The effectiveness of project portfolio management as a decision-making tool : a case of a project based state owned company in South Africa

Abstract

Proponents of the concept of project portfolio management (PPM) suggest that, the best way to achieve long-term goals is to group and manage projects as a portfolio, as opposed to managing them as individual entities. In this way, projects facilitate the achievement of the organisation’s intended strategy and business objectives. They continue to argue that this is also true for state-owned companies (SOC). SOCs are in most cases intended to drive both a political and social-economic development agenda. However, despite the growing body of knowledge on PPM, there is still a lack of guidance on how best to use the PPM concept, especially in SOCs, where projects are implemented in a dynamic environment with limited resources and yet there are a multitude of stakeholders with competing and conflicting interests. Against this background, the study investigated the effectiveness of PPM as a decision-making tool in a selected state owned organisation in South Africa, code named ABC SOC. A multiple data collection method was used consisting of first, reviewing key documents relating to the PPM process and associated practices. Second, key informants working in ABC SOC, in upper and middle management positions were interviewed to comprehend the PPM process and practices and hence assess its effectiveness. The multi-method was necessary in facilitating an in-depth inquiry through triangulation of data sources. . The major finding was that, PPM was inadequate to implement projects in a successful manner in an environment characterised by variabilities and political interference. Three major factors were identified as the major causes of the deficiency. First, the current approaches were ineffective in selecting projects that are aligned to the strategy to provide intended benefits; second, the PPM was not appropriately configured to adapt to an environment dominated by excessive variability and third, there was insufficient application of PPM methods and practices. Resulting from these gaps and as part of the contribution to knowledge, the study developed a PPM framework to guide decision-making in ABC SOC to ensure that optimal and balanced portfolios are implemented. The framework is intended to provide a balanced, structured, and holistic view of the PPM process to enable the decision-makers to consider key factors, especially those hinging on political and social-economic agendas of the state.