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IBM Journal of Research and Development

Business Value through Software Development   Abstract
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Small software organizations need explicit project portfolio management

by J. Vähäniitty,
K. Rautiainen,
and C. Lassenius
The concept of managing new product development projects as an explicit portfolio originates from the context of large organizations. However, the question as to whether explicit portfolio management is relevant for small organizations is rarely discussed. We conducted a qualitative multiple-case study of six small organizations (with 15–40 people) that developed software and provided related services. Five of the organizations did not practice explicit portfolio management. They also seemed to suffer from problems that, in the literature, are considered symptomatic of inadequate portfolio management, such as having too many simultaneous projects, overcommitment in terms of workload, and ineffective executive decision making. In one of the studied organizations, the management personnel had recognized the need for explicit portfolio management and introduced portfolio management practices such as regular reviews of the project portfolio, appointing specific people for resolving cross-project conflicts, and limiting the number of concurrent projects to which a person can be assigned. The personnel we interviewed perceived clear improvements with respect to various challenges since the introduction of these practices. Our preliminary study suggests that explicit portfolio management is relevant for small software organizations, at least in cases in which the development personnel possess multiple roles and responsibilities and are concurrently performing many different types of activities.

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