, and propose criteria for measuring such effectiveness. A case-study research methodology was employed. To establish a better understanding of effectiveness in an organizational context, the literature on organizational, team, and project management effectiveness was reviewed and summarized in the following section.

      Literature on Effectiveness

      In the literature, effectiveness has been the center of attention of several scholars of management research. Several studies have been conducted to investigate effectiveness at the organizational and team levels. An attempt to define organizational effectiveness dates back to the Scientific Management approach of Frederick Taylor (1911) who perceived organizational effectiveness in terms of production maximization, technical excellence, and optimal utilization of resources. Taking the human relations’ view, several researchers refer to effectiveness as productivity through employee satisfaction (Likert, 1961; Mayo, 1933; McGregor, 1960). From the strategic management and design perspective, organizational effectiveness is viewed with respect to structure/strategy congruence, competitive attainment, and environmental control and flexibility/adaptation (Chandler, 1962). Later, researchers focused on using multiple perspectives to determine

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