Project portfolio risk analysis with the consideration of project interdependencies
Engineering, Construction and Architectural Management
ISSN: 0969-9988
Article publication date: 5 November 2021
Issue publication date: 14 March 2023
Abstract
Purpose
Comprehensive project portfolio risk (PPR) analysis is essential for the success and sustainable development of project portfolios (PPs). However, project interdependency creates complexity for PPR analysis. In this study, considering the interdependency effect among projects, the authors develop a quantitative evaluation model to analyze PPR based on a fuzzy Bayesian network.
Design/methodology/approach
In this paper, the primary purpose is to comprehensively evaluate project portfolio risk considering the interdependency effect using a systematical model. Accordingly, a fuzzy Bayesian network (FBN) is developed based on the existing studies. Specifically, first, the risks in project portfolios are identified from the project interdependencies perspective. Second, a fuzzy Bayesian network is adopted to model and quantify the interaction relationships among risks. Finally, the model is implemented to analyze the occurrence situation and characteristics of risks.
Findings
The interdependency effect can lead to high-stake risks, including weak financial liquidity, a lack of cross-project members and project priority imbalance. Furthermore, project schedule risks and inconsistency between product supply and market demand are relatively sensitive and should also be prioritized. Also, the validity of this risk evaluation model has been proved.
Originality/value
The findings identify the most sensitive risks for guaranteeing portfolio implementation and reveal interdependency effect can trigger some specific risks more often. This study proposes for the first time to measure and analyze project portfolio risk by a systematical model. It can help systematically assess and manage the complicated and interdependent risks associated with project portfolios.
Keywords
Acknowledgements
This work was supported by the National Natural Science Foundation of China [grant number 72002018], Ministry of Education Humanities and Social Sciences Fund [grant number 17XJC630001], Youth Innovation Team of Shaanxi Universities [grant number 21JP009], Innovation Capacity Support Plan of Shaanxi Province [grant number 2020KJXX-054], Major projects of Shaanxi Social Science Federation [grant number 2021HZ0777], the Fundamental Research Funds for the Central Universities [grant numbers 300102230613, 300102231639], the Key Research and Development Program of Shaanxi Province [grant number 2020SF-388] and Social Science Planning Fund of Shaanxi Province [grand numbers 2020R028]. The authors would also like to acknowledge the colleagues who provided guidance on the logic and writing of the paper.
Declaration of interest: None
Citation
Bai, L., Shi, H., Kang, S. and Zhang, B. (2023), "Project portfolio risk analysis with the consideration of project interdependencies", Engineering, Construction and Architectural Management, Vol. 30 No. 2, pp. 647-670. https://doi.org/10.1108/ECAM-06-2021-0555
Publisher
:Emerald Publishing Limited
Copyright © 2021, Emerald Publishing Limited