Master thesis project portfolio management
The key benefits of software line development is the covering of a wide field of application with minimal extra costs by reuse of a common software platform. Therefore the thesis tries to answer the questions of how does an ideal software line portfolio model have to look like? What kind of elements, key figures and interfaces to other business units belongs to this portfolio model? Finally how can the portfolio model ensure that the right projects will be selected for maximum long-term business growth?
In order to answer these questions, the thesis emphasises at first the current body of knowledge of the portfolio and software line theory. On the basis of the theoretical results combined with the insights of an empirical research an ideal portfolio management system for software lines will be designed. The developed model will be exemplary approved in a case study with the program management of Cassidian , the defence and security division of EADS group.
The EADS group is employing around , people at more than sites worldwide. Airbus is a commercial and military aircraft company whereas Eurocopter is a helicopter manufacturer and Astrium is involved in worldwide space programs Figure 2. Stefan Zoller through the consolidation of the former business units Cassidian Airsystems Cassidian Electronics and Cassidian Systems into one integrated company. The transformation will be continued by his successor Bernhard Gerwert with the complete reorganisation of the corporation, which will be finished in November Elements of the process are the harmonization of the business systems, techniques, tools as well as the identification of synergy opportunities between the former separately operated business units.
The major goal of the transformation is to prepare Cassidian to become a global player with a worldwide business aspiration. For achieving this objective, Cassidian needs to establish a portfolio management for identifying and selecting the right projects and products as new standard solution for upcoming requests for proposal. The major goal of the thesis is the evaluation and design of an ideal portfolio management system for software line development for merging the gap between common project and product management.
This contains at first the evaluation of the current status of research of portfolio management and software line development. On the basis of theoretical results combined with insights of expert interviews an appropriate portfolio management system will be established and further designed in an iterative approach.
Master Thesis Project Portfolio Management
The developed system will be exemplary approved in a case study with the program management of the Cassidian company. The research objectives of this thesis are in detail:. Comparison of alternatives based on a developed assessment model. Selection of the most appropriate portfolio analysis model for the detailed realisation of the ideal portfolio man agement system in the context of software line development. Moreover the ex emplary application shall deliver first insights of the model in practice which finally lead to additional optimisations.
The structure of the research with the title Design of a Portfolio Management System for Software Product Line Development can be separated in two major parts. The first part deals with the theoretical and empirical research on portfolio theory and software line development. The insights are the basis for the evaluation and selection of an appropriate portfolio analysis model. The second part concerns with the detailed development of the ideal portfolio management system with the previous selected analysis instrument.
The realised system will be exemplary applied and validated for a Cassidian product. The selected research approach and the chapters of the thesis are in detail the following. The selected research methodology is a constructive design science approach. In reference to Nunamaker and Chen , p. The goal of this constructive research is to design a portfolio management system for software line development for transforming project results into reusable standard products.
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The portfolio management solution will be validated by expert interviews in combination with a practical approval in a Cassidian project. The research model is shown in Figure 3. The framework covers with two axes, namely r esearch activities and research outputs. Research outputs cover constructs, models, methods and instantiations. Research activities comprise building, evaluating, theorizing on and justifying artefacts. Figure 3. Each intersection contains a specific research objective of the overall portfolio management system and is addressed and explained in a specific section of the thesis.
The research method for designing the software line portfolio management system shows the activities that will be performed to achieve the previous defined research goals. The detailed research procedure is depicted in Figure A. The proposed research method is in line with the general approach for design research by Takeda, Veerkamp, Tomiyama and Yoshikawam , p. Chapter 1 presents the motivations of this research whereas Chapter 2 outlines which goals shall be achieved and why this assignment presents a contribution to research.
The Chapter 3 determines the research methodology to achieve the goals. Chapter 4 gives an overview of the fundamentals which are essential for the subsequent evaluation and design of a software line portfolio management system. This covers the portfolio theory itself as well as the current research state of software line development.
Chapter 5 represents the main part of this thesis. The first two sections give a brief overview of the role of software line portfolio management and justify the research topic. The Section 5.
Project Portfolio Management & Strategic Alignment.pdf
The subsequent Section 5. It outlines the components, roles and interfaces of the software line portfolio system and evaluates a portfolio analysis method with a respective scoring model. Finally, in Section 5. In Chapter 6 the achieved results will be discussed and the own approach reflected. Finally Chapter 7 summarizes the major insights and Chapter 8 gives a short perspective.
This section gives a basic overview of portfolio, program and project management. Therefore the first section deals with the key principles of the overall portfolio theory and defines terms like portfolio and portfolio management system. The subsequent sections present the roles and fields of activity of portfolio, program and project management in enterprise as well as their interrelationship between each other. Finally, the last section of this chapter focuses on the advantages and drawbacks of portfolio management itself Figure 4.
Transferred to the business management, the product portfolio represents the entire solutions of a company or a strategic business unit 1. A product portfolio can be established for example by delimitation and structuring criteria Figure 4. Moreover the differentiation between a material good and a service as well as product line and product bundling strategies reinforce the challenge of an acceptable product portfolio management, which will be defined in the next section.
The portfolio theory has its origins in the financial industry. In this context, the work of Markowitz played in the fifties a special role in the development of the portfolio theory. In his portfolio selection theory Markowitz assumes that the main objective of an investor is the optimal combination of securities. Such research has not been reported earlier. We examine three Finnish telecommunications organizations and their approach to project portfolio management.
Unable to display preview. Download preview PDF. Skip to main content. Advertisement Hide. This process is experimental and the keywords may be updated as the learning algorithm improves. This is a preview of subscription content, log in to check access. Aalto T. Google Scholar. Allaire Y. Anell B. Archer N. Artto K. Bailyn L. Katz R. Betz F. McGraw-Hill, New York, Bobrow E. Bourgeois L. III and Brodwin D. Bowonder B. Brown S. Comstock G.
Cooper R. Davidson J. DeGregorio G. Dobson M. Dabei wird als erstes der Projektportfolio Erfolg genauer beschrieben und seine Erfolgsfaktoren, die auch in dieser Arbeit verwendet werden, definiert. Obwohl die multiple Regressionsanalyse ein paar statistisch signifikante Ergebnisse liefert, bleibt eine eindeutige Schlussfolgerung schwierig. Globalization increases the dynamics of the environments in which companies must operate.
Due to highly efficient logistics solutions,enterprises construct their value creation chains all over the world. Besides this, the market becomes a world-wide one and firms are easily able to satisfy more and more consumer needs. This results in dynamic organizational structures and processes, because every company must satisfy the demand of their customers more specificallyto secure their market shareor even to gain access to the respective market.
Hence, firms are more and morebecoming project-oriented organizations. Within firms which are characterized bya project-oriented organization, typically dozens, even hundreds of projects are going on simultaneously. However, what is business success and how is it measurable? A purely financial approach is not adequate to this constellation. There are numerous groups of stakeholdersinterested in the firm. Each of these groups has their own idea about organizational performance. Thus, a multi-dimensional approach for the measurement of success is necessary.
There is a legal obligation ofdisclosure for so called joint-stock companies section of the German Commercial Code. But small and medium-sized enterprisesare under no such obligation, making it significantly more difficult to acquire information concerning their success or lack thereof. One possibility of solving this problem is subjective data collection with so called key informants. However, subjectively generated data is easily influenced by failures or inaccuracy. In this context empirical data were collected, analyzed and evaluated by means of the 5thbenchmarking study about multi-project management MPM at the Technical University of Berlin.
This study is carried out regularly since and it examines critical success factors of management within project environments of large and medium-sized enterprises. So far, more than 1. The situation summarizedabove results in the following tasks:A convincing definition of organizational performance needs to be formulated, taking into account the different stakeholders and the dynamic development of the economic environment.
Furthermore, it is essential to developmethods for validating subjectively collected information on project-portfolio success. After these two fundamental steps have been taken,the relationship between the subjective evaluation criteria and objective key indicators of organizational performance must be statisticallyanalyzed. Which indicators adequately depictproject-portfolio success? How to measure business success taking into account all achievements of a company?
Is there arelationship between subjectively measured project-portfolio success and objectively measured multi-dimensional business success? The answer to these questions and the case of a positive relationship, implying that efficient project-portfolio management delivers additional benefits to business success will clarify why certain companies perform better than others. Considering this possible result, firms may also develop a higher awareness regarding project management and in doing so enable themselves to improve their project management abilities and create more value. Consequently, this thesis will also provide some evidence regarding high investments in project management.
This makes the subject of this thesis very important for research and business practice. Although there are many studies on business success and also on project-portfolio success, there are only a few studies that examine the relationship between these success dimensions. These studies examine the correlations between several single success factors of project management activities and their impact on organizational benefits.
The next sub-chapter will give an overview of the argumentationused, leading to a clear answer of the questions mentioned above. Chapter two elaboratesthe theoretical basis to ensure a fundamentalunderstandingofthe examined cases. First off, the firmswhich were examined in this thesis willbe described. After that, multi-project management MPM is described regarding its definition and its significance for companies. MPM is a generic term for all topics of project management and it will be used as the framework for this thesis. The mainsection of the theory chapter will deal with success and performance.
Due to the use of both subjective and objective measurement within this thesis the chapter will critically discuss these performance measurement methods and summarize the current state of research. Based on this, project-portfolio success and its indicators willfurther be explained as part of the subjective data collection, followed by a discussion of business success as part of the objective data collection. The latter will initially be specifiedby adefinition of success in the context of complexity and different perspectives on performance.
After that, key figures as essential elements for objective performance measurement will be shown and grouped into particular categories. Key figures are the most important form of data compression,  thus they are very important for this investigation. The third chapter represents the bridge between theory and practice. For that,the most important key figuresfor the investigation are identified in the context of MPM and the examined companies. Furthermore, the study design as well as the method of data collection andthe structure of data analysis as well as the assumptions are described.
In chapter four the formulated relationship is examined with a regression analysis. In doing so, the results arepresented and evaluated. After that the results arediscussed critically and further potential for researchis shown. The last chapter concludeswith a summary of the findings of the thesis. The approach of this chapter isto begin with the definition of different companies with their categories and difficulties regarding information collection. An explanation of multi-project management follows this. The main theoretical section deals with success.
For this a comparison between subjective and objective measurement is made followed by a definition of project-portfolio management and its success factors. A section about business successconcludes this chapter. The last section will represent the major part due to the complex constellation of business success and its multidimensional character.
To develop an idea ofthe companies thatare relevant for the investigatedtopic and which also took part of the evaluated benchmarking-study, a division into two major groups is useful — small and medium-sized enterprises being one and large enterprises being the other. There are three recognized approaches. The first one is based on a quantitative perspective, which defines a SME by financial turnover and number of employees. This approach is a recommendation of the Commission of the European Communities from May 6th, and it is important for the legal support of the respective enterprises.
The recommendation of the IfM-Bonn, which is important for science and practice, differs regarding the number of employees. Due to the fact that independent departments of a company often formally are independent SMEs too, this approach has its particular limits. The second approach uses a qualitative perspective. This means that the ownership or the conduct of afirm is more important for defining a company.
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Indeed, the differences between the two approachesare measureable, but they are not large. The third approach takes into account the connections to other companies. This also leads to a different share of all companies being defined as SME. However, the difference is also slight. For measurements, comparisons or evaluations of SMEs, it is essential to define quantitative facts, because qualitative facts are limited regarding their statistical evaluation. Thus, quantitative criteria were developed from a supporting to a sufficient level.
Regarding legal support the maximum limits are: less than employees and less than 50 millioneuro turnover p. That means a company also belongs to the group of SME, if it does not exceed either the employee limit or the turnover limit. In reality it is difficult to find a common definition, because there are so many different companies from a little tradesman to big businesses,  which belong either to the qualitatively determined group or to the quantitative group.
For example a firm leadby the owner can also employ more than employees or generate more than 50mil. Maybe this could be a reason why there is still no agreed upon and legal definition on small and medium-sized enterprises. On the other end of the scale are big businesses. That means more than or employees and more than 50 millioneuro turnover p. Nevertheless this definition is not generally agreed upon. Most authors use the recommendation of the Commission of European Communities with a strong interpretation of amount of employees and turnover p.
However, Kless and Valdhues use more than employees or more than 50million. Hence, it is very important to find out the limits used for defining SME within a study in order to ensure comparable data. Most large enterprises are joint-stock companies so the publication of their corporate data is mandatory. Nevertheless, this group only has a share of 0. For a better understanding of project-portfolio success and its significance for organizational performance it is useful to take a look at multi-project management.
During the literature research, the fact that there is no common understanding about multi-project management regarding both the term and the content stood out. Single-project management is the lowest level of project management and deals with all activities for the best possible preparation, planning and execution of projects  within the triple bottom line of time, budget and performance. Program Management represents the next level regarding project management.
Artto et al. Recent research shows that the definition depends on the different contexts like number of projects or size and resource type. An appropriate definition was made by the Project Management Institute They argue thatProgram Management is. Here, a program management is responsible for theallocation of resources, the coordination of activities and the combination of projectsto reduce complexity and realize synergies. These combined projects altogether belong to a large project.
Thus, the program is limited regarding the time of the main project. Portfolio Management or project-portfolio management is one level above program management and based on a portfolio. These tasks also aim to achieve specific strategic business objectives. Furthermore, it is not limited regarding the time of any project. Multi-project Management is a generic term for all subjects relating to project management and the terms mentioned above. Hence, program management, project-portfolio management and single-project management are respectively subsets of multi-project management. Consequently, the multi-project level comprises three dimensions of project management with additional activities and tools to ensure a functioning and efficient project environment.
Why do we need multi-project management? Executives increasingly realize that projects are the basis for the future profitability of a firm, leading to their growinginterest in how projects are selected and managed. Often a lack of information about the ongoing and planned projects is a consequence. Dietrich and Lehtonen suggest that many of the presented models and approaches in literature are merely theoretical constructions about solving managerial problems.
The presented argumentation emphasizes project-portfolio management and its successas a field in its own right, taken in the context of project management, or rather multi-project management. It contributes to achieving organizational objectives and especially the field of project-portfolio management and its success is only one indicator for these objectives and consequently business success.
The formulated definitions make a clear dissociation regarding the terms used and improve the understanding of the examined topic in the context of multi-project management. In order tounderstand what success really is, especially for a project-portfolio and for a business, as well as how to measure it, this chapter describes and defines the required context.
First, an overview is given about measuring success and why this is important for the results of this examination. Second, project-portfolio and its success indicators are defined as part of subjective measurement followed by, third, business success as objective measurement. The definition of business success will take the major part due to its complexity and different dimensions involved therein. Within this thesis project-portfolio success and business success are examined and measured. There are multiple ways to partition performance measurement, but the most popular is between subjective and objective measures.
Here, both types of measurment are used, thus an explanation is useful for understanding the empirical part of this thesis. These persons, also called key informants, are supposedly knowledgeable about the issues being researched. They are also able and willing to communicate about the requested issues. Investigations with key informants often use five- or seven-pointLikert-scales due to their high significance within economical and social science.
These facts emphasize the subjective character of data collection by key informants. The person gives his own opinion regarding a requested item. Consequently, there are both advantages and disadvantages associated with the use of subjective measurement.
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First, researchers are able to define and tailorthe questions directly to fit the investigated subjects. This fact allowsthe gathering ofinformation that would have not been possible to collect with standardized objective data. In practice some studies used this advantage. Narver and Slater sent questionnaires to different business units in one corporation and asked their managers about the market orientation of the firm.
All the business units had their own strategy and the managers were responsible for sales and profit,  which is necessary for identifying a business and also for identifying well-informed persons, who are suitable for a research study. These items point out that subjective measurement by using questionnaires allows for the gathering of specific and personal information whereas objective would not be able to do so. Another advantage is the flexible character of subjective data collection with questionnaires due to the lack of fixed reference points.
In a study of 68 US firms across industries Pelham and Wilson examined the subjective evaluation of business position relative to expectations. A third advantage is the measurement of organizational performance with consideration of the strategic background and industry characteristics. Lenz emphasizesthe absolute performance of a business entity depends on more than one indicator.
There are diverse dimensions that similarlyaffect organizational performance. The possibility to ask about future trends, developments or company alignment is a further advantage. Objective information with past-oriented data is limited regarding its significance for future developments.