Scoring models were also proposed for project selection and evaluation, while bubble diagrams were suggested for portfolio balancing. In addition to the methodologies proposed in the 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, expected commercial value, etc. This trend still continues, however, methodologies were 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). Early research on PPM methodologies focused on R&D project/portfolio selection and evaluation (e.g., Chiu & Gear 1979 Spharim & Szakonyi 1984 Madey & Dean 1985 Khorramshahgol & Gousty 1986 Golabi, 1987 Bard, Balachandra, & Kaufman, 1988). To accomplish PPM goals, several authors have proposed PPM frameworks, which include those for project portfolio selection (Archer & Ghasemzadeh 1999) and management of portfolio in different settings (Kendall & Rollins 2003 Rad & Levin 2005 Rajegopal, McGuin, & Waller, 2007). From industry practices, Copper, Edgett, and Kleinschmidt (2001) suggest that the maximization of portfolio value, portfolio balance, and strategic alignment are the typical goals of PPM for new product development. A typical goal of PPM is to ensure that an organization is doing the right work, rather than doing the work right (Project Management Institute, 2008).
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 (Project Management Institute, 2008). Keywords: project portfolio management, effectiveness, definition I NTRODUCTION The results of this research should provide a foundation for future studies and provide practitioners with a guideline for creating organizational conditions that promote PPM. As part of a major research initiative, 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. The lack of such research has practitioners continuing with a PPM approach that has not been measured as to its effectiveness and impact on business results.
In fact, PPM effectiveness has not been clearly defined, and the factors contributing to PPM effectiveness have not been thoroughly investigated. Abstract: While project portfolio management (PPM) has increased its significance in various business contexts, research on the effectiveness of PPM is still limited.