Evaluating the criticality of the product development project portfolio network from the perspective of risk propagation

Abstract

There are numerous projects with many interdependencies in the new product development (PD) portfolio, which can be viewed as a complex network. Due to the dependency among projects, the risks in one project may transmit to others, which will ultimately affect the success of the entire project portfolio. Thus, evaluating the priority and criticality of projects under the influence of risk propagation is a fundamental challenge for the PD project portfolio. This paper presents a risk propagation model using the Bayesian network and brittle risks. The criticality analysis presented is based on both the local and the global effects of risk in the portfolio. Firstly, we build a Bayesian network model of the portfolio based on the analysis of relationships between projects. Further, we measure the criticality of the project based on the local impact of risk propagation using Bayesian and complex networks. Then, we measure the criticality of the project based on the global impact of risk propagation using brittleness. Finally, we synthesize the calculation results of criticality to measure the integrated criticality of the portfolio, and examine an exemplar industrial portfolio to verify the effectiveness of the proposed model and method.