Organizational Viewpoints in Project Companies: Project Portfolios and the Maturity of Project Operations

Organizational integration was given trust in the 1960s as the matrix organization form was introduced to manage complex and unique efforts that required a cross-functional and cross-disciplinary approach to resources. Ever since, the management of multiproject environments has focused on rather operative schemes. For example, many companies focus their management efforts on resource sharing among multiple projects at a detailed operative level.

Project offices (or project support offices) belong to the often-suggested organizational solutions to support project operations in multiproject environments. Project offices adopt either a project follow-up or supporting function, and the office is designed to serve in a staff role between the responsible company management and project management parties, serving as a link between lines and projects. Furthermore, a project office may be a center of excellence and a home base for project managers, methodologies, tools, and support (Block 1999; Hobbs et al. 1999; Knutson 1999; Lullen and Sylvia 1999). Project maturity models aim at supportive managerial help in organizations that conduct similar projects in a repetitive manner. Maturity models enable standardization of project activities in a company. There are several maturity models designed for different types of environments, such as software engineering, product development, R&D, and software acquisition. All maturity models include five levels. At the lowest levels, some form of systematic project management is implemented in projects. As we move toward higher levels, the project management practices become standardized across projects in the organization. The high end of the maturity continuum includes definition of measures for projects as a whole, implementation of systematic measuring, and performance improvements based on the measured data (Fincher and Levin 1997; Goldsmith 1997; Cusick 1999). Furthermore, many project management software packages include multiproject functionalities that support standardized project operations in an effective manner.

Our conclusion is that the current project office, project maturity, and software solutions in industry represent support for activities conducted mainly at the operative level. A tighter and more direct management link between the company management and the projects is needed to integrate projects into the strategic business management of the company. Strategic project management and project portfolio management practices should be introduced to supplement the current monitoring-and supporting-oriented procedures (Dobson 1999; Dye and Pennypacker 1999b; Jacob 1999). The objectives of project portfolio management are maximizing the value of the portfolio, balancing the portfolio, and linking projects with strategy (Dye and Pennypacker 1999a; Cooper et al. 1999). The fundamental questions will be the problems of how to organize the whole corporation with a relevant responsibility scheme and how to organize decision-making and objective setting concerning projects. Many important considerations of the future development of project management relate to the wider organizational context, and more specifically to these questions (Artto 2001):

• What are the project's interrelations with other organizational structures such as other projects and the line organization?

• What is the project's role in fulfilling the strategic objectives set in the company management, and what are the appropriate procedures to manage projects toward profit?

These issues relate also to questions of relevant information content, information sharing, decision-making, and aspects of learning in the project company.