Advancing the maturity of project portfolio management through methodology and metrics refinements
Creators: name: Arlt, Mario
Publisher: name: RMIT University
Year: 2024

description: This thesis presents enhancements to the theory of and practices in project portfolio management, specifically in refinements to methodology, measurement and alignment with strategic planning.<br><br>Project portfolio management is the practice for evaluating, selecting and managing in an integrated manner a portfolio, which consist of projects, programs and other related work. Several studies on current practices in portfolio management have indicated a rather low maturity level of organizations in regard to project portfolio management. From the perspective of theory, this appears to be both the result of a relatively immature discipline and a rather technical approach to what is a human decision problem. Whereas salient literature focuses on portfolio management as a constrained optimization problem, it is suggested that it is necessary to define the complexity challenge of portfolio management beyond the mathematical aspect. In this respect, the managerial aspect of dealing with uncertainty and dynamic goals and constraints, the process aspect of an iterative and complex business problem and the behavioral aspect characterized by cognitive limitations, bounded rationality and political bias need to be captured. <br><br>This thesis addresses several of these complexity aspects, which are based on knowledge from the project management discipline, as well as other scientific disciplines, specifically decision, behavioral and management science.<br><br>Contributions to theory and practice of project portfolio management focus on several areas. The author lays out a five-step approach toward defining the most suitable methodology for the selection of portfolios from the numerous methods and techniques that have been discussed in current literature. Although most of the methods described in the prevailing literature take a project-centric approach toward portfolio evaluation and selection, the author attempts to articulate a more holistic view by emphasizing interdependencies between projects within a portfolio. Following this notion, five types of interdependencies are proposed, and methods and techniques for identifying and addressing these interdependencies are introduced.<br><br>A second theme of this thesis is the adequate selection of metrics for both outcomes and process. Even though several debates exist in management science about how, how much and what to measure, little attention has been given to the measurement topic in association with project portfolio management. This is surprising, inasmuch as portfolio management can provide a qualitative and quantitative sanity check for the attainability of strategy, the need for resources and funds to implement certain strategic themes as well as other critical information. Rather than taking a prescriptive approach toward metrics, the author focuses on a simple metrics taxonomy and the tools to develop and evaluate metrics for their relevance, quality and viability.<br><br>Lastly, this work discusses the reconciliation of potential misalignments between strategy and project portfolios, and achieving strategic alignment beyond the top-down view of strategic fit.<br><br>The five propositions introduced by the author are validated with the help of a case study and a human subject experiment