Strategic decision-making in portfolio management: developing guidelines for project selection and prioritization
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School of Science |
Master's thesis
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Date
2024-09-25
Department
Major/Subject
Strategy
Mcode
Degree programme
Master's Programme in Industrial Engineering and Management
Language
en
Pages
82
Series
Abstract
Project portfolio management is a practice that aims to align a project portfolio of an organization to its strategic vision and objectives. When successful and effective, PPM contributes positively to business success. The need for established PPM and the optimal PPM processes and methods vary between organizations. This thesis explores the practice of PPM and develops a tailored approach for a single case company on how it could improve its PPM in terms of structure, transparency, and efficiency. Where traditional project management focuses on individual projects, project portfolio management handles larger entities of projects, considering which individual projects are the right ones for an organization to invest in. In the centre of PPM is the formalized activity of project selection and prioritization, in which ongoing projects and new initiatives are evaluated and prioritized for resourcing. Recent literature highlights that in the activity, many diverse evaluating dimensions need to be taken into account to ensure transparent and well-structured decision-making between projects. Recent research also shows that practicing PPM has its unique challenges. Theory and different models do not often match the real-world practice, and organizations struggle with uncertainty, complexity, and informality affecting the decision-making. The findings from the empirical part of the thesis complement the existing research by highlighting the importance of formalized and enforced PPM approach. Also, as the process includes multiple stakeholders from top management to project management, the findings emphasize the importance of role clarity and stakeholder collaboration to achieve holistic and balanced decisions. The results also show that continuous and multidimensional business case control is an important part of PPM, especially in project selection and prioritization. To keep the process from becoming too complex and slow, portfolio size should be maintained closely. The findings of the thesis are applicable especially to large organizations that already have an established PPM practice that manages a complex multi-project environment involving numerous stakeholders.Description
Supervisor
Vuori, TimoThesis advisor
Lehtinen, InariKeywords
portfolio management, project portfolio management, project selection, project prioritization, strategic decision-making, PPM