2. Literature Review
This Literature review is aimed at improving our understanding of
both the theoretical and practical concepts that constitute Project Portfolio
Management. The review is divided into two parts: the first part looks at
Portfolio Management with a focus on the project selection process, the
different tools and techniques that can be used and the frameworks that can be
used to select projects for a portfolio. The second part of this literature
review looks at International Development Organisations and what makes them
different from traditional organisations.
2.1 Project Portfolio Management
2.1.1 What is Project Portfolio Management
Project management can be defined as a process by which projects
are defined, planned, monitored, controlled and delivered (APM, 2006). The aim
of this process is the achievement of well-defined objectives. How is project
management different from project portfolio management? Different authors have
tried to answer this question to show the gap that portfolio management aims to
fill. Levine (2005) argues that project portfolio management is the bridge
between portfolio planning and portfolio management within a traditional
organisation. Project portfolio management therefore links the organisation's
strategic objectives to its project selection process by ensuring that
individual project goals are in line with the portfolio's goals. LaBrosse
(2010) on the other hand argues that project portfolio management is a way
companies can collectively manage a group of projects to reap benefits that
would not be available if the projects were managed individually. The two
authors put emphasis on the benefits that linking an organisation's strategic
goals and objectives to its project selection process can bring for that
organisation. This dissertation as explained previously focuses on the project
selection process as part of project portfolio management therefore a good
understanding of an organisation's strategic goals and objectives is crucial in
order to make its project selection process more effective. Dye and Pennypacker
(1999) argue that project portfolio management is the application of knowledge,
skills, tools and techniques to a collection of projects as opposed to a single
project's activities to meet or exceed the needs and expectations of an
organisation's investment strategy. Project portfolio management is therefore
not only about linking strategies and goals to the project selection process
but also about applying the existing knowledge and tools to
University Of Hertfordshire (2014)
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the project selection process. The PMBOK (2010) refers to project
portfolio management as the selection and support of project investments that
are guided by the organisation's strategic plan and the available resources.
The resources available within an organisation have an impact on the way the
project portfolio is selected. Cooper et al (1998) suggest that project
portfolio management has the following three objectives: maximising the value
of the portfolio, linking the portfolio to the strategy; and balancing the
portfolio.
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