New Methodological Approaches To Project Portfolio Management: the Role of Interactions Within Projects And Portfolios

Project Portfolio Management (PPM) has been mainly concerned with aligning projects with corporate strategy, focusing on methodologies for project valuation, selection and ranking. The output of PPM is a collection of selected projects, ranked according to their contribution strategy. On the other side, multi-project management (MPM) is focused on operative issues, like resource allocation, scheduling and risk. In this paper, we argue that PPM and MPM decisions are closely related, as the decision to include a new project into the portfolio not only depends on its contribution to strategy or financial value, but also on how the candidate project interacts with the existing portfolio in terms of risk, schedule or cash-flow; project value should be computed taking into account the interrelation with the existing portfolio. Therefore, new methodologies should be developed in order to deal with project-portfolio interactions. In this paper we suggest a research agenda to deal with these interactions and we show the new methodological approaches we are developing within the INSISOC research group. We conclude that the composition of firm portfolio is dramatically changed when taking into account those interactions. (C) 2014 The Authors. Published by Elsevier Ltd.