Best Practices for Project Portfolio Selection
Abstract
Almost any larger company nowadays must have a succesfull Project Portfolio Management (PPM) in order to preserve a positive revenue. PPM is essential to ensure that a company chooses the right projects to pursue, however it is not always as straightforward as it might seem to choose the best fit projects. In fact is it very challenging to choose which projects to have in a company's portfolio. Coopers et al. (2001) analysis has concluded that there are five dominant methods or tools that a larger amount of organisations uses to ensure a good Project Portfolio Management. These methods or tools consists of [1]:
- Financial methods, includes financial key figures.
- Business strategy, defines the strategy for allocating financial ressources.
- Bubble Diagram, plots project in a X-Y coordinate where several factors are relevant for determine a projects worth.
- Scoring Models, sums up a projects score from a range of criteria.
- Checklists, uses yes/no questions related specifik to the company.
A combination of one or more of the methods and tools can be seen as best practices within Project Portfolio Management.
The aim of this article is therefore to enlighten the Project Portfolio selection methods and tools and their best practices. Furthermore will this article describe the limitations and benefits of these best practices and how they can complement each other.
References
- ↑ Cooper, R.G., Edgett, S., Kleinschmidt, E. Portfolio management for new product development: results of an industry practices study, October 2001
