Methodological approaches to evaluating the effectiveness of a project portfolio under conditions of limited financial resources

Abstract

This document examines methodologies for evaluating an organization's project portfolio effectiveness amidst constrained financial means and considerable external environment uncertainty. Special focus is given to crafting a unified multi-criteria assessment framework integrating financial metrics, project strategic worth, and risk exposure. A method for optimizing resource distribution and flexibly modifying project portfolio composition in response to shifts in the company's operational circumstances is put forth.

Purpose. The aim of the research is to create and justify a methodological framework for evaluating an enterprise's project portfolio performance under constraints of limited financial means and significant external environment unpredictability. This framework aims to provide for optimal resource distribution, enhance the accuracy of management choices, and harmonize portfolio projects with the organization's strategic objectives.

Methods. The research employed methods of analysis and synthesis, systemic and comparative perspectives, multi-criteria decision-making (AHP, TOPSIS), economic and mathematical modeling, resource optimization, scenario evaluation, and generalization of practical experience to gauge the efficacy of a project portfolio under constraints of limited financial means.

Results. The article outlines theoretical perspectives on project portfolio management and evaluating its success within contemporary economic science and practical application. Current methodologies for gauging the effectiveness of projects and portfolios (financial, non-financial, and multi-criteria) are examined, along with their strengths and drawbacks under circumstances of fluctuating resources. The particularities of how businesses operate with restricted financial means are investigated, specifically the influence of economic unpredictability, hazards, and crisis elements on the composition of a project portfolio. The fundamental criteria and elements of project portfolio success, pertinent to contemporary circumstances, are pinpointed (financial yield, strategic worth, peril, resource viability, adaptability). Financial and multi-factor appraisal techniques are merged into a unified project portfolio framework, considering stringent fiscal limitations. A framework for the best allocation of scarce monetary means across portfolio initiatives is established, factoring in their precedence and execution hazards. A scenario-based stress-testing methodology for portfolio assessment amidst volatility is presented. A consolidated portfolio performance metric has been devised, integrating financial viability, strategic importance, and peril level.

Conclusions. The findings suggest that the offered methodological framework for evaluating the success of a project collection under constraints of scarce financial funds guarantees enhanced accuracy of management choices, improvement of resource distribution, and synchronization of the portfolio's composition with the strategic objectives of the organization.