Title: Construction of project portfolio considering efficiency, strategic effectiveness, balance and project interdependencies
Authors: Baris Canbaz; Franck Marle
Addresses: Ecole Centrale Paris, Laboratoire Genie Industriel, Grande voie des vignes, 92295 Chatenay-Malabry, France ' Ecole Centrale Paris, Laboratoire Genie Industriel, Grande voie des vignes, 92295 Chatenay-Malabry, France
Abstract: This paper aims at providing project office managers or portfolio-level decision-makers with an integrated methodology to guide the portfolio selection process. The issue is to define a selection algorithm which is simultaneously built on a sound theory and remains practically manageable. The originality is to integrate project interdependencies at different levels, both in the objective function (both inputs and outputs) and in the definition of new constraints that ensure the portfolio balance and effectiveness. The portfolio construction problem is formalised and resolved with constraint satisfaction problem techniques. We show on a numerical fictitious example that results are significantly different considering or not project interdependencies. Some portfolios may be declared unfeasible and excluded from decision alternatives, and key values, like global revenue, may drastically change because of synergies or cannibalisations between projects. Our approach improves the performance of portfolios and increases the accuracy forecast between the expected outcomes and the actual ones, since interdependencies are modelled in a way which is closer from reality.
Keywords: project management; project portfolio selection; project interactions; nonlinear programming; constraint satisfaction; efficiency; strategic effectiveness; balance; project interdependencies.
International Journal of Project Organisation and Management, 2016 Vol.8 No.2, pp.103 - 126
Received: 01 May 2013
Accepted: 22 Nov 2013
Published online: 06 May 2016 *