A performance measurement framework in portfolio management

TLDR

The paper presents a framework to better understand and support portfolio management by illustrating a case study that identifies and measures success parameters and offers empirical insights into performance measurement tools. The authors employ a mixed qualitative–quantitative case study, gathering semi‑structured interview data from decision makers, conducting bibliographic research, and applying a constructivist multicriteria decision‑aiding methodology to build the framework. The framework enables visualization of decision‑maker‑valued criteria, supports ordinal and cardinal performance measurement, facilitates comparison and ranking of proposals, improves project proposals, and has aided stakeholder negotiations and the chief project officer in prioritizing strategic projects.

Abstract

Purpose The main aim of this paper is to present a framework to create a better understanding of the context and aid the portfolio management process. The paper seeks to present a case to illustrate the proposed methodology, identifying and measuring the success parameters for a project in a portfolio. Design/methodology/approach The research method is a qualitative and quantitative mixture and it is presented as a study case. The primary data were obtained using semi‐structured interviews with decision makers. Bibliographic research is used in order to construct the theoretical framework and the intervention instrument adopted is the multicriteria decision aiding methodology – constructivist (MCDA‐C). Findings The methodology allows the criteria that must be taken into account, according to the decision makers' values and preferences in the project selection and sorting processes, to be visualized. The framework supports the ordinal and cardinal measurement of the project performance, making it possible to compare and rank proposals, as well as providing a process to improve project proposals. Practical implications This process has helped in negotiations between stakeholders in a portfolio context and, consequently, has helped the chief project officer (CPO) to select and prioritize strategic projects within the demand for new products. Originality/value This paper offers an empirical understanding of the application of performance measurement to portfolio management context and identifies complementary tools in this interdisciplinary area.