J
Ö N K Ö P I N GI
N T E R N A T I O N A LB
U S I N E S SS
C H O O LJÖNKÖPING UNIVE RSITY
C o n t r o l , R e v i e w a n d M o n i t o r i n g o f a P r o j e c t P o r t f o l i o :
The Study of Projects in the Implementation Phase.
Bachelor Thesis within Business Administration Author: Olga Sobtsenko
Jelena Tararyko Tutor: Tomas Müllern
Acknowledgements
We would like to acknowledge our tutor Tomas Müllern for his guidance, constructive criticism and support throughout the process of writing this thesis. We also want to express our gratitude to Capgemini for their help and cooperation. Moreover, we want to thank all the people who had been of assistance to us and had influence on our work. And last but not least, we are very grateful to the organizations participating in the study carried out by Jönköping International Business School and Capgemini. The current study would not be possible without all of you involved.
Olga Sobtsenko & Jelena Tararyko
Bachelor Thesis within Business Administration
Title: Control, Review and Monitoring of a Project Portfolio: The Study of Pro-jects in the Implementation Phase.
Authors: Olga Sobtsenko, Jelena Tararyko Tutor: Tomas Müllern
Date: 2009-02-02
Subject terms: Project portfolio, project portfolio management, multi-project manage-ment, multi-project environmanage-ment, project portfolio control and monitoring, project performance criteria, project portfolio management support sys-tems.
Abstract
Introduction: A trend for organisations to change from single to multiple project
man-agement has been observed over the last couple of decades. Organizations shifted their fo-cus from single project management towards the simultaneous management of the whole set of projects as one entity – project portfolio. New multi-project settings require a new management approach and practices to successfully manage a portfolio. A common prac-tice in organizations is to evaluate projects after they had been carried out. At that point not much can be done and it is impossible to improve performance and prevent failure. Hence, problems that occur in projects’ implementation phase remain unsolved and even unidentified. Constant control, review and monitoring of projects’ performance in the im-plementation phase could lead to the problematic portfolio areas being spotted and timely management decisions being made in order to improve the overall portfolio performance.
Problem: How do organisations manage projects within a portfolio that perform poorly in
the implementation phase?
Purpose: The purpose of this thesis is: to describe to what extent and in what ways
organi-sations control, review and monitor project performances in the implementation phase; to identify if organisations use any methods, tools or techniques in order to spot projects that perform poorly according to their expectations; and to discover what happens to the poorly performing projects in the implementation phase after they were identified.
Method: An electronic qualitative questionnaire had been constructed and sent out to the
46 sampled Swedish companies currently running project portfolios. 115 most suitable re-spondents had been chosen to answer the survey.
Frame of Reference: Theoretical framework is built on the literature within project
port-folio management field, mostly concerning control, review and monitoring of projects of projects’ performance within their implementation phase; practices used to manage poorly performing projects as well as the value of organizational learning.
Conclusion: The research results show that even though majority of the studied
organiza-tions are aware and striving towards efficient project portfolio control, review and monitor-ing, a lot of space for improvement still remains. Results reveal that organizations are trying to keep track of projects’ performance within a portfolio, however, very few poorly per-forming are identified. Moreover, the management practices for underperper-forming projects are still very limited if not non-existent.
Table of Contents
1
Introduction... 1
1.1 The Empirical Context of the Thesis ... 2
1.2 Problem ... 3 1.3 Purpose ... 3 1.4 Definitions ... 3
2
Method ... 5
2.1 Research Approach ... 5 2.2 Research Strategy ... 52.2.1 Exploratory, Descriptive or Explanatory Study... 5
2.2.2 Qualitative or Quantitative Research ... 6
2.2.3 Time Horizons... 6
2.3 Primary Data Collection ... 7
2.3.1 Sample Selection ... 7
2.3.2 Data Collection Method... 7
2.4 Designing a Questionnaire... 8
2.4.1 Structure of the Questionnaire ... 8
2.4.2 Content of the Questionnaire ... 9
2.4.3 Quality and Reliability of the Questionnaire ... 10
2.5 Limitations... 11
2.6 Distribution of the Survey... 12
2.7 Data Analysis and Interpretation Methods ... 12
3
Frame of Reference ... 14
3.1 Project Portfolio Control, Review and Monitoring... 15
3.2 Control Mechanisms: Formal and Informal ... 16
3.2.1 Formal Control Mechanisms ... 17
3.2.1.1 Project Management Office (PMO) ... 17
3.2.1.2 Measuring Projects’ Time, Cost and Scope Performance (EVM) ... 17
3.2.2 Informal Control Mechanisms ... 18
3.2.2.1 Creation of Transparency and Information Flow from a Project to a Portfolio/Corporate Level... 19
3.3 Four Steps for Solving Rising Problems and Keeping Projects on Track…… ... 20
3.4 ‘Kill’ Decisions... 22
3.5 Five Steps for Managing Poorly Performing Projects... 23
3.6 Organizational Learning... 23
3.7 Model for Analysis... 24
4
Empirical Findings... 26
4.1 Organization Running a Project Portfolio... 26
4.2 Control Mechanisms (Methods/Techniques/Tools): Formal and Informal ... 26
4.2.1 Formal Control Mechanisms ... 27
4.2.2 Informal Control Mechanisms ... 30
4.3 Project Performance(s) ... 31
4.4 Poorly Performing Projects ... 32
4.5 Management of Poorly Performing Projects: Five Steps... 32
5
Analysis ... 35
5.1 Organization Running a Project Portfolio... 35
5.2 Control Mechanisms (Methods/Techniques/Tools): Formal and Informal ... 35
5.2.1 Formal Control Mechanisms ... 36
5.2.2 Informal Control Mechanisms ... 39
5.3 Project Performance(s) ... 40
5.4 Poorly Performing Projects ... 41
5.5 Management of Poorly Performing Projects: Five Steps... 42
5.6 Organizational Learning... 45 5.7 Analysis Overview... 46
6
Conclusion ... 47
7
Discussion... 49
References... 50
Appendix 1... 52
1 Introduction
The following chapter introduces the reader to the background, empirical context and problem of the area of investigation. Furthermore, this section highlights the relevance and importance of the chosen research field that will be narrowed down to the purpose of the current research paper.
A project is a temporary attempt undertaken to create a unique product or service (Project Management Institute, 2000). Many organisations use projects in order to respond to re-quests that cannot be addressed within the organisation’s normal operational limits. Thus
project management is the application of knowledge, skills, tools and techniques to project
ac-tivities to meet project requirements; and it is accomplished through the use of the proc-esses such as: initiating, planning, executing, controlling and closing (Project Management Institute, 2000).
However Dietrich and Lehtonen (2005) argue that “conventional efforts towards the effectiveness in
managing single projects,…do not suffice in today’s organisations”. Therefore a trend in organisations
to change from single project to multiple project management has been observed over the last couple of decades. “The managerial focus of firms has shifted towards the simultaneous
manage-ment of the whole collection of projects as one large entity, and towards the effective linking of this set of pro-jects to the ultimate business purpose” (Dietrich & Lehtonen, 2005). The entire set of the propro-jects
within an organisation is defined as a project portfolio. According to Archer and Ghasemzadeh (1999), researchers in the project portfolio management area: “a project
portfo-lio is a group of projects that are carried out under the sponsorship and/or management of a particular or-ganisation”.
When discussing organisations that handle project portfolios, Elonen and Artto (2003) point out that “an organisation consisting of a constantly changing mix of large and small projects
pre-sents senior management with new challenges in resource planning, prioritisation and monitoring”. This
creates an inevitable need for a management system, which would coordinate and control the different matters emerging in portfolios. As a number of studies and investigations have been carried out the researchers came across some general characteristics that could be drawn and that are common for every approach to project portfolio management meth-ods, systems and styles. A lot of researchers within this area defined project portfolio man-agement (PPM), although we believe that the definition given by Blichfeldt and Eskerod (2008) is one of the most suitable for this paper. They stated that project portfolio management is “the managerial activities that relate to the initial screening, selection and prioritisation of project
propos-als, the concurrent reprioritisation of projects in the portfolio, and the allocation and reallocation of resources to projects according to priority”. As the given definition shows project portfolio management
covers numerous aspects of organization and coordination of portfolio on different stages. Since this subject is relatively young and very complex it is hard to get a full insight and in-depth knowledge of the matter. Due to this, the amount of studies carried out is scarce.
“Multi-project contexts and temporary systems are extensively common in contemporary business. Even though influential thinkers predicted this situation decades ago, research on these multi-project settings has traditionally been sparse” (Engwall & Jerbrant, 2003). As the research in the project portfolio
management area is very limited, organizations that to any extent rely on PPM for the busi-ness processes decide to carry out their own research so as to gain more insight and clarity of the subject.
Most organizations working on a project basis concentrate on the selection and completion phases of project portfolios, while very few follow and monitor performance of projects
af-ter they had been launched. A common practice for most companies is to evaluate the pro-jects after they have been carried out. The major issue in that case is that at the stage of completion there is very little to be done to reorganise, make improvements or sort out the problems, that could have been the reason for failure. The portfolio decision process should cover or go beyond a number of decision-making processes within the business, in-cluding continuous reviews of the total project portfolio, making go/kill decisions on indi-vidual projects on an ongoing basis, and complete with strategic resource reallocation deci-sions (Cooper, Edgett, & Kleinschmidt, 1999).
Very often, management’s failure to monitor and review the projects on a regular basis dur-ing their execution phase leads to poor quality portfolios with a handful of failed projects in the end. Nevertheless, only few efficient actions are taken by the portfolio management team meaning that problems that occur in projects’ execution phase remain unsolved and even unidentified. Only control and monitoring of projects could solve the matter, causing more kill decisions to be made and resources better reallocated within a portfolio. There-fore, under funded potentially successful projects would have better chance in gaining the highest possible result and inefficient projects would not hinder the performance of an en-tire portfolio. According to one of the articles written by Cooper, Edgett and Kleinschmidt (1997), “as one frustrated manager exclaimed: ‘We talk about having a funnelling process that weeds out
poor projects;…we don’t have a funnel – we have a tunnel…ten projects enter the process, ten go into De-velopment, ten go to Launch…and one succeeds!’”.
This raises us an issue of how much attention are organizations paying to identify, review and manage projects with poor performance indicators.
1.1 The Empirical Context of the Thesis
Capgemini is one of the world’s foremost providers of Consulting, Technology and Outsourcing services. Capgemini helps businesses implement growth strategies, leverage technology, and thrive through the power of collaboration. One of the focus areas in their business consulting is Project Portfolio Management. PPM is a rather young concept in management, nevertheless, Capgemini perceives it as a potentially growing and developing business area. Some parts of PPM are still very vague and require more research and devel-opment that is why the authors decided to research on. Capgemini in collaboration with Jönköping International Business School (JIBS) are carrying out a project [Project Based Module, (PBM)] with a goal to create a framework that would allow Capgemini and JIBS to test whether Swedish organisations have the right competence, information technology (IT) tools, processes, resources and incentives/rewards, and if organisations use it to deal with their project portfolios. PBM is carried out by students with professors’ supervision. In this case, it is a project based research, which is done for Capgemini as a client of JIBS. The research for the project mentioned above is done by conducting a survey from 46 Swedish companies, after that the gathered information shall be analysed. The answers gathered from the interviewed companies would provide us only with general knowledge. The authors of this thesis would like to conduct a more thorough study about control, re-view and monitoring of ongoing projects within a portfolio in our thesis, which we believe would bring additional value to the undertaken PBM and the company. Since we will inves-tigate the issue deeper by looking into what ways organisations control, review and monitor project performances in the implementation phase, if they do, what methods, tools or techniques are used for that, and how poorly performing projects are treated after they were identified. Capgemini has shown interest in what happens with the projects after they have been launched into the portfolios, not only in selection and completion phases, to
which a lot of companies pay the most attention for. Therefore, the authors of the current thesis strongly believe that it is a great area of Project Portfolio Management to make study about.
1.2 Problem
How do organisations manage projects within a portfolio that perform poorly in the im-plementation phase?
1.3 Purpose
The purpose of this thesis is:
• to describe to what extent and in what ways organisations control, review and monitor project performances in the implementation phase;
• to identify if organisations use any methods, tools or techniques in order to spot projects that perform poorly according to their expectations;
• and to discover what happens to the poorly performing projects in the implementa-tion phase after they were identified.
1.4 Definitions
This thesis includes several definitions the reader might not be familiar with; the current section provides the reader with those definitions. Some of the terms were already men-tioned in the introduction part, nevertheless for the reader’s convenience they are also pre-sented here.
Project is a temporary attempt undertaken to create a unique product or service (Project
Management Institute, 2000).
Project management - the application of knowledge, skills, tools and techniques to project
ac-tivities to meet project requirements; it is done through the use of the following processes: initiating, planning, executing, controlling and closing (Project Man-agement Institute, 2000).
Program is defined as “a group of related projects, managed in a coordinated way to obtain benefits and control not available from managing them individually” (Project Management Institute,
2004; cited in Blomquist & Müller, 2006).
Program management is “often perceived as the top layer of a hierarchy consisting of individual projects”
(Blomquist & Müller, 2006). Goals of program management are improving effi-ciency and effectiveness through better prioritization, planning and coordina-tion in the management of projects, as well as in the development of a business focus by defining the goals of individual projects and the entire program in re-gards to the requirements, goals, drivers and culture of the wider organization (Blomquist & Müller, 2006).
Project portfolio is “a group of projects that are carried out under the sponsorship and/or management of a particular organisation” (Archer & Ghasemzadeh, 1999). It is also common to use
terms project portfolio and portfolio. The abbreviation for project portfolio is PP, which is used in the thesis as well.
Project portfolio management (PPM) is “the managerial activities that relate to the initial screening, selec-tion and prioritisaselec-tion of project proposals, the concurrent reprioritisaselec-tion of projects in the portfolio, and the allocation and reallocation of resources to projects according to priority”
(Blichfeldt & Eskerod, 2008). Instead of using the full term project portfolio
man-agement it is possible to use only portfolio manman-agement so the abbreviation is then PM, what reader will notice in the current thesis.
Implementation phase is defined by the authors as a part of project life cycle between project
launch and project close up – the phase when the project is actually being car-ried out.
Poorly performing projects. The authors define poorly performing projects as those undertaken
activities that are not performing according to organizations’ expectations and do not meet preset project objectives.
2 Method
This chapter presents research approach, strategy and method choice. Moreover, the techniques of trsut-worthiness increase of research findings as well as analysis procedures are described and explained.
2.1 Research Approach
One of the first matters the authors have considered before constructing this research is the choice of research approach. Research design can be approached from two perspec-tives – deductive and inductive.
Since project portfolio management research is rather scarce there is very little information and theories that could be used as a basis for present study. Hence deductive approach, which could be simply referred to as testing an existing or assumed theory (Saunders, Lewis & Thornhill, 2003), would not fit this research purpose well, as it is more suitable for test-ing and confirmation or contradiction to an existtest-ing theory or assumption and not creattest-ing new knowledge.
Furthermore, the aothors aim to identify new aspects and from researched cases construct a general theory concerning PPM, to be more precise control, review and monitoring of projects in the implementation phase and management of poorly performing projects in particular. Thus Inductive approach which can be viewed as building a theory and drawing conclusions based on conducted research appeared to be more suitable for chosen pur-pose. The authors believe deductive study to be more suitable for their research, because it leaves more space for interpretation and explanation of a phenomenon observed and sug-gests more flexible and innovative research results. However, as opposed to more rigid re-sults provided by a deductive research (Saunders et al., 2003), which perfectly fits authors’ aim to uncover, describe and suggest reasons behind chosen subject of matter
2.2 Research Strategy
2.2.1 Exploratory, Descriptive or Explanatory Study
Saunders et al. (2003) suggest that there are three possible research outcomes one can aim, that is, describe, explain or explore. Therefore, there are three possible ways to approach a research strategy – descriptive, explanatory or exploratory.
In order to carry out chosen research purpose completely the authors believe to approach the research with an exploratory study. Since project portfolio management as a whole is fairly little studied, the authors assume there are a lot of unknown aspects to PPM and therefore they aim not only to explain project portfolio management during the execution phase but also to identify the unknown aspects of it. As Saunders et al. (2003) note explora-tory studies usually address chosen issues of interest - questions such as What is happen-ing? Are there facts that are not know about a phenomenon? Is there a way to perceive the observed in any other way? and introduce flexibility, openness to new insights, interpreta-tions and change to the research process.
As opposed to descriptive, which is used purely to give an accurate depiction of an object or a phenomenon without enabling the researcher to comprehend and explain the reasons as to why or how the incidence occurs (Saunders et al., 2003). On the other hand, explanatory, simply providing a researcher with ways to establish causal relationships between different
parts or variables (Saunders et al., 2003), studies, the authors believe exploratory research would help fully carry out research purpose and solve the research problem. The authors reckon that any of the other two, descriptive and explanatory, studies if taken separately would be too narrow and cover only some parts of their intended research hence would enable to fulfil the research purpose only partially.
2.2.2 Qualitative or Quantitative Research
Primary data collection is strongly related to the kind of information qualitative or quantita-tive would be most suitable for the research purpose. Depending on the type of data neces-sary for the purpose research can be divided into quantitative and qualitative.
The authors of this thesis believe that quantitative research while could be of some use to carry out current research purposes does not fully enable to answer the research problem, as quantitative research is more applicable when general trends and occurrences need to be identified and quantitative data are based on meanings delivered from numbers, the collec-tion of results in numeric and standardized data and analysis conducted through diagrams, charts and statistics (Saunders et al., 2003) and the research at hand primary deals with in-formation that can not be fully analyzed and made sense of by using just statistical and nu-meric data.
Qualitative research on the other hand is based on collecting detailed in depth information
in order to deeply analyse and interpret the phenomenon and the reasons behind it. Quali-tative data collection is based on meanings collected through words and results in non-standardized data; analysis requires categorization and conceptualization (Saunders et al., 2003). As the data the authors aim to collect is rather complex and interrelated they assume a thorough and in-depth qualitative research, as opposed to a more surface quantitative, is better suited for collecting data necessary for purposes of this paper. Furthermore, qualita-tive data collection method also appears to be more suitable for inducqualita-tive research, since “induction has to do with building theory and the collection of qualitative data” (Welman, Kruger & Mitchel, 2005, p. 34), which the authors have chosen as the research approach.
2.2.3 Time Horizons
Time issue is very important when conducting a research. Most of the choices on research strategy and data collection methods depend on the research time frame.
In a case when time is unlimited or is relatively large the researcher can chose to carry out types of research that analyse a certain phenomenon over a period of time. Saunders et al. (2003) refers to this type of research as longitudinal - observing a certain phenomenon dur-ing a continuous period of time. It enables researcher to monitor development and gain in depth perception on changes of the phenomenon. The authors of the thesis consider that choosing longitudinal approach is not suitable for their research purpose, as making an as-sumption that management styles and approach to project portfolios would take long time to change and develop. Therefore, the authors do not presume continuous observations would add extra data or value to the research.
Since the research time is constrained to six months, the time frame should be considered when making decisions on various aspects of the research. In this case the phenomenon is studied at a particular time and is not continuous. This type of research is called
cross-sectional and the outcome of it is a sort of ‘snapshot’ of what is happening with the
past trends or prospect developments for the future, these can be only assumed (Saunders et al., 2003).
2.3 Primary Data Collection
2.3.1 Sample Selection
Since in the majority of research cases, it is impossible to test the entire population, a sam-ple has to be selected in order to get the needed empirical data. Samsam-ple is a group selected from target population from which the needed data will be sought (Groves, Fowlers, Cou-per, Lepkowski, Singers & Tourangeau, 2004).
Since Capgemini requested a research conducted within particular companies that are of an interest to them, the company as well provided the authors with the respondent list. The responded list had been obtained through direct conversations between Capgemini and the prospect respondents, which let the authors to expect a very high response rate, since the respondents had agreed to participate in the research beforehand. The response rate ap-peared to be approximately 82 percent, (115 out of 140) which it is believed to be indeed rather high. The fact that respondent agreed to take part in the study beforehand also al-lowed to make an assumption that the credibility and validity of results would be high, since evidently if respondents decided to take part in the study, they are interested in the results.
The sample was selected within 46 Swedish companies that are currently running project portfolios. In order for the data collected to be relevant and valid it is important that the respondents are familiar with the area of interest, thus each respondent is to an extent in-volved in project, program or portfolio management.
Since project portfolio management especially management of poorly performing projects can be a subjective and sometimes even a personal issue, due to time and effort invested in each project, multiple respondents (ranging from 1 to 6) were selected from each of the 46 companies, 140 in total. The authors of this thesis feel that multiple perspectives and com-paring responses and opinions from within the same organization will enable them to fully understand and analyse the phenomenon.
2.3.2 Data Collection Method
There are multiple ways to collect data. Different data collection methods have different advantages, disadvantages and limitations; as a result some of them prove to be more prac-tical for one and less pracprac-tical for other kinds of research and research purposes.
Hence, before deciding upon the data collection method the authors have considered the problem and purpose of this study. Since the aim is to describe how organizations manage their projects and project portfolios within the implementation phase and identify the rea-soning behind those actions, observation which usually provides no rearea-soning for the ob-served incidence selected and is not very accurate unless the phenomenon studied is very straightforward was obviously not a suitable method (Saunders et al., 2003). Interviews could provide with reliable and explicit data, suggesting new ideas or viewpoints that could have failed to notice beforehand, as well as giving the opportunity to interpret respondents’ be-haviours, body language that would give a deeper insight and meaning of the answers
(Saunders et al., 2003). However, interviews are extremely time consuming and appear to be not suitable for given the time frame and the sample size of this research.
The fact on questionnaire on the other hand would provide the authors with all the necessary empirical data needed to solve the research problem and carry the set purposes within this time frame. It allows us to get a large amount of empirical data in a more structured and faster manner and as Saunders et al. (2003) note questionnaires also allow including higher number of respondents into the research, are easier to conduct and analyse as opposed to observations or interviews, that are time consuming and fairly easy to misinterpret. Even though the authors are aware that some relevant information and insights may perhaps be omitted collecting empirical data using questionnaires, it is clear to acknowledge and deal with that downside and strongly believe it is an excellent solution to our time constrains.
2.4 Designing a Questionnaire
2.4.1 Structure of the Questionnaire
Different purposes and phenomenon need different approach to the type and collection of data, thus, when designing a questionnaire it is important to consider the type of questions that would provide empirical data the most suitable for research purpose at hand.
The main decision is to choose between closed- and open-ended questions, as the type and quality of empirical data collected and the type of further analysis strongly depends on questions’ structure. There is a significant difference in data expediency and analysis de-pending on whether respondents are free to answer whatever they see fit, given no sugges-tions or proposed answers - open-ended quessugges-tions or whether the respondents are given a number of alternatives to choose from - closed-ended questions (Welman et al., 2005).
As the phenomenon at hand is rather complex, amount of data needed is quite large and questionnaire contains great amount of questions, open-ended questions appeared to be not suitable for this research. Open-ended questionnaires are more time consuming and take long for the respondent to fill in as a lot of writing/typing is required (Saunders et al., 2003). Considering the amount of data and questionnaire size needed for the research it would be rather problematic to induce respondents to answer to lets say 50 open-ended questions. Furthermore, analysis, understanding and interpretation of open-ended survey are quite problematic, since there are no clear criteria to base the analysis on, which make trying to find relations and interdependencies between questions and further draw conclu-sions on about the issue extremely difficult.
Having considered the time frame, complexity of the phenomenon, a rather large sample size and aiming to avoid the problems discussed above, the authors have decided to design a closed ended questionnaire which is faster to fill in and less complicated when drawing conclusions, differences and commonalities in the analysis.
Closed-ended questions can be structured in few different ways in relation to techniques used when listing alternatives. Moreover, the authors have chosen to use a mix of closed-ended question types. As complexity of the research requires different kind of data col-lected using only one technique would have been inaccurate and have a negative effect on quality and clarity of the survey.
Youngman (1986; cited in Saunders et al., 2003) suggests that closed ended questions can be: List - a list of alternatives is given and the respondent can choose any of them. Category -
a set of categories are given and only one alternative can be selected. Ranking - a list of
al-ternatives that have to be placed in order of importance. Scale of rating - rating device is used to collect the data. Quantity - the response has to be a number showing an amount. And
grid (matrix) - responses to multiple questions can be collected using one matrix.
In addition, the authors chose to include list questions that provide the respondent with a list of alternatives to choose from. In this case, alternatives where only one option can be selected and also where multiple replies were possible. Being aware of that the authors might have overlooked some alternatives while constructing list questions and have in-cluded other option for both list and ranking questions in order to grasp correct and full swers. Thus, in case an alternative is missing in the list respondent can give an accurate an-swer.
Rating questions were also included in order to find out an extent of to which the respon-dent believes certain issues or incidences occur. And grid (matrix) type of questions was in-corporated in order to save the respondents time and questionnaire space. As the authors are aware that certain issues may be irrelevant and do not occur in all companies, an addi-tion of N/A opaddi-tions were included, so that the respondent could show that the matter does not have any importance for him/her.
Although it is believed that closed-ended questions are the most suitable for this particular research, the authors understand that closed-ended questionnaire does not fully reveal all the information on the issue and that there could be alternatives or aspects that were not aware of. The authors of this thesis have decided to deal with this shortcoming by adding a
comment field for every question, so that if the respondent feels that the given choices are
ir-relevant or not complete one can add a comment, which would give additional information and indicate what might have been missed.
2.4.2 Content of the Questionnaire
An issue most researchers face when conducting a questionnaire is the identification of the most relevant information necessary and ensuring that the collected data will allow research questions to be answered and research purpose carried out (Saunders et al., 2003). Correct questionnaire is the first step into accurate and valid research results. If the content of questionnaire is not relevant enough to the problem and purpose or does not give a whole complete overview of the phenomenon, the research possibly will be biased and the results not reliable enough to provide trustworthy conclusions. On the other hand, it is very im-portant to keep the questionnaire within certain limits, as questions that are too detailed, too specific and meticulous for the purpose do not usually yield any additional information whilst taking up a fair part of respondents and analysts’ time.
When designing a suitable questionnaire it is crucial for researcher to be familiar with the phenomenon at hand. In order not to make mistakes and not to collect useless information it is vital to have a good understanding of terminology, concepts and background of re-searched phenomenon (Saunders et al., 2003). In order to conduct a proper questionnaire the authors have decided to approach the information needed from two perspectives: theo-retical and practical.
Since the research is a part of another project that is conducted together by JIBS and Cap-gemini, there is an advantage to get an overview of the phenomenon from the very inside. As Capgemini is a consultancy firm engaged in helping and solving management issues for a lot of project based firms. The chance was attained to get their opinions and observations
about the primary issues and most important matters that should be considered when con-ducting a research about project portfolio management in general as well as what should be looked into when dealing with authors’ specific area of interest - project portfolio man-agement in the execution phase and manman-agement of poorly performing projects. Thus, the overview of the matter was conceived from a practical perspective.
Theoretical side of the research phenomenon was approached by reviewing secondary data. Secondary data are data that had been collected by other researchers or agencies rather than the researcher oneself (Welman et al., 2005). Since the project portfolio management is a fairly young concept the authors had to deal and work with quite limited amount of secon-dary information. Previous research were reviewed as well as all the related articles on pro-ject portfolio management. Even though the information was scarce the authors were able to build up a theoretical background and deeper understanding of the project portfolio management concept in general.
For the questionnaire the authors merged the theoretical knowledge from previous re-search and articles together with the Capgemini’s provided practical point of view. Some of the issues appeared to overlap and some did not. Having the two perspectives has helped the authors to get a better overview and will help the research to be based academically on the literature as well as applicable and practical in the real life companies and situations.
2.4.3 Quality and Reliability of the Questionnaire
Once the content and the needed data is identified a comprehensible and easy to read and follow questionnaire needs to be designed; however, it appears to be fairly problematic. In order to collect reliable and accurate data it is important that the questions are valid and properly worded. Foddy (1994; cited in Saunders et al., 2003) discusses the issue in terms of understanding. He argues that the questionnaire has to be constructed and worded in a manner so that the respondent would understand what the researcher intended to ask and the researcher has to understand what the respondent meant with the answer.
The authors of the thesis have dealt with the matter by constant reviewing and rewording of the questions, although this way is extremely time consuming it proved to be only solu-tion in order to get the so needed quality and validity. The process consisted of constant conversation and discussions between JIBS and Capgemini. Questionnaire was regularly reviewed and re-evaluated, questions improved, reworded, added and excluded until the fi-nal result was satisfying and agreeable for the both parties.
After the set questions were agreed on by both sides another issue had to be resolved. The initial version was constructed using English as the main language and as the study was go-ing to be sent out to a sample of 46 Swedish companies, translations had to be made. The translation process is usually a complicated since requires accuracy and precision and since not all people involved in the study (including the aouthors) do speak Swedish, it was even more time consuming and in the long run hindered the distribution date.
The translation process was also complicated by the technical language of the project port-folio management, as the English terms sometimes have slightly different meaning and are perceived differently in Swedish. Moreover, in some cases the English terms appeared to have no proper equivalent in Swedish. Thus, there were some risks loosing some meaning in the questionnaire and creating miscommunication between the respondents and the re-searchers.
In order to solve this and avoid misunderstanding and hence bias in data and the analysis’ results, continuous discussions and constant communication between JIBS team and Cap-gemini took place during the translation process. This was very important since even though PBM group had translated the questions into Swedish it was crucial to get Capgem-ini’s feedback, as the company is involved in the practical PPM processes and was able to help the research out with the accurate terminology.
After the final version of the study had been completed the authors decided to test the questionnaire. Since the design process of the questions was decided by the authors, there was a subjective perception on quality, validity and clarity of the questions. In order to deal with possible bias and to ensure that respondents would have the same idea and under-standing of questions, the survey had been tested with a group of people that were not in-volved in the design process. Saunders et al. (2003) refer to this as a pilot testing meaning that a questionnaire is tested on a group of people before actually sending it out to the respon-dents. It enables the researcher to get feedback about the quality of the questionnaire, iden-tify and correct problems and mistakes, improve structure. Our test sample was chosen to be a few Capgemini and some of JIBS employees. The results were quite satisfying. Even though some questions and formulation had to be changed or reworded, the feedback helped improve the quality and validity of the questionnaire.
2.5 Limitations
Due to the fact that this empirical research is a part of a larger research JIBS is conducting with the collaboration of Capgemini there were some constraints that had to be dealt with. Since Capgemini’s primary area of interest in project portfolio management in general, the questionnaire had been designed to analyse PPM as a whole. For this reason there is a re-stricted amount of questions concerning thesis’s specific area of interest – project portfolio management in the execution phase and management of poorly performing projects. Due to limited space in the survey the authors were not able to include any additional questions that also may be relevant to the particular research purpose and might help the research explore the topic in a more detailed and in-depth manner.
The authors are aware of this downside of the empirical research nonetheless, strongly be-lieve there is a positive way to look at it. Since the theoretical basis and research in project portfolio management area is very scarce it is quite difficult to identify the context and background of PPM, which is necessary for authors to have an objective perspective of project portfolio management. A more broad and complete survey that is less concentrated on details would provide more background and general information. This would offer the opportunity to put the research problem in the broader context of project portfolio man-agement and which hope that it would enable the authors to give a more complete solu-tion.
However, the authors of the current study have only chosen to investigate their subject matter within Swedish companies only and this is why it feels that the results are not en-tirely applicable in an international or global context. Moreover, there was a limitation on the research results to the 46 sampled companies as the sample is not large enough in order to suggest theories that are applicable for a wider range of Swedish companies.
2.6 Distribution of the Survey
Questionnaires can be categorized according to how they are administered and delivered to the respondent, into on-line, postal and delivery and collection questionnaires (Saunders et al., 2003). Due to the sample size, the expected amount of data and a constrained time frame the authors chose to conduct an on-line questionnaire which is delivered and an-swered through the Internet, as using this kind of questionnaire allows respondent to save time and would be more time efficient since it would acquire the results immediately. As opposed to postal questionnaires that are delivered to the respondent by post and after it has been filled out sent back to the researcher and delivery and collection questionnaires that are delivered to the respondent by hand and collected immediately after filling out, on-line questionnaires are faster in both distribution and receiving the responses.
Another reason for the authors to choose an online questionnaire was that Capgemini have provided them with an opportunity to use research software EasyResearch, which proved to be rather extensive in terms of questions structure options, easy to use and helpful with the descriptive part of the analysis.
2.7 Data Analysis and Interpretation Methods
The survey has been distributed to the sampled 46 Swedish companies which are all cur-rently engaged in running project portfolios. A week after the survey had been distributed through EasyResearch software the project was closed to the respondents and that it could extract final empirical findings. The response rate was rather high. Out of the sample of 140 respondents, 115 have took their time to fill in the questionnaire (two of them unfor-tunately did not complete the entire set of questions), thus the response rate was calculated to be approximately 82 %.
The EasyResearch software provided the authors with a few options for extracting the em-pirical findings. Answers were immediately visible in an excel sheet, where every single re-sponse was documented and presented. In addition, the authors could also choose to ex-tract a Standard Data Report, which shows the already calculated percentages summarizing answers for every singe question as well as presenting all the comments given to each ques-tion.
Moreover, comments to be a very important part of the study as in understanding and ex-ploring the reasons for the extracted results. It might seem odd because the comments of-ten do not reflect the summarized percentages, but this is perfectly normal and understand-able due to relatively small number of received remarks in relation to the number respon-dents. Hence, the authors had to clarify that it did not imply comments reflect the reality and overall results of the study. Respondents’ commentaries will simply support and aid an understanding, getting more details and possible reasons for the results obtained.
As noted previously, this questionnaire was primarily constructed for a larger and more ex-tensive research within project portfolio management that authors are also taking part in. Thus, there were questions in the survey that were irrelevant to the subject matter of the thesis. Therefore, the authors had to extract and consider only the relevant questions that could give useful information on project portfolio control, review and monitoring issues and help to solve the specific research problem and carry out the purpose. Out of 54 ques-tions, 29 were found to be relevant and contributory.
After identifying the relevant questions it was decided to break them down into parts ac-cording to the proposed analysis model (Figure 3.1), that was constructed as an outcome of our theoretical framework. With this, it would create more clarity and flow throughout the thesis, since it would be easier to follow and see in the analysis which parts of empirical findings relate to certain theoretical material.
Afterwards the empirical material was analysed in relation to the relevant theoretical find-ings in order to see commonalities and differences. The interrelations between questions were identified and conclusions drawn.
3 Frame of Reference
In the chapter below, the control, review, and monitoring of projects, control mechanisms, steps for managing poorly performing projects as well as the importance of organizational learning are presented and explained. Moreover, the model for analysis part is developed and clarified.
Projects are vital for strategy of any organization and according to Dietrich and Lehtonen (2005) “projects may be considered as building blocks in the design and execution of future strategy of the
organization”. Due to the fact that projects are interrelated it is essential organizations
under-stand that performance of each project is important for the success of the whole organiza-tion. Aritua, Smith and Bower (2009) in their research argue that in the multi-project envi-ronments projects that are put together as a portfolio and coordinated as programs of pro-jects are often interdependent and a certain degree of interrelatedness between propro-jects ex-ists. This confirms that multi-project organizations should not view projects as separate en-tities but take interdependencies and complexity into account and create project programs and portfolios instead. Moreover, Aritua et al. (2009) believe that “program and portfolio
man-agement occupy a position between strategy formulation and delivery and should be pivotal functions in any changing or developing organization providing full circle vision across the boundaries of strategy development and project delivery”.
Organisations which consist of an always changing mix of large and small projects present senior management with new challenges in resource planning, prioritisation and monitoring of projects (Elonen & Artto, 2003). Therefore, management of project portfolio should be carefully thought through in terms of what methods and tools should be used and what kind of knowledge and skills are needed.
Previous research confirms that project portfolio management is strongly related to success of the portfolio and the entire organization. According to the results of a study carried out by Dietrich and Lehtonen (2005), those multiple-project organizations that have managed to introduce a set of project portfolio management (PPM) methods and processes seem to be more successful in realization of the overall portfolio goals. Cooper et al. (1999) per-formed a study which also resulted in similar conclusions. They claim that PPM is vital to companies’ success and organizations that employ a formal portfolio management method or a mix of them, in spite of method(s) in use, tend to perform better.
As it was defined earlier project portfolio management is a complex of processes, tools and techniques applied when running a portfolio in an organization, which covers numerous aspects of organization and coordinating portfolio in different stages. PPM consists of the managerial actions that related to the early screening, selection and prioritisation of project proposals, the simultaneous reprioritisation of projects in the portfolio, and the allocation and reallocation of resources to projects according to priority (Blichfeldt & Eskerod, 2008). Aritua et al. (2009) stated that one of the obvious challenges for the simultaneous project portfolio management is the coordination of resources, schedules and costs between ongo-ing projects, but more importantly it is the maximization of value from the combination while optimally managing the risks of the combination. Unfortunately many organizations fail to properly manage projects in their implementation phase, which results in poor per-formance of these projects during their entire lifecycle and failure in the end. As a result, poorly performing projects waste scarce resources not giving any positive effect to an or-ganization after they have been carried out. Therefore, it is essential to review, control and monitor projects within undertaken portfolio on a regular basis.
3.1 Project Portfolio Control, Review and Monitoring
As the main goal of a project portfolio management is to maximise projects’ value added to the company and help organizations achieve overall portfolio and corporate goals, it is im-portant to ensure that ongoing projects meet or exceed organizations expectations. Unfor-tunately, not all projects that have been selected to a portfolio are carried out successfully, add value to a portfolio or meet the preset objectives, and can be completed without being eliminated or killed. According to Rajegopal, McGuin and Waller (2007) it can happen due to several reasons: projects may not provide sufficient value and may loose the alignment to the business’ objectives, new projects may result in a delay of execution of current pro-jects, projects may be re-scoped and incorporated within other propro-jects, and finally tech-nology changes may result in cancelling out the benefits of projects.
As one can see multi-project environments can be effected and influenced by numerous external and internal reasons. Such reasons can range from change in corporate strategy and goals to changes in market demand or technological capabilities. As Aritua et al. (2009) state in order to remain competitive and successfully run the portfolio of projects organiza-tions need to respond to occurred changes and adjust the project portfolio activities. Thus, during the business lifecycle ongoing portfolios are changed by launching new projects and execution of the old ones. It is suggested that projects in progress that have reached major milestones should be reevaluated at the same time as new projects are being considered for selection. This gives a chance for a combined portfolio to be created within available re-source restrictions at regular intervals due to facts like: project completion or abandon-ment, new project proposals, changes in strategic focus, revisions to available resources, and changes in the environment (Archer & Ghasemzadeh, 1999). These constant processes of re-planning and rebalancing the portfolios, based on changing business needs, is a part of the portfolio management control, review and monitoring processes. Portfolio manage-ment is not a one-time event; it is more a continual interactive process that requires ongo-ing monitorongo-ing and course correction (Rajegopal et al., 2007).
Project portfolio control, review and monitoring are major challenges for the portfolio management (Cable, Ordonez1, Chintalapani & Plaisant, 2004). In order to ensure that the portfolio of projects runs smoothly and successfully, it is crucial to monitor projects’ per-formance throughout the entire life time, identify projects’ perper-formance trends, spot prob-lems and risks and address the projects that need special attention and support in a timely manner (Cable et al., 2004).
If for some reason multi-project organizations fail to constantly control and monitor pro-ject portfolio and performance of separate propro-jects, propro-jects are most likely to be contin-ued until completion even though they might not meet corporate goals or contribute to or-ganizational objectives (Elonen & Artto, 2003). Meaning that projects that could have been discontinued are still carried out, using scarce financial, human and time resources of the organization that most likely could have been used more effectively by other higher priority or more promising projects. Furthermore, lack of control mechanisms stops project or program managers from identifying projects that are at high risk levels, but if redirected and supported could bring value to the portfolio and the entire organization. Constant monitoring of risks allows management quickly identify and prevent poor performance and project failures (Olsson, 2008).
A number of possible project portfolio problems that occur due to poor portfolio control, review and monitoring processes and could have a negative impact on the portfolio’s and in the long-run organization’s performance, were identified by several authors and put
to-gether in one study conducted by Elonen and Artto (2003). The problems are (Elonen & Artto, 2003):
• Poor quality portfolios • Reluctance to kill projects • Scarce resources, a lack of focus • Selecting short-term and easy projects
• Information overflow and lacking quality of information • Decision making basing on power
• Objectives of different projects are not systematically integrated to the strategy or to holistic end results of the portfolio
• No project prioritization and no methods for prioritization
3.2 Control Mechanisms: Formal and Informal
It has been identified and proved by different researchers that organizations use formal and informal control mechanisms for project portfolio management. These control mecha-nisms are numerous and very different from each other therefore to see the whole picture one needs to be looking at them simultaneously.
Bonner, Ruekert and Walker (2002) in their research when talking about control, review and monitoring of the projects within portfolios, emphasized on the fact that managers should have a very good knowledge and skills that are beneficial and imperative for the whole portfolio and organization. Therefore, when structuring projects into cross-functional teams upper-level management is facing essential issue of how to implement suf-ficient control over project teams. Though some of them by their nature need a certain de-gree of flexibility, creative freedom and participative decision processes, managers should still be able to keep projects and project teams on track in order to avoid unwanted sur-prises (Bonner et al., 2002).
As it is clear that organization need control mechanisms in order to function well it is im-portant to realise that in dynamic and rather creative multi-project settings too strong and detailed control can be a dangerous. “The wish to avoid inefficiency and to dominate uncertainty and
risks exacerbate pressure for higher levels of control and bureaucratise the project work,…changes the func-tion of project managers from a manager of creativity, change and risk to a manager of paper and forms”
(Geraldi, 2008). Too much centralised control and order turn a creative, dynamic and inno-vative environment (individuals) into highly bureaucratic and controlled by numerous rules and restrictions.
On the other hand, too chaotic processes may often lead to miscommunications, poor in-formation flow misunderstandings between different levels of the project portfolio (portfo-lio, programme and project), between different projects and within project teams. The mis-communications usually arise in form of authority conflicts. “Authority conflict may result in
mixed messages being communicated to employees and also ineffective management of individual projects”,
which was described by Dooley, Lupton and O’Sullivan (2005). Hence some control is re-quired and frameworks that define roles and authority clearly are necessary.
Based on the discussion above it is assumed that usage of only either formal or informal control mechanisms would fail to help managers to the whole extent, it would help only partly. Some activities performed by people involved in the portfolio are better controlled
by formal means while the others by informal. As a result, organizations need to adopt both types of control mechanisms - formal and informal.
3.2.1 Formal Control Mechanisms
A lot of existing literature views formal control as a really static process. Organizational processes and/or outcomes are monitored and evaluated in relation to a programmed set of control standards, which are assumed to stay constant over the course of the control pe-riod (Bonner et al., 2002). For this thesis the most common formal control mechanisms such as Project Management Office and Measuring Projects’ Time, Cost and Scope Per-formance (EVM –Earned Value Management) would be looked at.
3.2.1.1 Project Management Office (PMO)
Project Management Office or PMO is one type of formal control mechanism, although it also includes some informal techniques. This mechanism can help organizations to control, review and monitor project portfolios. Unfortunately the amount of scientific literature on this topic is limited. As Aubry, Hobbs and Thuillier, (2007) note “treatment of the PMO is
rela-tively plentiful in the professional literature, but relarela-tively absent in the scientific literature”.
The research would explore if Swedish organizations participating in the survey use PMO for managing projects within portfolios and if yes, to what extent it is done. Kendall and Rollins (2003) compare PMO with value machine and argue that it must become an arm of senior management, therefore “it must help the executives meet their strategic goals by providing them
with a single point of knowledge for project management intellectual property, among other things”.
Many organizations nowadays have implemented the Project Management Office (PMO) to achieve project management oversight, control, support and alignment (Hill, 2004). The PMO’s role therefore is to help both the project manager and the organization to under-stand and apply professional practices of project management, as well as to adapt and inte-grate business interests into the project management efforts. PMO provides the capability to guarantee professionalism and excellence in applying commonly accepted principles and preferred project management practices to each project (Hill, 2004).
Cardin (2007) in his research found out that PMO functions deliver more value around PPM. The representatives from Capgemini, the authors worked with on the PBM project, based on numerous researches they have done, agree that “PMO helps with strategic direction,
providing project management support functions and day-to-day operations of the portfolio system to actually being responsible for the resorting and direct management of a component or category of components” (J.
Schlyter & J. Winqvist, personal communication, 2008-09-30).
3.2.1.2 Measuring Projects’ Time, Cost and Scope Performance (EVM)
Cable et al. (2004) believe that when a project achieves the right balance among cost, schedule and technical performance, the project is successful. Furthermore, the authors say that project performance measurement consists of determining, organizing and presenting cost, schedule and performance information in a way that provides project managers with better and more reliable information to analyze trade-offs among cost, schedule and tech-nical performance in a timely manner.
Hence project performance measurement is one of the formal ways that might be applied by portfolio management in order to control project portfolios’ performance and can be used by organizations to control, review and monitor projects within undertaken portfolios.
That kind of measurement of time, cost and scope is often referred to as Earned Value Management. Cable et al. (2004) discussed Earned Value Management based on the PMBOK® Guide (Project Management Institute, 2000). According to them, Earned Value Management (EVM) can be defined as a method that joins together scope, schedule and resources for measuring project performance.
Cable et al. (2004) stated that EVM compares the amount of work that was planned with what has been spent and accomplished to determine cost and schedule performance. Fur-ther on Cable et al. (2004) noted that Earned Value Performance Management is a method for measuring and reporting project presentation based on planned expenses, actual ex-penses and technical performance achieved to date. The EVM method can be used to re-view present project status and performance, as well as forecast future project performance based on past project presentation and new information (Cable et al., 2004).
The International Council for Project Management Advancement found out the following results based on surveys where 75.3% of the respondents felt that EVM was suitable as a Standard for project performance measurement (ICPMA, 2002; cited by Cable et al., 2004). This supports that the usage of EVM (whether or not it is defined like that by the manag-ers) is a rather useful tool to control, review and monitor projects’, programs’ and portfo-lios’ performance, which, if done in time, might lead to identification of weak portfolio ar-eas and eventually to improvement and development. Therefore in this thesis the authors would try to identify if such method (EVM) or any of the measurements (time, cost and scope) are widely applied among their sampled companies. Further on, to uncover their reasoning for measuring or not measuring their project performance according to the three criteria, as well as the ways it is being done and what are the outcomes.
As it was stated earlier, formal process control is used to the extent that managers’ effort to influence the means used to achieve most wanted ends by specifying and monitoring the behaviour and/or activities to be followed (Bonner et al., 2002). But the high level of failed projects suggests that managers do not have enough skills and knowledge about the idea of undertaken project, not fully familiar with specifications of undertaken project, or have dif-ficulties with an environment of undertaken project (Bonner et al., 2002). That is why the authors believe that it is extremely interesting to identify what mechanisms are use by orga-nizations to manage project portfolios and find out where exactly knowledge and skills are lacking and why does it happen. In this case, it is believed that it is one of the reasons why organizations do not control, review and monitor projects within portfolios on a regular basis.
3.2.2 Informal Control Mechanisms
Management can specify exact processes, procedures or activities for the team to pursue, and afterwards monitor their loyalty to those specifications over the course of the project; the setting and monitoring of such management-initiated processes and procedures is con-sistent with the concept of process, behaviour or action control (Bonner et al., 2002). Also management can set up specific goals for the team to achieve on one or more outcome di-mensions like a completion deadline, an expense budget, cost or performance criteria to be met by the new product, sales objectives or profit/ROI goals; the setting and monitoring of such management-initiated performance goals is consistent with the concept of output control (Bonner et al., 2002).
Based on the Bonner et al. (2002) point of view new product development projects are a good example of projects, which require informal control mechanisms for their
manage-ment. As Bonner et al. (2002) stated NPD control processes could actually be highly dy-namic and interactive between upper management and the NPD project team. Also, they said that there exist quite a number of forms of interactive control processes such as team operational control influence, team strategic control influence, management intervention, etc.
3.2.2.1 Creation of Transparency and Information Flow from a Project to a Portfolio/Corporate Level
An informal control mechanism for managing portfolios, which partly also partially in-volves formal tools is creation of transparency and information flow from the project to the portfolio/corporate level, in order to efficiently monitor and control a portfolio it is important that accurate up to date information reaches the decision makers in time (Cable et al., 2004). Thus, it is important to ensure fluent information flow and transparency of project data between project/program and portfolio/top management, that would enable top management to focus on problem areas of the portfolio, manage risk levels of projects, take timely decisions and that way prevent failures. Briefly “project management information that
is timely, accurate and actionable results in successful projects and project portfolios” (Cable et al., 2004).
Information flow and transparency within project portfolio can be achieved by developing a system that contains accurate up to date information about projects performance and progress. The system should be easily accessible for all parties and data presented there has to be easy to understand and interpret.
Elonen and Artto (2003) carried out a study that confirms lack of transparency and infor-mation flow to be an important problem in PPM field. Their study results showed that there was a problem with transparency of project information and its quality within multi-project organizations. They claimed that personnel are unaware when, in what format and what kind of project information should be delivered to top management levels. They sug-gested an accessible database or system to solve the issue.
Another issue which is strongly related to transparency is internal politics and power strug-gles between managers. As Pfeffer (1992) notes “Portfolio decisions making is no exception, getting
approval for project launch depends as much if not more on subjective political processes and ability to gain support among the decisions makers, as it is influenced by objective financial estimates” (cited in Elonen
& Artto, 2003). This is an important issue as if the decision making processes are not transparent and are based on personal preferences rather than objective criteria, the se-lected and prioritized projects may not be in line with organizational strategy and might not add sufficient value to the company. Hence, it is important to ensure that the decision mak-ing processes are lucid and as little as possible influenced by personal influences and ambi-tions.
Project portfolio control mechanisms enable organizations to control and monitor projects’ performance throughout their life time, identify and assess risks and, if necessary, discon-tinue or improve poorly performing projects. As Cable et al. (2004) noted “one of the main
challenges is to track project performance across the entire portfolio in a timely and effective manner” what
will allow “managers to diagnose performance trends and identify projects in need of attention, giving them
the opportunity to take management action in a timely fashion”. Therefore, it is vital for
organiza-tions to keep track on all the projects within undertaken portfolios in order for them to be efficient and succeed. For better control, review and monitoring of ongoing projects, orga-nizations have to use a mix of formal and informal control mechanisms.
