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Agile Project Portfolio Management Challenges

An Exploratory Case Study of Product Development Projects in the Automotive Industry

Written by Oliver Back, Emir Isakovic

Paper category

Master Thesis

Subject

Business Administration>Management

Year

2018

Abstract

Master Thesis: There are multiple definitions of legacy project portfolio management, including different important factors related to PPM. Levine (2005, p.70) introduced a commonly cited definition: "PPM is a set of processes, supported by people and tools, used to guide companies to choose the right project and the right number of projects, and maintain a project portfolio. Projects. It will maximize the company’s strategic goals, effective use of resources, stakeholder satisfaction and bottom line.” This is the definition adopted in this paper and guides our basic understanding of PPM. Project portfolio management originated in the financial sector, in which the risk and return of assets are weighed against each other to create a portfolio that optimizes the collective return of investment (Markowitz, 1991). This concept has long been used in multi-project management (Gibson & Nolan, 1974). Although it was centered on the balance of risk and return (Blichfeldt & Eskerod, 2008), it quickly developed into a broader set of tools and The process deals with scope issues that arise as the complexity of the project portfolio increases. Reaching advanced goals PPM is more than just tools and processes today. It is about the transition from being completely project-oriented to being aware of higher-level goals (Levine, 2005). Many organizations try to use PPM to facilitate the project management process to achieve specific company goals (PMI, 2008). It has been determined that a formal project management process is a prerequisite for the successful implementation of PPM (Brown & Eisenhardt, 1995; Dietrich, 2006; Martinsuo & Lehtonen, 2007; Teller et al., 2012). According to Cooper et al. (2001), the most important goal to be achieved is to maximize the financial value of the investment portfolio, strategically adjust and balance the investment portfolio. Various other factors have been considered by different authors, and the goal of subsequent paragraphs and subsections is to guide readers to the important aspects of PPM. Finally, given the background of this paper, the flexibility of the topic is evaluated. Therefore, it is possible to assess what challenges are facing in the future and how the organization can use its PPM to respond more quickly to external dynamics. By doing so, the organization can achieve a certain degree of resource flexibility, thereby achieving strategic adjustments and coordination of collaborative efforts in a way that allows the organization to achieve its goals (ibid.). PPM target Cooper et al. (1997, 2000) pointed out that the most common goals for organizations using PPM are: value maximization, portfolio balance and strategic adjustment. Cooper et al. (2001) is based on these three themes, but also emphasizes the importance of adopting a systematic approach to continue/terminate decisions, as well as focusing on appropriate high-value projects. Cooper et al. (ibid.) Increase this insight by emphasizing the importance of having the correct number of active items. One of the most important factors of PPM proposed by Cooper et al. (Ibid.) is to maximize the value of the investment portfolio (see also Killen & Hunt, 2013; Levine, 2005; Meskendahl, 2010; Pennypacker & Dye, 2002). Given the background introduced in this paper, the goal is to evaluate the case company’s current use The PPM method is to maximize the long-term value of the investment portfolio by considering the dynamic factors of the external environment. Traditionally, the emphasis on value maximization implies financial or business value, and managers tend to place such value above market and technical value. Recently, the literature has adopted a broader and longer-term value perspective, taking into account concepts such as ecology, social issues, health and safety, social impact, and learning and knowledge development. This strategic value is not immediately available, is usually intangible, and difficult to express in financial terms (Sanchez and Robert, 2010). The impact of these so-called non-commercial values ​​on traditional financial and commercial values ​​may be crucial in the short term. Nevertheless, the measurement of non-commercial value should be included in the framework of project portfolio success (Martinsuo & Killen, 2014). This may also affect the view that portfolio management is viewed as a political process of negotiation and bargaining (see Martinsuo, 2013; Christiansen & Varnes, 2008), as it mainly involves formal measures and frameworks (Martinsuo & Killen, 2014). Therefore, it has been found that stakeholder management is essential for successful PPM (Aaltonen, 2011; Assudani & Kloppenborg, 2010; Beringer et al., 2013). A recent study (Patanakul et al., 2012) emphasized the importance of post-Cooper values ​​in pursuing the definition of PPM effectiveness, incorporating “[management] projects into investment portfolios to increase transparency, process consistency, visibility, and availability. Predictive project portfolio projects and promote the integrity, cohesion, and morale of the project management community." Scholars usually construct their own portfolio success metrics, but most of them are based on the PPM goals provided by Cooper et al. (2001). They studied the correlation between portfolio approach and portfolio success. Read Less