Does Project Portfolio Management Approach Fit Smart City

Management?

Filippo Maria Ottaviani

, Adriano Tanda

and Alberto De Marco

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

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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

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

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?

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

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%

SMARTGREENS 2020 - 9th International Conference on Smart Cities and Green ICT Systems

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?

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

SMARTGREENS 2020 - 9th International Conference on Smart Cities and Green ICT Systems

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 city’s

social or economic characteristics such as population

or GDP.

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