Business Case Control in Project Portfolios—An Empirical Investigation of Performance Consequences and Moderating Effects

Abstract

Practitioners place strong emphasis on business cases with the expectation that using business cases to inform and drive investment decisions will assist in creating value from those investments. Maximizing the value generated by project investments is a central aim of project portfolio management, and the business case provides the underlying rationale for the evaluation of the value created in each project. However, research regarding the use of business cases at a project portfolio level is scarce and there is little guidance for portfolio managers on when and how to control business cases. We identify three elements of business case control at the portfolio levelthe initial review, the ongoing monitoring during project execution, and the post-project tracking until the business case is realizedand investigate the relationship between business case control and project portfolio success. Furthermore, we analyze enablers and contingencies for the application of business case control. Based on a cross-industry sample of 183 firms we find that business case control is positively related to project portfolio success. Accountability for business case realization and corresponding incentive systems increase this positive effect. Finally, we show that portfolio complexity also positively moderates the relationship.

The role of project portfolio management in fostering both deliberate and emergent strategy

“…Building on previous research (Kopmann et al, 2015), this study defines project portfolio success as a second-order construct with five dimensions: strategic implementation success, future preparedness, portfolio balance, usage of synergies, and average product success.…”

“…Finally, we control for portfolio management formalization (Alpha = 0.93) that we measure with four items taken from Teller et al (2012). Portfolio management formalization is an indicator of the maturity of portfolio processes and should therefore be controlled for (Kopmann et al, 2015).…”

Antecedents to Decision‐Making Quality and Agility in Innovation Portfolio Management

“…Controlling intensity refers to the effort and quality of continuous screening and monitoring of the portfolio to react to changes (Müller et al, ). Portfolio controlling includes not only the regular monitoring of individual innovation projects to determine whether they are adhering to their initial goals and whether their business case is still valid but also the continuous evaluation of the overall portfolio composition and alignment, as well as interdependencies between innovation projects (Beringer et al, ; Blau, Pekny, Varma, and Bunch, ; Kopmann, Kock, Killen, and Gemunden, ; Loch and Kavadias, ). Case study research on portfolio management suggests that portfolio changes and uncertainties have a considerable impact on a portfolio, which stresses the importance of continuous monitoring and controlling activities (Petit, ).…”

Integrando Sustentabilidade Ambiental Ao Portfólio De Projetos: Estudo De Caso No Setor De Construção

“…De maneira geral, o papel da gestão de portfólio consiste em selecionar, dentre uma série de opções de projetos a se dedicar, os mais corretos em termos de sucesso. Ou seja, os que estão mais alinhados com a estratégia da empresa e assim têm maior possibilidade de apresentarem bom desempenho, agregando valor e trazendo melhor retorno à organização (KOPMANN et al, 2015).…”