Contributing factors in optimal project portfolio selection
The selection of projects and programs of work is a key function of both public and private sector organisations. Ideally, projects and programs that are selected to be undertaken are consistent with strategic objectives for the organisation; will provide value for money and return on investment; will be adequately resourced and prioritised; will not compete with general operations for resources and not restrict the ability of operations to provide income to the organisation; will match the capacity and capability of the organisation to deliver; and will produce outputs that are willingly accepted by end users and customers.
A modified Delphi approach has been applied in this study to investigate best practice and to determine the factors that contribute to optimal selection of projects, and the associated strategic level decision making.
There are various standards and practices that some may recognise as representing best practice in this area. Many of these have similar characteristics and this study has found no single best practice. Each of the participants in the study related to practices that are appropriate to the organisation, the size and nature of the candidate projects, the regulatory environment, its stakeholders, and the experience and capability of its personnel.The study identified the factors that contribute to the optimal selection of projects as: culture, process, knowledge of the business, knowledge of the work, education, experience, governance, risk awareness, selection of players, preconceptions, and time pressures. All these factors were found to be significant; to be appropriate to public sector organisations, private sector organisations and government owned corporations; and to have a strong linkage to research on strategic decision making. These factors can be consolidated into two underlying factors of
organisation culture and leadership.
The significance of the conclusions from this research is that organisations that do not give due consideration to the underlying drivers of organisation culture and leadership, will continue to make sub-optimal decisions on the billions of dollars they invest in projects each year.
Author: Doug Wheeler
Review status: Presented at the AIPM 2014 National Conference