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Best practice project portfolio management
Edited by Robert Hunt and Catherine P. Killen
Introduction
Innovation project portfolio management (PPM) is of growing importance in a world of global competition where organisational survival increasingly depends upon a steady stream of successful new products. Innovation is now understood to be the main driver of economic growth in developed nations ([38] OECD, 2000; [14] DITR, 2003). Therefore the importance of maximising outcomes from innovation project portfolios is escalating. This is especially true for innovation projects for service product development as service products represent an escalating percentage of all new products ([40] Pilat, 2000). Although product development projects are absorbing increasing levels of organisational resources ([17] Edwards and Croker, 2001), new product success rates remain low. Many projects do not reach the launch or delivery stage, and for those that do, the new product success rates range from about thirty-five percent to 60 percent ([19] Griffin, 1997; [45] Tidd et al. , 2005; [6] Cooper, 2005). PPM methods aim to improve product success rates by ensuring that a strategically aligned portfolio of innovation projects is maintained. According to PPM literature, to provide the best value to the organisation, the portfolio must contain a balance of project types and risk levels and the number of projects must be limited to ensure that all projects can be resourced effectively, but sufficient to enable an adequate flow of projects and new product introductions. A common theme in the literature on PPM is the assertion that adopting certain methods or establishing best practices will improve innovation outcomes ([10] Cooper et al. , 2001; [31] Matheson and Matheson, 1998), however empirical research in this area is limited ([27] Killen et al. , 2007). Building upon previous PPM research, the research presented here broadens the understanding of relationships between PPM practices and outcomes. The findings provide guidance for practitioners and directions for future research.
The past decade has seen the firm establishment of PPM as a discipline ([1] Adams-Bigelow, 2006; [41] PMI, 2006). PPM practices have a strong base in R&D management and in the management of innovation projects, and have now evolved to support the management of project-based organisations ([15] Dye and Pennypacker, 1999). This research project focuses on innovation projects only, however similar...