Portfolio Management of Research Projects Essay

1 IntroductionMore and more. organisations rely on research undertakings in order to remain updated on new engineerings.

procedures and patterns on their Fieldss. Through them. they remain in front in the competition and prolong their competitory advantages. This is specially the instance for organisations that are on the top of their industry and which other organisations follow closely to benchmark their strategic moves. This seems applicable for private organisations. nevertheless research and development besides plays a large function in public organisations. In the last few decennaries at that place has been an increased belief that organized research and development could excite economic growing and contribute to bettering economic public assistance.

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Given this. authoritiess provide research and development ( R & A ; D ) support in order to advance scientific and technological development. With the increased demand for production of scientific and technological cognition in the populace sector.

there has been an addition in R & A ; D activities performed by private organisations in order to fit these production demands.Whether they are of a public or private nature. organisations rely on undertakings as agencies to present consequences. This derives in the inclination to prosecute in several undertakings at the same time.

Organizations group these undertakings in portfolios which should be managed in order to make up one’s mind its composing and strategic moves.This managerial undertaking is known as Portfolio Management which applied to R & A ; D undertakings is defined as: “a dynamic determination procedure. whereby a business’s list of active new merchandise ( and R & A ; D ) undertakings is invariably updated and revised. In this procedure. new undertakings are evaluated. selected. and prioritized ; bing undertakings may be accelerated. killed.

or deprioritized. ; and resources are allocated an reallocated to the active undertakings. The portfolio determination procedure is characterized by unsure and altering information. dynamic chances. multiple ends and strategic considerations. mutuality among undertakings. and multiple decision-makers and locations” ( Cooper. Edgett.

& A ; Kleinschmidt. 2001 ) .Portfolio Management of Research Projects in the Public and Private SectorsThe purpose of the present thesis is to derive a better apprehension on how this procedure is applied in both a populace and a private scene. The thesis work focuses on the analysis of one public organisation and two private organisations.

While the sample may non be representative to wholly understand the behavior of organisations and their portfolio direction. it provides an chance to pattern the procedure in these scenes.The undertaking is lead through a series of iterative literature reappraisal supported by interviews and papers analysis.

The research inquiries represent the point of mention to get down the research. This undertaking is approached with an unfastened head. which allows re-evaluating the initial premises of the thesis and gives flexibleness to the research worker. A more in-depth description of the methodological analysis followed in this study can be found in the 4th chapter of this undertaking.The motive behind this maestro thesis developed from old surveies on undertaking direction of research undertakings. During these surveies a less known subject came up: portfolio direction of research undertakings. It appeared that. while it was a less known subject.

it was non of less importance. Through treatments with professionals from both research establishments and industrial organisations. it became apparent the relevancy of the subject. I was motivated by this relevance which is present in both the populace and private sectors.

2Trondheim. NTNUMSc in Project Management. Thesis2 Problem FormulationThis maestro thesis aims to show a description and comparing of the procedure of portfolio direction of research undertakings undertaken in a populace and a private organisation. The major focal point in this respect is to place the commonalties and differences of the organizations’ patterns with regard to portfolio direction and obtain a better apprehension on how the procedure works in both organisations. This understanding and thesis will hopefully be helpful for organisations that earnestly consider R & A ; D and for researches who will work on this subject in the hereafter.There may be several research inquiries that can be studied in connexion with portfolio direction of research undertakings. I choose to see some of import research inquiries within the range of this maestro thesis.

The research inquiries are presented and explained below.2. 1 Research QuestionsThe focal point of the probe behind this undertaking is based on the undermentioned inquiries: How do organisations execute the portfolio direction procedure? How do organisations choose which research undertakings should do up their company’s undertaking portfolio?How make public and private organisations define success in research undertakings? What drives the difference across houses. if any?3Portfolio Management of Research Projects in the Public and Private SectorsThe theoretical account is based on my premise that organisational scheme plays a major function in the manner an organisation returns to take the activities associated with pull offing its portfolio of research undertakings.

which in bend have the chief intent of bring forthing cognition and perchance convey competitory advantages to the organisation.Based on this understanding the research attack. as will be explained in a ulterior subdivision. was developed in order to analyze to what extent the theoretical account reflects world. Though the footings scheme and cognition are non explicitly mentioned in the research inquiries. both footings are underlying facets that reflect on the research inquiries and hence this survey. The research inquiries and research theoretical account are connected to each other and complement each other in such a manner to foreground the subject this thesis.2.

3 Importance of ThesisAs portion of a old undertaking for the Specialization Course of the Master in Project Management at NTNU. I got acquainted with the challenges and uncertainnesss associated with research undertakings. During the research stage and in treatments with interviewees from research establishments and industrial organisations. equals and professors it became apparent that one country of involvement in R & A ; D for those developing in the R & A ; D environment is the 1 related to portfolio direction of such undertakings.While portfolio direction is an of import subject in the literature of Project Management.

there are fewer probes that link this subject with specifically research undertakings. This may be because merely late the involvement in research undertakings has been turning and this subject is now seen as a possible tool for concern success and competitory advantage. It became clear that organisations rely more on undertakings as a agency to present consequences. Organizations arrange undertakings in portfolios harmonizing to their ends and scheme. Research undertakings. which may be among the undertakings in the portfolio or be the exclusive elements of the portfolio as will be explained subsequently. assist organisations maintain updated in new engineerings. methodological analysiss.

procedures. etc. However. in private organisations puting in Research undertakings.

whether internally or externally obtained. may look as an unneeded outgo given the focal point on twenty-four hours to twenty-four hours procedures. On the other manus. there are public4Trondheim.

NTNUMSc in Project Management. Thesis organisations specifically dedicated to bring forth or fund research undertakings in order to bring forth cognition and development of public involvement. Either manner. both private and public organisations that wish to stay competitory have a inclination to set about research undertakings. The nature of both organisations may take to different attacks on how to pull off their portfolios. This could develop into managerial activities that while work on one scene may non be utile on the other and frailty versa. Geting to understand how these managerial activities are performed in the public and private scenes can give future research workers and organisations interested in R & A ; D undertakings an penetration on some of the current patterns in these scenes.2.

4 Research ApproachOnce the importance of the subject was clarified the subject was better delimited through literature reappraisal and brief treatments with faculty members and professionals knowing in the country. Literature reappraisal includes basic theory of portfolio direction. research undertakings. portfolio direction of research undertakings.

Furthermore I used theories on portfolio rating and choice and tools and techniques for portfolio direction. This general literature provides a model within which I could look at and depict portfolio direction of research undertakings.Portfolio direction of research undertakings can be seen in two ways. One is when a company has a portfolio that includes all types of undertakings ( IT. building. R & A ; D. etc. ) and makes choice.

resource allotment or expiration determinations sing all of these undertakings. I will name this a Mixed Project Portfolio ( Figure 2: Undertaking portfolio ) . where Project ( P ) 1. 2… N.

coexist with Research Project ( RP ) 1. 2… N.Figure 2: Undertaking portfolio consisting of assorted undertakingsThe other manner of looking at portfolio direction of research undertakings can be when a company either undertakes merely research undertakings or they merely pull off them Yolanda Yebra Aguado5Portfolio Management of Research Projects in the Public and Private Sectors independently of the undertakings which support twenty-four hours to twenty-four hours activities ( IT. procurance.

etc. ) In this instance. it is possible to speak about a Portfolio of Research Projects ( Figure 3: Portfolio of research undertakings ) . in which activities of portfolio direction are done merely sing the mutualities of research undertakings within the portfolio.Figure 3: Portfolio of research undertakingsFor intents of this undertaking. the focal point is on this 2nd manner of looking at portfolio direction. where the organizations’ portfolio consists merely of research undertakings ; hence the context of this survey.

This research survey is based on an iterative procedure – a learning rhythm – which helped polish the class of the survey and farther probe. Based on this an interview usher was created ; this interview represents the footing for the qualitative attack in this paper. The interview. as it will be explained subsequently. is a semi-structured interview leting the research worker to turn to the issue with an unfastened head every bit good as giving the chance to direct the interview in the coveted way or adding relevant subjects. In add-on to the interviews.

papers analysis is besides used to back up the subject. The analysis of the papers is done adhering to the same premises and position of the interviews with the purpose of happening of import and relevant information.This procedure helped make a model within which it was possible to run in a flexible mode.

Through this. the research inquiries were refined and fine-tuned in order to underscore the chief elements of the research subject.To finish the research. I present an analysis of the findings. Whenever comparings are possible. they will be presented. Finally decisions that resulted from the analysis will be drawn. Further information on the methodological analysis followed for this undertaking is explained in the undermentioned chapters.

6Trondheim. NTNUMSc in Project Management. Thesis2.

5 Scope and RestrictionsThe major restriction associated with this undertaking comes from the sum of clip dedicated to the probe. The undertaking is developed during the spring semester of 2011 as a maestro thesis for the Project Management plan. Due to this clip restriction. the figure of instances to be analysed will be limited to three organisations. Though the sample may non be representative to to the full understand the behavior of organisations and their portfolio direction. it provides an chance to look at some sort of form in organizations’ patterns with regard to portfolio direction of research undertakings. Furthermore.

this thesis can be used as a base for farther research in the affair ; a stepping rock to travel farther.
In the instances where specific literature sing research and development undertakings was difficult to happen or of no entree. general literature on portfolio direction and undertaking direction is used as a beginning to discourse relevant issues. The same applies to theoretical accounts and tools consulted on the affair. Regardless of these restrictions. I believe that a better apprehension on the subject will be possible through this survey to make decisions and supply a base or mention for faculty members.

practicians every bit good as general populace who are interested in the subject.3 Theoretical BackgroundThis chapter presents the theoretical background of the study. To get down with. the constructs associated with the chief subject Portfolio Management of Research Projects ( PMRP ) are presented.

The aim of this is to acquire acquainted with them. to hold a better apprehension of what is discussed by different writers and to take specific definitions to work with. Once the chief subjects and definitions are introduced.

three chief constructs related to PMRP are presented. The first 1 is the influence of Strategy in PMRP and why organisations choose to trust on scheme to back up it.The following subdivision trades with the Selection procedure and presents some methods and standards for undertaking rating and choice suggested by the literature available. The 3rd construct is project Success.

which is explored from an overall undertaking direction position and more peculiarly from a public and private organisation position. The construct of success is looked at in order to understand what organisations perceive as successful and how it impacts their concern in future scheme. undertaking choice and other countries.

9Portfolio Management of Research Projects in the Public and Private Sectors3. 1 Basic constructs of the Portfolio Management of Research Projects This subdivision presents the definitions of the basic constructs associated with the study. First. I begin by briefly presenting the development of research and development undertakings and their nature. Next. the definition of portfolio direction is presented.

After these two presentations. other relevant subjects are described. Finally the chief subject of the research. portfolio direction of Research undertakings. is introduced.3.

1. 1 Research and Development Projects: a Private and Public Approach David et Al. ( 2000 ) present a really comprehensive analysis of the development of R & A ; D research in the US. Harmonizing to the writers the terminal of the nineteenth century marked the beginning of organized research and development activities upon the productive resources for societies.

Since so. the per centum of national gross merchandise directed by both private and public organisations towards increasing the scientific and technological cognition has increased. The same survey claims that during the 1930s.

the “total R & A ; D expenditures in states such as the US. the UK and Japan remained in the scope between two-thirds and one-fourth of one per centum point of their several national merchandise figures. ” ( David. Hall. & A ; Toole. 2000 ) . Since so there was an increased belief that organized research and development could excite economic growing and contribute to bettering economic public assistance. which led authoritiess to make public establishments back uping civilian scientific discipline and technology.

This gave manner to an enlargement of authorities bureau research plans in non-defence every bit good as military engineerings. and established theoretical accounts for the public presentation of governmentfunded R & A ; D by private sector contractors. With the increased demand for public production of scientific and technological cognition. there was an addition in R & A ; D activities performed by private organisations in order to fit this production needs. This is given that engineering is the most important factor for the advancement of a nation’s economic development and life criterions ( Chang & A ; Hsu. 1997 ) .

In order to advance scientific and technological development. authoritiess provide R & A ; D support. As a consequence. support for selective development of specific industries is provided through direct. project-oriented subsidies. Government policy concentrates resources on long-run R & A ; D jobs and on expensive basic research that could non be undertaken by industry.

Whether they are of a public or private nature. organisations rely on undertakings as agencies to present consequences ; this tends organisations to prosecute in several undertakings at a clip. The nature of these undertakings varies from marketing to IT.

environmental issues. procurance. new merchandise development and research and development ( R & A ; D ) . More and more.

organisations rely on research undertakings ( R & A ; D. new merchandise development. invention ) in order to remain updated on new engineerings. procedures and patterns on their Fieldss.

This is how they remain in front in the competition and prolong their competitory advantages. This is specially the instance for organisations that are on the top of their industry and that influence other organisations to follow them closely to benchmark their strategic moves.In order to keep competitory advantage. organisations need to develop successful merchandise and procedure invention ( Archer & A ; Ghasemzadeh. 1999 ; Mikkola. 2001 ) for what they turn to R & A ; D undertakings to accomplish this. However R & A ; D undertakings have a really peculiar nature. Research undertakings are characterized for being associated with a high grade of uncertainness and capriciousness ( Balachandra.

K. & A ; Pearson. 1996 ) . Therefore. big graduated table R & A ; D undertakings require big budgets and high hazard and long term plans ( Chang & A ; Hsu. 1997 ) . This is largely due to the fact that the result of a research undertaking. such as cognition coevals.

is intangible and difficult to mensurate through criterion undertaking rating.3. 1. 2 Portfolio ManagementGiven the importance of developing research undertakings.

organisations are faced with the undertaking of conforming portfolios of undertakings. For practical intents. this study considers project portfolio as:“a group of undertakings that are carried out under the sponsorship and /or direction of a peculiar organization” ( Archer & A ; Ghasemzadeh.

1999 ) . The undertaking of choosing which undertakings should be a portion of the company’s undertaking portfolio is an of import activity in many organisations. It is presented in the undermentioned definition.Portfolio Management is defined as the strategic picks. resource allotment. undertaking choice and balance of the pool of undertakings available for organisations to set about ( Cooper. Edgett. & A ; Kleinschmidt.

2001 ; Linton D. & A ; Walsh T. .

2002 ; Wang & A ; Hwang. 2005 ) . However this activity is non an easy one to make. Directors find challenges in make up one’s minding which undertakings to set about. how to apportion resources to them through their whole life rhythm and how to equilibrate the portfolio one time undertakings are completed or have to be terminated. Project Portfolio Management ( PPM ) is a critical undertaking in company public presentation. Some cardinal inquiries to be considered before make up one’s minding to make project portfolio direction are known as “Five Ws and One H” ( The Enterprise Portfolio Management Council.

2009 ) : Who can utilize the PPM procedure? Everyone from Chief executives. caputs of section. directors. supervisors.

portfolio. undertaking and plan directors. to systems applied scientists.What should PPM be used for? To pull off multiple undertakings.

plans. assets. package applications. resource allotment. merchandises. When should PPM be used? When there is more than one undertaking or plan or determinations must be taken when it comes to proposal thoughts viing for a slot in the portfolio.

whether undertakings or plans should travel frontward or terminated. resource allotment. strategic alterations. amalgamations. acquisitions or joint ventures to advert some.Where is PPM used? In both net income and non-profit organisations. authorities bureaus. universities.

investing houses. Why should PPM be used? To guarantee that undertakings and plans are aligned with schemes. ends and concern aims. to pass on undertaking and plan inside informations. to pull off undertakings and plans as a whole. PPM is a holistic. systems attack to concern undertakings.

How to make up one’s mind whether to utilize PPM or non? Conversations and treatments between executives. directors. undertaking and plan directors and experts are encouraged in order to measure the state of affairs and specify the concern instance.Screening.Choosing andPrioritization

Reprioritization ofundertakingsAllotment andreallocation ofresources harmonizingto precedence





Figure 5 Managerial activities related to PPM. based on ( Blichfeldt & A ; Eskerod. 2007 ) p. 358.

Literature on PPM has widely focused on these managerial activities of undertaking testing. choice. prioritization. reconciliation and resource allotment. while most late focal point has shifted to existent twenty-four hours to twenty-four hours direction of the portfolio. Theories and literature have gone from concentrating on tools.

techniques and methods to a more managerial attack of how the activity is really done. Therefore. this thesis surveies documented techniques and methods PPM. but keeps in sight the importance of the existent activities undertaken by the establishments.3. 1. 3 Portfolio Management of Research ProjectsGlobal market alterations and the involvement of concern organisations to stay in front of their industry.

be given organisations to rethink their competitory scheme more frequently than earlier. Firms that can non provide advanced merchandises faster than rival. lose fight. R & A ; D undertakings are used as a beginning of scheme. because they help aim the increasing complexness demanded by shorter life rhythms of merchandises and services that wish to stay in front and up to day of the month ( Mikkola. 2001 ) . Most significantly.

organisations have an increasing involvement in measuring their R & A ; D undertakings from a portfolio’s position ; in which undertaking choice. resource allotment and equilibrating remain the chief activities to be performed.Harmonizing to McNally ( 2007 ) . pull offing R & A ; D is considered as one of the three nucleus concern procedures.

Possibly the most comprehensive definition of Portfolio Management of Research Projects. and the one to be considered for this thesis. is given by Cooper. et Al. ( 2001 ) . The writers describe the term as:“a dynamic determination procedure. whereby a business’s list of active new merchandise ( and R & A ; D ) undertakings is invariably updated and revised. In this procedure.

new undertakings are evaluated. selected. and prioritized ; bing undertakings may be accelerated.

killed. or deprioritized. ; and resources are allocated and reallocated to the active undertakings. The portfolio determination procedure is characterized by unsure and altering information. dynamic chances. multiple ends and strategic considerations.

mutuality among undertakings. and multiple decision-makers and locations. ”This is an of import and critical undertaking to be undertaken because it requires a considerable sum of human resources and chance costs incurred as undertakings go from the choice stage to the execution.

At the same clip this is a hard undertaking because determination shapers have to work comparatively fast with small dependable and extremely altering information. Therefore the choice and development of successful inventions has a high grade of hazard associated with it ( Nesse & A ; Velde. 2010 ) .In order to pull off portfolios of research undertakings. organisations rely on different tools or techniques. Literature ( Wang & A ; Hwang. 2005 ) points that R & A ; D portfolio determinations are difficult to take given the nature of R & A ; D undertakings and environment.

On the one manus. R & A ; D undertakings have long lead times. and on the other manus.

market and engineering are so dynamic that it makes information for portfolio direction seem unavailable and undependable. All organisations that wish to prosecute in R & A ; D are faced with the job of pull offing the portfolio of research undertakings. where undertakings have to contend for a limited pool of resources.

At the same clip undertaking choice becomes a complicated undertaking because the determination shaper has to find which new proposals should be funded. which bing undertakings should be continued and to what extent a resource should be involved in the selected undertaking of the portfolio ( Chien. 2002 ) .