Does Project Portfolio Management Approach Fit Smart City
Management?
Filippo Maria Ottaviani
a
, Adriano Tanda
b
and Alberto De Marco
c
Department of Management and Production Engineering, Polytechnic University of Turin,
Corso Duca degli Abruzzi 24, 10129, Turin, Italy
Keywords: Smart City, Portfolio Management, Survey.
Abstract: Nowadays public administrations have to face many challenges related to Smart City initiatives and must
coordinate these projects executing effective Smart City strategies with the adoption of an efficient portfolio
management framework. Except for a few aspects, literature about this topic is scarce so this study was carried
out as an attempt to evaluate the feasibility of adopting PMI’s Project Portfolio Management methodology to
handle Smart City initiatives. A specific survey investigating how much Smart City projects mirror portfolio
dynamics has been submitted to experts across the globe and the collected results have been analysed
according to our possibilities. Results are twofold: on the one hand, it appears that the Project Portfolio
Management approach could be beneficial for managing Smart City project sets, on the other hand, the Project
Portfolio Management seems to be a very suitable tool when the Smart City project portfolio is heavily
influenced by external stakeholders.
1 INTRODUCTION
In 2017 the world population exceeded 7.5 billion and
was estimated to grow up to 9.77 billion by 2050
(United Nations, 2017), setting urban areas at the
centre of the demographic trend. Urban growth
represents a problem and poses a multitude of threats
to both the environment and the wellbeing of modern
city dwellers, ranging from physical risks, such as
pollution, exposure and weather anomalies, to social
and economic risks, such as unemployment and
inequalities (Tanda and De Marco, 2018). City
managers need to find innovative solutions to such
challenges and this very environment makes the
paradigms of the Smart City (SC) emerge. The SC’s
goal is to foster urban economic and social growth, to
guarantee the city’s global competitiveness and to
improve its environmental sustainability and the
quality of life of its citizens (Caragliu et al., 2011;
Michelucci et al. 2017).
How to implement the SC and how to achieve its
objectives have sparked ample debate among experts.
Several authors envision the SC as a top-down
a
https://orcid.org/0000-0002-1150-9211
b
https://orcid.org/0000-0001-5459-2281
c
https://orcid.org/0000-0002-4145-2287
endeavour that city governments must plan and
execute (Zygiaris, 2013). However, this
conceptualization attracts strong criticisms
(Hollands, 2014; Greenfield, 2017), especially when
it comes to the privatization and commercialization of
public spaces and data in the pursuit of private profits
over social gains. Meanwhile, other authors argue that
a SC emerges from the fuss of bottom-up independent
initiatives developed and implemented by private
organizations and citizens (De la Peña, 2013). Given
the criticisms to this approach, such as the lack of
strategic vision or synergies (Dameri, 2017), several
authors (Walravens, 2015; Breuer et al., 2014) argue
that the truth lays in the middle: while bottom-up
initiatives are essential to the development of the SC,
its success depends not only on the capacities and
capabilities of the separate stakeholders, but also on
how they relate and collaborate with each other.
Therefore, one of the key roles of local and
national governments is to develop strategies able to
focus these bottom-up efforts and drive all the
relevant stakeholders towards the maximization of
both economic and social values. In other terms, it is
22
Ottaviani, F., Tanda, A. and De Marco, A.
Does Project Portfolio Management Approach Fit Smart City Management?.
DOI: 10.5220/0009434300220028
In Proceedings of the 9th International Conference on Smart Cities and Green ICT Systems (SMARTGREENS 2020), pages 22-28
ISBN: 978-989-758-418-3
Copyright
c
2020 by SCITEPRESS Science and Technology Publications, Lda. All rights reserved
about driving these efforts toward the creation of
public value (Fontana, 2014).
To this end, several authors conceptualize the SC
as a portfolio of “cross-sector collaboration
initiatives” (Chatfield and Reddick, 2015:1) where
the government plays the role of coordinator, funder
and regulator (Rodriguez Bolivar, 2015). Dameri and
Ricciardi (2015) argue that SCs are described by their
portfolio of smart projects and that a successful SC
strategy depends on the success of several individual
projects developed by varied stakeholders and
enabled by different technologies. It’s the role of local
governments to integrate these initiatives and to
create a collaborative network of stakeholders to meet
the challenges of the modern urban environment
(Rodriguez Bolivar, 2015; Dameri and Ricciardi,
2015).
To focus and drive the SC bottom-up efforts and
manage this complex network of stakeholders,
technologies and competing interests, public
administrations need effective management tools.
Several studies develop tools for supporting the
planning of SC initiatives. It is the case for example
of Mattoni et al. (2015) who develop a model for the
integration of different SC characteristics across
stakeholders, actions, and objectives. Similar efforts
can be found in Yenchun and Jeng-Chung (2019),
who present a structured framework supporting the
SC planning decisions of local governments, while
Chatfield and Reddick (2015) present a governance
framework to support the planning of
environmentally conscious SC projects. Other studies
focus on the evaluation of SC and their portfolios of
smart initiatives (Tanda et al., 2017).
It is the case, for instance, of the Smart City
Wheel presented by Cohen (2014) who proposes an
exhaustive set of indicators to evaluate the maturity
of a SC plan, or Lombardi et al. (2012) who present a
set of indicators for the evaluation of a city’s
performance, focusing on the relationships between
the main stakeholders. Similarly, Fernandez-Anez et
al. (2018) propose a numeric framework for the of the
alignment of the SC portfolio alignment to the city’s
strategic objectives.
Nevertheless, to our knowledge no study focuses
on a comprehensive approach to manage the city’s
portfolio of SC activities. The goal of the Project
Portfolio Management methodology is to link the
overall organizational strategy with the project
execution (PMI, 2017). Hence, a comprehensive
approach to portfolio management should help
planners focus on the organization’s long-term
objectives (Munson and Spivey, 2006), ensure the
optimal distribution of resources between projects
(Archer and Ghasemzadeh, 1999), guarantee the
fruitful collaboration between stakeholders (Dameri
and Ricciardi, 2015), and improve the overall value
generated by the projects in the portfolio (Laursen
and Svejvig, 2016). At first glance, a structured
approach such as the Project Management Institute’s
(PMI) Project Portfolio Management (PPM) appears
to be a perfect fit to help cities manage and align their
SC initiatives toward achieving their strategic
objectives. However, the PPM approach has its focus
on managing project portfolios inside an
organization, where the full portfolio life cycle can be
planned, executed, and monitored. In their analysis,
Maceta and Berssaneti (2019) highlight that external
stakeholders have a strong influence on the
management of public project portfolios. Indeed, as
discussed earlier, the SC is a multi-stakeholder
phenomenon developed by different actors, with
different technologies, to achieve possibly conflicting
objectives (Rodriguez Bolivar, 2015).
Given the lack of studies on the feasibility of
implementing a PPM approach in multi-stakeholder
SC portfolios, this study proposes an investigation
about the possibility of using it as a framework to
support public administrations in their SC
management efforts. Through an exploratory survey,
this paper investigates whether cities can manage
their SC portfolios with a PPM approach, and which
of the six PPM performance dimensions SC PPM
they are more focused on.
To this end, this study is structured as follows.
First, the methodology and survey design are
explained, followed by a discussion of the responses.
Then, conclusions are drawn and possible future
research directions are proposed.
2 METHODOLOGY
The intent of this study is to investigate whether PPM
could represent an effective approach to handle the
SC initiatives according to their reflecting, as a
collection, the project portfolio dynamics.
We designed a survey containing eight main
questions and addressed it to decision-makers
working in public SC and innovation offices.
The first question, Q1, aimed to understand
whether public SC and innovation offices approach the
management of their SC initiatives through a PPM
approach. The possible answers to this question ranged
from 1 (not at all) to 5 (absolutely) on a Likert scale.
Q1. To your knowledge, does the office involved in
guiding, enabling and supporting the
Does Project Portfolio Management Approach Fit Smart City Management?
23
development of SC projects follow a Project
Portfolio Management approach?
Question 2 to 7 were designed to investigate the
portfolio management dimensions, i.e. the best
practices areas where cities are mostly focused,
following the definitions given by the 4
th
edition of
the Portfolio Management standard (PMI, 2017). A 1
to 5 Likert scale was used to gather the responses of
these questions, with 1 being the minimum and 5 the
maximum values.
Q2. To your knowledge, to what degree does your
city ensure that investments and efforts in
developing and implementing SC projects are
aligned with the city’s strategic plans?
Q3. To your knowledge, to what degree does your
city implement a formally structured form of
governance for the management of SC
projects?
Q4. To your knowledge, to what degree is your city
able to assess its capabilities and capacities
when managing the development and
implementation of SC projects?
Q5. To your knowledge, to what degree does your
city focus on citizens and, more in general,
stakeholder engagement when managing the
development and implementation of SC
projects?
Q6. To your knowledge, to what degree does your
city focus on value creation when choosing and
managing the development and
implementation of SC projects?
Q7. To your knowledge, to what degree does your
city focus on the identification, assessment and
management of risks emerging from the
development and implementation of SC
projects?
Finally, the last question Q8 aimed to understand
the type of approach taken by the cities in fostering
their SC initiatives and to evaluate whether the
implementation of PPM is actually related to the type
of approach undertaken by the cities to handle SC
efforts or not. Three possible answers were presented:
completely top-down driven by the local government
(A1, chosen by 32% of the respondents), bottom-up
efforts driven by the city’s top-down strategic
direction (A2, chosen by 61% of the respondents)
and, finally, purely bottom-up with minimal
intervention from the public administration (A3,
chosen only by 7% of the respondents).
Q8. How would you describe the approach taken by
your city in developing and implementing SC
projects?
The survey was submitted as follows. First,
interviewees were asked both in which city they
worked in and what their role is inside the public
administrations, the default options to choose were
“politician”, “director”, “manager”, and “other”.
Then, questions Q1, to Q8 were asked. As the
terminology and definitions used may have not been
shared by the interviewees, each of these questions
where preceded by a brief explanation. Finally, the
survey was introduced by a cover letter that explained
the objective of the study and announced the
possibility to receive feedbacks once results were
collected and analysed, as in this study. Interviewees
were also informed about the expected time required
to complete the survey and that their data anonymity
would have been be protected.
The survey was administered online to 190 SC
and innovation offices distributed worldwide. Cities
were selected considering the degree of development
of their SC programs, highlighted by their promoted
SC activities and initiatives and by their positions in
national and international SC rankings. By sending
the survey to the specific offices in charge of the city
SC development, and therefore receiving answers
from informed professionals and decision makers, we
were able to mitigate the central tendency bias typical
of any Likert scale-based investigation (Weisberg,
1992).
We received 28 answers for a 14.7% response
rate. Figure 1 displays the distribution of the
respondents’ roles in the public administration while
Figure 2 shows their geographical distribution.
Figure 1: Respondents’ roles distribution.
3 RESULTS AND DISCUSSION
Figure 3 shows the box plot distributions of the
responses to questions Q1 to Q7.
The responses show a relatively consistent
medium to high degree of adoption of the PPM
approach and a consistent focus on its six main
dimensions, without showing any major differences
Manager,
18,64%
Director,
2,7%
Other;8;
29%
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24
Figure 2: Respondents’ geographical distribution.
Figure 3: Box plot distributions for responses Q1 to Q7.
between them. Hence, from these data it is possible to
draw the first main consideration for which cities
appear to adopt the PPM approach when managing
their SC initiatives and to focus on all six PPM
performance dimensions in similar measure.
Nevertheless, while the central tendency bias has
been addressed during the design of the survey, the
results presented in Figure 3 do not allow to ignore
the possibility of having an acquiescence bias, also a
typical criticality of a Likert scale-based investigation
(Watson, 1992). However, the results in Figure 4
allow to discard this occurrence.
Figure 4 shows the box plot distributions of how
each city responded to all questions. From these
results it is possible to observe that most cities have
either a medium to high or a medium to low degree of
adoption of both PPM and its main dimensions and
that no city shows a neutral position. Hence, these
results allow to discard the possibility of an
acquiescence bias within the responses.
These results also confirm the first main
consideration previously described: while the degree
of adoption of the PPM approach among cities is quite
different, the responses distribution for each city is
Does Project Portfolio Management Approach Fit Smart City Management?
25
Figure 4: Box plot distributions of the responses for each city.
Figure 5: Box-plot distribution of answers depending on SC management approach.
quite narrow. Each city appears to be focusing on the
six main PPM dimensions quite evenly, suggesting
that a homogeneous and balanced adoption of the
PPM approach is beneficial in helping cities manage
their SC portfolios and that none of the PPM
dimensions is more important than the others.
Hence, these first results appear to confirm the
validity of the PPM approach and its comprehensive
adoption in supporting the management of a SC
portfolio. Nevertheless, from these results it is not
possible to respond to the main criticality raised
earlier: whether it is possible to use the PPM approach
to manage a SC portfolio heavily dependent on
external stakeholders. As portrayed in Figure 6, this
is particularly critical as, from the responses to Q8,
only 32% of the cities have a purely top-down
approach in developing their SC initiatives (A1),
while in 61% of cases, the city concentrate its efforts
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26
in providing a top down strategic driving focus able
to enable the bottom up efforts of multiple SC
stakeholders such as private organizations, citizens,
and communities (A2).
Figure 6: Q8 results.
Figure 5 addresses this critical issue as it shows
the box plot distributions of the responses of the first
seven questions, Q1 to Q7, similarly as for Figure 3
but divided by the relative Q8 answers: completely
top-down (A1), bottom-up efforts driven by the city’s
top-down strategic direction (A2), and purely bottom-
up (A3).
From this figure it is possible to observe that,
unsurprisingly, cities with a purely bottom-up
approach to the SC (A3) have a much lower degree of
adoption of PPM compared to those cities that have a
more structured top-down approach. However, a
second more interesting consideration emerges: the
average degree of the PPM adoption and focus on its
six dimensions are quite similar for cities with a more
structured SC top-down approach (A1) and for those
with a hybrid approach where the bottom-up SC
efforts are guided and coordinated by public top-
down portfolio strategies (A2).
Hence, from the analysis of the data presented in
Figure 5 it is possible to answer our main research
question. Indeed, while the results presented in Figure
3 suggest that a balanced implementation of the PPM
approach is beneficial for the management of SC
portfolios, it is still unclear whether this approach
could be suitable for SC portfolios heavily influenced
by external stakeholders such as private
organizations, citizens, and communities. The
analysis of the data presented in Figure 5, however,
appears to confirm this possibility, suggesting that the
PPM approach can be suited in even for the
management of SC portfolios heavily influenced and
driven by the bottom-up efforts of external
stakeholders.
4 CONCLUSIONS
The SC can be conceptualized as a portfolio of “cross-
sector collaboration initiatives” (Chatfield and
Reddick, 2015:1) where the government plays the
role of coordinator, funder, and regulator (Rodriguez
Bolivar, 2015). Given these considerations, the PPM
approach appears to be a perfect fit to help cities
manage and align their SC initiatives toward
achieving their strategic objectives. However, there is
little research about the management tools public
administrations could adopt and none of these
contributions address the feasibility of using the PPM
to manage SC project portfolios. This study proposes
to address this literature gap by investigating, through
an exploratory survey, the PPM approaches adopted
by cities.
From this survey two main considerations
emerge. First, it appears that a balanced adoption of
the PPM approach is beneficial in helping cities
manage their SC project portfolios. Second, it appears
that the adoption of the PPM can be a suitable tool
even when managing SC portfolios is strongly
influenced by external stakeholders such as private
organizations and citizens.
This Paper presents a theoretical contribution in
the field of the management tools approaches for the
SC where little research has been made in the past. It
provides an exploratory analysis on the feasibility of
the adoption of the PPM approach to manage SC
portfolios, giving scholars a clearer understating on
how cities manage their SC portfolios and their
priorities. Future studies will need to expand the reach
of this investigation trough larger surveys, direct
interviews and workshops with practitioners and
decision-makers to better understand how public
administrations can implement a correct PPM
approach when handling SC initiatives. Finally,
further research is needed to understand whether the
adoption of a PPM approach is related to the citys
social or economic characteristics such as population
or GDP.
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A3,2,7%
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