Updated Conceptual Framework for Data Analysis and Reporting

The proposed updated conceptual framework is presented in Figure 5.1 and is composed of two orders of capabilities, as suggested by (Collis, 1994) as discussed in section 1.7.1.5, on page 71:

a first order of capabilities, more operational, leading to the constant reconfiguration and re-alignment of resources based on sensed changes in the environments; and a second order leading to transformations, process improvements, and to changes in

other organizational aspects impacting PPM. 5.2.1 Dynamic Capabilities Leading to Reconfiguring

The first-order dynamic capabilities deal with uncertainty for a given project portfolio and the definitions of sensing and seizing remain the same i.e.:

sensing is defined as organizing mechanisms to identify, filter, and interpret changes and uncertainty which might affect the project portfolio; and

Figure 5.1: Graphical Representation of Conceptual Framework after Data Analysis.

seizing is defined as organizing mechanisms for deciding changes to the project portfolio once a potential need for change has been sensed.

reconfiguring is defined as the organizing mechanisms to modify the project portfolio and to allocate human and financial resources within the portfolio. This includes organizing mechanisms:

- to change the project portfolio structure, including any changes in the project configuration (new projects, new sub-portfolios, termination of projects) and project scope prioritization;

- to modify the project scope and project interdependencies; and

- to change the allocation of financial and human resources to the projects in the portfolio. Management of Project Portfolios Seizing To decide changes to project portfolios Sensing

To identify, filter, and interpret changes and uncertainty

Reconfiguring

To modify project portfolios and to re- allocate resources Second-Order Seizing Second-Order Sensing Transforming Modifying Project Portfolios Processes

To decide how to modify first-order mechanisms and other organizational aspects affecting PPM. To identify, filter and interpret

the performance of the first- order mechanisms and to identify new mechanisms

To modify the first-order mechanisms or to modify other organizational aspects affecting PPM Organizing Mechanisms Organizing Mechanisms

5.2.2 Dynamic Capabilities Leading to Transforming

The second-order dynamic capabilities also involve three groups of organizing mechanisms, in this case second-order sensing3, second-order seizing, and transforming:

Second-order sensing is defined as the organizing mechanisms to identify, filter and interpret the performance of the first-order dynamic capability (in this case PPM) as well as the identification and development of new practices, tools, and methods (see Figure 5.2). While the focus of the first-order sensing is on external and internal conditions which might have a direct impact on the portfolio content (i.e. project scope, portfolio structure, resource allocation, and prioritization), the second-order sensing focuses on the ways of working, practices, and standards which might be identified and introduced in the organization, or developed internally.

Figure 5.2: Second-Order Sensing and Seizing Leading to Transforming.

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Because the terms sensing and seizing were a lso used for this second level, the e xpressions second-order sensing and second-order seizing are introduced to avoid confusion with the processes of the first order leading to reconfiguring.

Seizing Sensing Reconfiguring Second-Order Seizing Second-Order Sensing Transforming External and Internal Environments

Second-order seizing is defined as the organizing mechanisms which are put in place to decide how to modify the first-order mechanisms and how to modify other organizational aspects affecting PPM. These changes might include, but are not limited to: corrective actions, new routines, structures, and tools to improve the performance and to support PPM.

Transforming is defined as the organizing mechanisms to modify the first-order mechanisms or to modify other organizational aspects affecting PPM. This includes:

- modifying the first-order sensing-seizing-reconfiguring mechanisms used in PPM (for example changing the governance structure, modifying the rules to structure the project portfolio used for reconfiguring, adding a new sensing mechanism), as shown in Figure 5.3; and

- introducing new structures, processes, or tools to support the PPM activities. This might not directly result in changes in the first-order sensing-seizing- reconfiguring mechanisms (for example. modifications to the software development process, new architecture to support a more flexible product structure). Figure 5.3 : Transforming.

Seizing

Sensing

Reconfiguring

Second-Order

Seizing

Second-Order

Sensing

Transforming

5.2.3 Higher–Order Capabilities

It should not be forgotten, that there exists a third-order of dynamic capability related to the portfolio selection itself, as displayed in Figure 5.4. This strategic order of dynamic capability corresponds to what is most often depicted in the literature on dynamic capabilities. Budgets and human resources are allocated to project portfolios based on vision, mission, and strategies. Changes in external environments have direct consequences on these decisions.

This research studies a number of portfolios which have been established for a number of years and for which a budget, a vision, and a mission have been approved. The process leading to the establishment of these portfolios is not formally investigated. This explains why the third order (strategic) level, depicted in Figure 5.4, has not been developed in the updated conceptual framework of Figure 5.1.

The updated conceptual framework described in this section is used to structure the presentation of the results. The following Chapter present the different types of uncertainties and the organizing mechanisms identified in the four portfolios according to the conceptual framework discussed in this section.

Figure 5.4: Three Orders of Dynamic Capabilities.

Management of Project Portfolios Seizing Sensing Reconfiguring Second-Order Seizing Second-Order Sensing Transforming Modifying the Project Portfolios processes Third-Order Seizing Third-Order Sensing Transforming + Reconfiguring Selecting and prioritizing portfolios Strategic Process improvements Operational

6_{CHAPTER VI}

TYPES OF UNCERTAINTIES

This chapter presents the types of uncertainties that were identified by the interviewees in the four project portfolios. This was used to determine the frequency of occurrence and their impact on the project portfolios. A link to the sensing mechanisms was also sought