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Abstract:
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Innovation projects are increasingly important to organisational survival. Large sums are invested in projects to develop
new products and services, however a significant proportion of these are not successful. Project management methods
have become a standard part of innovation processes and a variety of tools are available for the management of
innovation projects. However, the awareness and application of project portfolio management practices is less
established. "Project Portfolio management" is a term used for the methods employed by organisations with new
product innovation programs to ensure that resources are most effectively alIocated among projects. By ensuring that
the best projects are selected for development, project portfolio management methods aim to improve the success rates
of innovation projects.
This paper presents the results of a survey from a joint research project conducted by the University of Technology,
Sydney, Macquarie Graduate 'School of Management, North Ryde, and McMaster University, Ontario. Canada. The
project investigated the project portfolio management practices in Australia and draws upon earlier research in North
America alIowing direct comparison of project portfolio management practices in the two regions. The research project
also extends the scope of the previous research to include project portfolio management practices for both service
product projects and manufactured product projects. In addition, data on the resulting new product success rates has
been collected to provide indications about which new product project portfolio management practices are linked with
new product success.
Sixty Australian organisations participated in the research survey and provided details of the project portfolio
management methods they use, their attitudes and satisfaction levels, and their resulting portfolio performance and new
product success levels. The results were analysed to determine which project portfolio management methods were most
commonly used, which had influence on outcomes, and whether there was a difference between the methods used by
organisations with primarily service development projects and those that focus on projects for the development of
manufactured products.
The survey has reinforced results from previous research confirming that one of the biggest challenges for project
portfolio management is to help organisations select the appropriate number of projects for their resources. Financial
and strategic methods and criteria dominate portfolio decision-making; however strategic methods and or portfolio
maps have the strongest positive influence on portfolio performance measures. The paper identifies areas for future
research and improvement of professional practice. |
