Project selection based on intellectual capital scorecards

Abstract

In this paper we present a tool for the selection of a project portfolio in knowledge intensive organizations. Standard methods mostly focus on project selection on the basis of expected returns. In many cases other strategic factors are important such as customer satisfaction, innovation capacity, and development of best practices. These factors should be considered in their interdependence during the process of project selection. Here the point of departure is the intellectual capital scorecard in which the indicators are periodically measured against a target. The scores constitute the input of a programming model. From the optimal portfolio computed, clear objectives for management can be derived. The method is illustrated in an industrial case study. Copyright © 2005 John Wiley & Sons, Ltd.