Critical Interactive Risks in Project Portfolios from the Life Cycle Perspective

Abstract

The need for enterprises to manage project portfolio risks over the life cycle has become increasingly prominent. It is essential to evaluate and manage them to achieve project portfolios and organizations’ success. Unlike project risk, project portfolio risk is more complex and uncertain due to risk interactions. Risk management is unsatisfactory in project portfolios due to the lack of awareness of risk interactions and the life cycle. The purpose of this paper is to identify the critical risks of project portfolios over the life cycle considering risk interactions. We primarily verified 20 identified risks through a questionnaire survey and an expert interview method and evaluated the interactions among them using the Delphi method. Furthermore, risk interactions were analyzed using the social network analysis (SNA) methodology to determine the important risks. Finally, a comprehensive evaluation of important risks was carried out to identify critical risks according to the evaluation principles. The results identified six critical portfolio risks, two key risk contagion paths and revealed risk characteristics of different life cycle phases. This research considerably contributes to the body of knowledge pertaining to project portfolio management that will enable organizations that implement project portfolios and similar multi projects to emphasize critical risks.