Abstract
Companies increasingly support their project portfolio management processes with specific software, and the market for IT solutions is growing. While project portfolio management information systems (PPMIS) promise to improve the quality of the management process and eventually portfolio performance, it is unclear whether they actually deliver on this promise. We lack empirical evidence regarding the actual benefits of PPMIS and knowledge on the conditions under which PPMIS application is most beneficial. Using a sample of 181 project portfolios, this study shows for the first time that PPMIS application is overall positively associated with the quality of portfolio management processes and project portfolio success. However, moderation analyses further reveal that these effects only materialize when formalization of single project management, project portfolio management, and risk management are sufficiently high. Surprisingly, the benefits of PPMIS application do not depend on portfolio complexity (size, project interdependency, dynamics).
1. Introduction
The projectification of the firm is an ongoing trend that has persisted over the last decades and requires organizations to manage portfolios of multiple projects (Bredin & Søderlund, 2006; Midler, 1995; Schoper, Wald, Ingason & Fridgeirsson, 2018). With the increasing importance of project portfolio management (PPM), a plethora of software vendors have started to offer a variety of project portfolio management information systems (PPMIS) solutions and the market is growing quickly (Ahlemann, 2009, 2013; Meyer, 2005; Handler & Stang, 2013). However, Meyer (2005) showed that less than 20% of the organizations surveyed had special software for project portfolio management, but around 83% used special software for schedule and time management in single project management. Even more recent studies show that firms still focus on single project management IT solutions (Besner & Hobbs, 2012).
6.3. Managerial implications
Overall, the results provide some practical implications for managers who want to increase the performance of their project portfolio management system. The positive effects of PPMIS are not only anecdotal but also empirically observable in a large sample. We have shown that the application of PPMIS is (on average) beneficial assuming a certain level of process formalization. However, managers need to acknowledge that the performance impact of PPMIS is indirect. Our results show that IT can positively affect the quality of the portfolio management processes, but these processes need to be clearly defined and implemented. Introduction of IT solutions without accompanying process formalization is, therefore, likely to be pointless. Managers should therefore be cautious in trying to implement a too high degree of IT support for their PPM processes or expecting too many benefits if those processes lack the necessary maturity.
