A decision support system for project portfolio selection

Any business enterprise which innovates, either in the development of new products or in changes to its own internal operations and processes, must deal with choices among alternative projects that compete for scarce resources. The set of resulting choices is a project portfolio. Many methodologies have been developed for dealing with this process, including techniques which evaluate individual projects or which select a portfolio from among available projects. Until now, there have been no attempts to provide a process framework for project portfolio selection which is adaptable to the needs and preferences of the corporation, and which provides an organized approach to selecting a portfolio which meets the organization's requirements. We provide such a framework, in which the choice of methodology in each stage is discretionary. Our framework consists of six operational stages, preceded by pre-process decision making, including strategy development and methodology selection. In each stage the users are heavily involved in making decisions, where they can be aided by decision support tools. The net effect of using the framework is to simplify the portfolio selection process and, since users can use methodologies they prefer, it provides flexibility. The framework can also be used as a basis for decision support, and we have developed a prototype decision support system corresponding to the framework. We describe the system and demonstrate its operation in the final stages of portfolio selection.