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Innovation Project Portfolio Management

Soontrakom, Vorapol (2012-05-30)

Innovation Project Portfolio Management

Soontrakom, Vorapol
(30.05.2012)

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Companies today are forced to innovate in order to remain within business. Such innovation
projects undertaken by the companies are defined in this study as creative ideas which have been
managed through “Stage-Gate” innovation process. This process is used to manage innovation
projects as they proceed from being newly created to ready for launching/implementing. This has
ensured that the companies manage the innovation project right.

However, with so many new creative ideas the companies can come up within limited resources, the
companies must rely on Innovation Project Portfolio Management (IPPM) to ensure that they are
managing only the right innovation projects. Although, there are many tools and techniques
available for use within Project Portfolio Management, there is still no consensus on which are the
most effective and no standard framework has been established especially for IPPM.


Thus, this study proposes a practical framework for which individual innovative organization can
follow as a guideline to manage its innovation project portfolio. The study theoretically first
addresses the key differences between project portfolio management of innovation projects and
other traditional projects - one of which is the stage nature of innovation projects due to their
unclear objectives from the beginning compare to clearly established objectives of traditional
projects. Secondly, different tools and techniques which can be used are examined based on the
three goals of IPPM: (1) Maximizing the Value of Innovation Project Portfolio: Financial Methods,
Decision Trees, Scoring Models and Checklists; (2) Balancing Innovation Project Portfolio: Visual
Representations; and (3) Aligning Innovation Project Portfolio with Strategy: Bottom-Up (Scoring
Models with Strategic Criteria) and Top-Down (Strategic Buckets). Finally, the two approaches in
which IPPM can be integrated with Stage-Gate innovation process are discussed: (1) Gates-
Dominated; and (2) Portfolio Reviews-Dominated.

Practically, this study investigates IPPM of a case organization, and through analysis of the case
study results proposes a practical framework for case organization to improve its current
management of innovation project portfolio. This framework is then generalized to propose a final
practical framework or guideline for which an innovative organization can follow to manage its
innovation project portfolio.
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