Impact of Project Portfolio Management on Project Success
Supervisor : Dr. Hemanta Doloi Presented By: Iman Baradari
Table of Content Introduction Literature review: Project success Literature review: Project portfolio management(PPM) Research Aim, Hypothesis and Method Different levels of Maturity in PPM Research Results – Part 1 Research Results – Part 2 Research Results – Part 3 Conclusion Acknowledgement References
PPM definitionsNowadays Project portfolio management is considered as a strategic tool fororganizations to achieve their goals and objectives. Shehnar et al. (Shenhar, 1997) Described project and project portfolios as powerful strategic weapon in organizations to achieve their strategic plans. Project management Institute (PMI) (2008)described project portfolio management as “coordinated management of portfolio components to achieve specific organizational objectives” and concentrated on the effects of applying project portfolio management on organization in order to achieve their strategic goals. On the one hand Office of Government Commerce (OGC) (Stephen Jenner, 2011) defined project portfolio management as a collection of strategic processes to prepare the most effective business balance.
Research ReasonPPM Is always described as an approach thathelps organizations to achieve their strategies Huge amount of organizations do not have clear documented strategy plan Regarding the popular definition of PPM, many of project oriented organizations do not believe that PPM is effective for them ? Not only PPM can help organizations to achieve their goals and objectives, but also it helps them to improve their project success rate
The Organizational context of Portfolio managementIn this research the second relationship of project portfolio management isevaluated. In the other word, this theory is examined that is there any correlationbetween applying project portfolio management and Project success?
Literature Review2 different literature review are carried out in order toaccurately define Project portfolio management and projectsuccess.
Research AimThe main aim of the research isevaluating the impact of Applyingproject portfolio management on theproject success. According to ourliterature review on project successand project portfolio management,Aaron et al. (Shenhar et al., 2001) andOGC (Stephen Jenner, 2011)modelshave been selected as referencemodels of the research.
Research HypothesisManagement and Meet time and control budget Achieved goals PPM Maturity levels Resource and objectives management Project success Customer Financial Satisfaction management User satisfactionRisk management Project team satisfaction Stakeholder management Business success Benefit management Increased market share and benefit Organizational governance Prepare the future
Research HypothesisHypothesis 1: Is there any coefficient correlationbetween maturity level of applying project portfoliomanagement and project success?This Hypothesis aggregates project success criteriaand examines the correlation between projectsuccess and different maturity levels of projectportfolio management.
Research Hypothesis Hypothesis 2: Is there a coefficient correlation between maturity levels of applying project portfolio management and Meeting project time and budget as one of the most important project success criteria? Hypothesis 3: Is there a coefficient correlation between maturity levels of applying project portfolio management and Achieved project goals and objectives as one of the most important project success criteria? Hypothesis 4: Is there a coefficient correlation between maturity levels of applying project portfolio management and Customer satisfaction as one of the most important project success criteria? Hypothesis 5: Is there a coefficient correlation between maturity levels of applying project portfolio management and user satisfaction as one of the most important project success criteria?
Research Hypothesis Hypothesis 6: Is there a coefficient correlation between maturity levels of applying project portfolio management and increased market share and profit as one of the most important project success criteria? Hypothesis 7: Is there a coefficient correlation between maturity levels of applying project portfolio management and exploring new opportunities or innovations as one of the most important project success criteria? Hypothesis 8: Is there a coefficient correlation between maturity levels of applying project portfolio management and Preparing the future as one of the most important project success criteria?
Research SurveyIn order to test the mentioned hypotheses a survey is designedwith 3 sections. Section 1 Section 2 Section 3 Receiving demographic Evaluating and information about identifying the Project respondents and their Portfolio Management Evaluating the impact organization. Maturity level in the of applying PPM on Respondents’ different project organizations success criteria
Evaluating the PPM maturity levelsAccording to received data, each respondent has 7 marks for different functionsand processes of project portfolio management. The average of these marks isrounded in the SPSS software and the result assigned to the respondent’sorganization as a level of maturity. Therefore at the end of this stage all oforganizations have a level of Maturity between one and five. The distribution ofrespondents in different levels of maturity can be seen as following.
Major Results Correlation 1 Between PPM maturity levels and project success criteria3 2 Impact of Evaluating the Applying PPM Coefficient of on project determination success without considering maturity levels
Research Method Meet time and budget Achieved goalsPPM Maturity levels and objectives Project success Customer 1 to 5 -2 to +2 Satisfaction Variable 1 Variable 2 User satisfaction Significant Negative Project team impact(-2, Significant satisfaction positive impact(+2) Business success Increased market share and benefit Prepare the future
Research MethodRegarding this fact that the research aim isanalyzing the coefficient relationship betweenproject portfolio management levels and itsimpact on project success, Spearman approachhelps us to mathematically compute thedegree of association between two variables.• If R∈ [0.8, 1] or r∈ [-1, -0.8], it shows that there is a strong relationship• If R∈ (0.5, 0.8) or r∈ (-0.8, -0.5), it shows that there is a moderate relationship.• And if R∈ [-0.5, 0.5] it shows that there is a weak relationship.
Results – Part 1The following table shows the results in order to evaluate the coefficientcorrelation between applying project portfolio management and projectsuccess. Considering this fact that R is equal to 0.89 it shows that there is apositive correlation between these variables. Based on the Strong, moderateand weak correlation definition, it can be stated that there is a strong positivecoefficient correlation between project portfolio management maturity leveland project success. In other words, increasing the maturity level of projectportfolio management can lead to the project success improvement. PPM Maturity Count Impact STD R Sig Levels Means Level 1 5 0.32 0.17 Level 2 16 0.51 0.24 Level 3 15 0.51 0.23 0.89 0.001 Level 4 22 1.22 0.30 Level 5 22 1.80 0.25 1
Results – Part 1 Type of Coefficient Project success criteria title R CorrelationMeet Project time and budget 0.57 Positive ModerateAchieve project Goals and Objectives 0.71 Positive ModerateAchieve Customer satisfaction 0.82 Positive StrongAchieve User satisfaction 0.67 Positive ModerateIncrease the Market share and organization profit 0.72 Positive ModerateExplore new opportunities or innovations 0.77 Positive ModerateMake new skills and prepare for the future 0.67 Positive ModerateProject Success as a whole 0.89 Positive Strong 1
Results – Part 1 Maturity level Project success critical Level Level Level Level Level 1 2 3 4 5 The MeanMeet project time and budget 1.0 1.12 1.26 1.72 1.9 value for theAchieve business goals and objectives 0.60 0.87 1.2 1.5 2.0 impact of PPM on projectAchieve customer satisfaction 0.00 0.31 0.46 1.31 1.90 successAchieve user satisfaction 0.00 0.25 0.4 1.0 1.31 criteria inIncrease the market share and different level 0.20 0.18 0.53 0.9 1.72organization profit of maturitiesExplore new opportunities or innovations 0.0 0.12 0.46 0.95 1.72Helps to make new skills for the future 0.0 0.68 0.8 1.18 1.86 Total grade 0.31 0.5 0.73 1.22 1.77 1
Results – Part 1 2Impact of applying PPM on project 1.8 1.6 1.4 1.2 The project success 1 success trend in different PPM 0.8 maturity levels 0.6 0.4 0.2 0 level1 level2 level3 level4 level5 Maturity Level 1
Results – Part 1 the impact of PPM on project success criteria in different levels of maturity 1
Results – Part 2The impact of applying PPM without 2 considering level of maturities
Results – Part 3 Coefficient of determinationThe coefficient of determination, commonly called the “R-squared" value, formaturity level of project portfolio management and project success is calculatedthat is 79.21. It means that although there are some other factors that can effecton project success, applying project portfolio management is one of the mostimportant factors. In other words, 79% of variation in “Project success” can beexplained by variation in the “maturity level of project portfolio management”.. It means that improving the maturity level of project portfolio management ismore reliable method to improve project success rate compared to otherapproaches. 1
ConclusionThis research has 2 major outcomes. Firstly, some organizations believe that they donot need project portfolio management because they do not have clear strategyplan. But this research shows that project portfolio management not only iseffective because of the mentioned statement, but also it can be an effectiveapproach in improving project success rate.Secondly, based on results project portfolio management has less impact on 3project success criteria including achieving user satisfaction, increasing the marketshare and organization profit and exploring new opportunities and innovations. Itindicates that existing processes and functions are not effective enough to helporganization to achieve project success in these areas. Therefore this research canbe an appropriate base for further researches to analyze the new processes andfunctions or improve existing processes and functions in order to increase theeffectiveness of project portfolio management in the mentioned area.
AcknowledgementI am heartily thankful to my supervisor, Dr Hemanta Doloi, whoseencouragement, guidance and support from the initial to the final level enabled meto develop an understanding of the research. This research would never becompleted without his assistance.
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