PROJECT PORTFOLIO OPTIMIZATION AS A PART OF STRATEGY IMPLEMENTATION PROCESS IN SMALL AND MEDIUM-SIZED ENTERPRISES: A METHODOLOGY OF THE SELECTION OF PROJECTS WITH THE AIM TO BALANCE STRATEGY, RISK AND PERFORMANCE

This paper presents an improved managerial approach to project portfolio development using software optimization tools. A review of literature revealed a gap formed by the lack of either an established approach or a normative model of how to develop portfolios in SMEs. To bridge this gap, this paper is based on topical information and offers a method that supports decision makers in their choice of the most suitable project portfolio. This method can be implemented by the use of a simulation software tool for project portfolio optimization while considering constraints and conformity with corporate strategy. The authors conclude that the foundation of success is to formulate optimum portfolios, the configurations of which reflect all key strategic parameters. Moreover, it must be feasible to implement such a portfolio in the environment of SMEs within disposable firm resources and consider identifiable risks upon the selection of the effective project portfolio. One chosen case study evidenced the viability of this approach. The approach to project portfolio optimization discussed in this paper shows the effectiveness of the selected methodology for project portfolio optimization that in turn significantly contributes to meeting strategic goals and thus an increase in company performance and shareholders’ value. The use of a common software tool together with the right access to data collection and processing allows managers to make better decisions for the effective future allocation of resources over the chosen project portfolio