Building a project portfolio in the social enterprise. Analysis and implementation of project selection methods. Case study of SIFE Salford.

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UNIVERSITY OF SALFORD

BUSINESS SCHOOL

BUILDING A PROJECT PORTFOLIO IN THE SOCIAL

ENTERPRISE. ANALYSIS AND IMPLEMENTATION OF

PROJECT SELECTION METHODS. CASE STUDY OF SIFE

SALFORD.

MARIUSZ ANDREASIK

Dissertation submitted in partial fulfilment of requirements for the degree of MSc in Project Management.

University of Salford 2009.

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Declaration

I declare that no part of this dissertation has been taken from existing published or

unpublished material without due acknowledgement and that all secondary material used

therein has been fully referenced.

Signed ..............................................

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Abstract

Title of dissertation: Building a project portfolio in the social enterprise. Analysis and

implementation of project selection methods. Case study of SIFE Salford.

Author: Mariusz Andreasik

Summary:

The dissertation aims to help the social enterprise – SIFE Salford with creating the portfolio

of projects. The paper focuses on selection method that the organization may use while

choosing from the projects submitted by external enterprises. This process is very complex

and it is often difficult to make sound decisions, therefore introducing the methods and the

process is essential and beneficial for every organization. The author examines two

methods: the scoring and Analytical Hierarchy Process (AHP). The analysis of those methods

is made to decide which one is more suitable and useful for a studied organization.

Furthermore, the methods are analysed and studied how they can be applied and used in

social enterprises. The survey and interviews with experts from the field aim to create

guidelines for the SIFE Salford, how to use the techniques and benefit from them.

Consequently, the President and Directors of the enterprise are trained during interview

process to use studied methods that they can easily implement in upcoming academic year.

This condenses the aim of the dissertation, which is to experiment the selection methods

that could be a practical use for a social enterprise to ease a process of selecting process. It

also introduces the concept of project portfolio management into the sector.

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Table of Content

I. Chapter: Introduction ................................................................................................................. 1

1. Introduction ............................................................................................................................... 1

2. Research objectives .................................................................................................................... 5

II. Chapter: Literature review ......................................................................................................... 7

1. Project ........................................................................................................................................ 7

2. Project Portfolio ......................................................................................................................... 7

2.1. Project Portfolio Management ............................................................................................... 8

2.2. Balanced Portfolio .................................................................................................................. 9

2.3. Operating a Project Portfolio ............................................................................................... 11

2.3.1. Establishing Portfolio Strategy ......................................................................................... 12

2.3.2. Evaluating Project Alignment to the Portfolio Strategy .................................................... 12

2.3.3. Prioritizing and selecting Projects .................................................................................... 13

2.3.4. Selecting Balanced Portfolio Using the Prioritized Projects .............................................. 14

2.3.5. Managing the Active Projects ........................................................................................... 14

2.3.6. Summary of project portfolio development ..................................................................... 15

2.4. Project life cycle ................................................................................................................... 15

2.5. Benefits of project portfolio ................................................................................................. 17

2.6. Problems .............................................................................................................................. 18

3. Project Selection methods ....................................................................................................... 19

3.1. Criteria weighting method ................................................................................................... 20

3.2. Analytical Hierarchy Process method ................................................................................... 24

III. Chapter: Methodology ............................................................................................................. 33

1. Secondary research .................................................................................................................. 36

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2. Primary research ...................................................................................................................... 37

Stage 1: Survey ................................................................................................................................. 39

Stage 2: Interview ............................................................................................................................ 41

Stage 3: Expert Choice assessment .................................................................................................. 43

3. Ethical issues ............................................................................................................................ 49

Summary .......................................................................................................................................... 50

IV. Chapter: Research Findings and Results ................................................................................... 51

1. Survey Results .............................................................................................................................. 51

2. Interview results........................................................................................................................... 54

3. Results of scoring method assessment ........................................................................................ 59

4. Assessment results and applications of the Expert Choice ........................................................... 60

V. Analysis and Discussion ............................................................................................................ 61

VI. Conclusions and recommendations ......................................................................................... 71

Reflection on the extent to which the research aims were accomplished ........................................... 73

Appendix 1: Survey implementation .................................................................................................... 74

Appendix 2: Project Descriptions ......................................................................................................... 76

Appendix 3: Interview questions .......................................................................................................... 79

Appendix 4: Overview of SIFE Salford (studied social enterprise) ........................................................ 80

Appendix 5: Transcript of interviews ................................................................................................... 81

Appendix 6: Scoring method assessment results ................................................................................. 87

Appendix 7: AHP method assessment results ...................................................................................... 91

References ........................................................................................................................................... 95

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Table of Graphs

Graph 1. Different positions and roles of social enterprises .................................................................. 2

Graph 2. Bubble diagram of a portfolio of new-product projects ........................................................ 10

Graph 3. Project Portfolio Management .............................................................................................. 11

Graph 4. Project Life Cycle ................................................................................................................... 15



Graph 7. Portfolio project life cycle...................................................................................................... 17

Graph 8. Process of managing portfolios successfully.......................................................................... 20

Graph 9. Advantages of the Analytic Hierarchy Process ...................................................................... 30

Graph 10. Four elements of research................................................................................................... 33

Graph 11. Types of research ................................................................................................................ 35

Graph 12. A classification of secondary data ....................................................................................... 37

Graph 13. Expert Choice main screen .................................................................................................. 45

Graph 14. Expert Choice criteria analysis ............................................................................................. 46

Graph 15. Expert Choice project assessment screen ........................................................................... 46

Graph 16. Expert Choice decision screen 1 .......................................................................................... 47



Graph 19. Detailed survey analysis ...................................................................................................... 52

Graph 20. Combined results of AHP assessment ................................................................................. 60

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List of Tables

Table 1. Scoring method ...................................................................................................................... 22

Table 2. Explanation of rating answers ................................................................................................ 40

Table 3. Categories of problems that have been addressed by Expert Choice ..................................... 44

Table 4. Ranking of the criteria ............................................................................................................ 53

Table 5. Results of scoring method assessment ................................................................................... 59

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Preface

Acknowledgements

Special thanks to Jan Andreasik how inspired me to analyse the project portfolio

management for the SIFE Salford, after expressing big interest in the enterprise activities.

Further thanks to Marta Karaś for supporting me throughout the process of researching and

writing up the dissertation.

Thanks to Łukasz Szczekala for a company while writing the dissertation, especially during

the breaks between the chapters or sections.

I would like to thank my supervisor Kevin Kane for the great and smooth cooperation while

working on this dissertation.

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Personal statement

After two years of developing the social enterprise – SIFE Salford as a Chairman and then

Vice-President, leading the team to semi-finals of United Kingdom national competitions, I

have decided to research techniques that could help with further development of the

operations. The main challenge we faced was choosing the right projects to commit to. We

had made few wrong decisions, when we worked on a project which was not beneficial to

our organization and did not meet our strategic objectives; therefore it was complete waste

of resources and time. Consequently, I focused this dissertation around the methods that

could help future leaders avoid such mistake. Accordingly, I believe that throughout the two

years we developed an interesting project portfolio that needs appropriate management

and approach.

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I. Chapter: Introduction

1. Introduction

Background of the research

Social enterprises are independent businesses that provide services, goods and trade for a

social purpose and are non-profit distributing (Policy Action Team 3, 1999). In social

enterprises profits are used to create more jobs and businesses and to generate wealth for

the benefit of the community (Community Business Scotland, 1991). Therefore, the role of

the social enterprises is growing and it has been pursued by governmental and

entrepreneurial agencies, to boost the trade within the businesses (Ridley-Duff, 2007). The

following graph represents the forces influencing the social enterprises.

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Graph 1. Different positions and roles of social enterprises (Ridley-Duff, 2007)

From the graph above the observation can be drawn that social enterprises are key element

of strategy of businesses, government and associations. Also they help society, communities

and families develop. This is achieved through the services and goods they provide, but

mainly the projects which they work on. Those are funded by those organizations as part of

their Corporate Social Responsibility strategy or as a result of negotiations with Councils,

who ask for help in the area.

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Significance and importance of the research

According to Cabinet Office (2008) there are at least 55,000 social enterprises operating in

the United Kingdom. And the UK government prepared the Social Enterprise action plan,

which aims to increase a number of them and provide help, advice and support for those

who want to start this type of business. BusinessLink.gov.uk has been set up as a

partnership of the government and businesses to provided that to everyone who thinks

about starting their own business (BusinessLink.gov.uk, 2009).

On the other hand, the businesses and associations also provide support for social

enterprises as well as funding for the projects in the given area of interest of given

companies. For example Setas (Social Enterprise Training and Support, 2009) listed just 20

sources of funding from various associations and companies for start ups and community

projects.

Many social enterprises focus on winning grants to carry out the projects that make change

in the local community and individual lives. Those are funded by various bodies who want to

help achieve that aim. However, established social enterprises do not have to apply for

grants and finances. They are being approached by organizations who ask for help to carry

out given projects.

Therefore, they face the problem of having many project applications, which cannot be

completed due to limited resources. There is a need for prioritizing and categorizing projects

in order to accept them into project portfolio of given organization. Many project

applications are unclear and the benefits are not visible from the beginning, making it

harder to asses. Accordingly, the social enterprises struggle to choose the appropriate

projects to carry out, which will benefit them and community they serve.

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Aim of the research

To solve this problem the Multi-Criteria Decision Analysis (MCDA) needs to be implemented.

The aim of MCDA methods is to support decision-makers with indentifying problems,

system values, objectives they have and other parties involved. This is made through

exploration of above in the context of problem to guide them in identifying a preferred

course of action (K.M. Al-S. Al-Harbi, 2000). In this case, allowing them to choose the most

suitable and achievable project. This means that resources available will allow to complete

the project successfully, and that will be within the aim and mission of the organization. One

of the MCDA methods is Analytical Hierarchy Process (AHP) method, which will be

introduced in methodology chapter.

The implementation of the AHP method will be studied on the case of social enterprise

called SIFE (Students in Free Enterprise) Salford. This is a student organization which has

very ambitious mission statement: To create sustainable value by successfully empowering

and educating the local community and students with the necessary financial end

entrepreneurial skills needed to improve their standard of living and inspire them to take on

real life opportunities (sifesalford.org, 2009). The organization is working currently on five

projects and receives many applications from local associations; community centres and

groups to help on the projects. Due to lack of tools that help with making choice which

projects should be done and will benefit the organization and community, the SIFE Salford

takes projects randomly and denies those that could be more beneficial (SIFE Salford

President, 2009).

Therefore, a system and method for prioritizing and choosing the project into projects

portfolio needs to be implemented.

The research needs to be undertaken to find out the most important and crucial criteria

used in assessing the projects. This will be made by surveying the experts in the field of

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project management and social enterprises. Further, they will participate in interviews to

assess three example projects based on the created project description according to five top

criteria (derived in the survey) whether they should be accepted to the project portfolio.

This will explain the procedures and process the SIFE Salford need to undertake in the future

when creating its portfolio. The Experts will use the AHP method implemented and

administrated through use of Expert Choice software to assess the example projects.

The issue is whether the introduction of Multi-Decision Criteria system will benefit the

organization and ease the process making it more efficient. At the same time, allowing

members to work on the projects that are relevant to the organization objectives. On the

other hand, experts will be able to choose within the projects by looking only at the

descriptions provided by submitting organization. Those two methods will be assessed by

experts who will make their judgments during interviews.

Issues and problems will be researched in the light of relevant literature. Further the field

research will be performed in order to find the most suitable solution for the studied social

enterprise.

2. Research objectives

The analysis of the projects criteria to outline the most important and adequate for

the process of selection into project portfolio

Analysis of the prioritization and selection methods of projects in project portfolio

management

Research the usefulness and appropriateness of the analysed methods in selecting

and prioritizing projects in project portfolio management

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Implementation of the Multi-Criteria Decision method – Analytical Hierarchy

Process (AHP) in social enterprise, on the case of SIFE Salford for a project portfolio

management

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II. Chapter: Literature review

The main area of study concerns Project Portfolio Management (PPM) and the literature

review will be performed to outline the main concepts in this area.

1. Project

Firstly, the understanding of the project is very important. Wysocki (2003) defines: A project

is a sequence of unique, complex, and connected activities having one goal or purpose that

must be completed by a specific time, within budget, and according to specification. On the

other hand the Project Management Institute states (PMBOK, 2004) that a project is a

temporary endeavour undertaken to create a unique product, service, or result. While

according to PRINCE2 (2002) project is a management environment that is created for the

purpose of delivering one or more business products according to a specified Business Case.

Those main definitions presented by leading organizations in project management agree

that project should have a purpose and is limited by time, budget, resources and

specifications.

2. Project Portfolio

Consequently, the project portfolio can be defined. Before that, it is important to clarify

what kind of projects should be taken into consideration when creating the project

portfolio. Wysocki (2003) deliberates whether simple task to one person could be a complex

project for others. For example buying the laptop, for those who does not have computer

knowledge it will be difficult task and becomes a project. Therefore, it is important that

organization distinguish operational tasks from projects (McGary, 2003). Once that is set,

the simple definition can be introduced stating that a project portfolio is a collection of

projects that share some common link to one another. The statement of common link means

for example that all the projects aim to help local community develop or aim to develop

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new product. On the other hand, Miguel (2008) findings about project portfolio state that

the concept evaluated from project selection (Baker, 1974) to prioritization of product

development (Cooper et al., 2000) and to the current understanding as multiple project

management (Dooley et al. 2005). Additionally Cooper (1997) argues that in project

portfolio the new project can be introduced, while existing can be withdrawn, cancelled or

suspended. This statement shows that project portfolio is not set for a given period of time,

but changes constantly, adjusting to the current situation and objectives of the company,

representing great flexibility if properly managed.

2.1. Project Portfolio Management

This statement leads to another concept, which is project portfolio management. According

to Bridges (2003) there is an art of project portfolio management (PPM), which involves

scrutinizing each potential project, selecting the right mix of projects, and adjusting as time

passes and circumstances unfold. Additionally Cooper (1997) argues that portfolio

management is a process in which projects for the development of products or services are

continually evaluated, selected and prioritized; new projects may be introduced and existing

projects might be suspended, cancelled, or de-prioritized. Hunt (2008) adds that project

portfolio management is a decision process that oversees the resource allocation and

ongoing decisions related to a strategically oriented portfolio of projects. In overall, the most

definition that collects the best parts of mentioned definitions and thoughts on project

portfolio has been developed by Wysocki and McGary (2003) and states that Project

portfolio management includes establishing the investment strategy of the portfolio,

determining what types of projects can be incorporated in the portfolio, evaluating and

prioritizing proposed projects, constructing a balanced portfolio that will achieve the

investment objectives, monitoring the performance of the portfolio, and adjusting the

contents of the portfolio in order to achieve the desired results. Consequently, when

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speaking about project portfolio in further stages of this study the reference to this final

definition will be made.

The decisions made regarding project portfolio must take into consideration the strategic

approach, as well as operational. This means that project that does not correspond to the

mission and objectives of the organization should not be included in portfolio. According to

Miguel (2008) if the projects do not correspond with the business strategy and capabilities,

there is a risk that projects will be delivered with poor quality. On the other hand, there

might be increase of resources to focus on the project that is not consistent with others,

resulting in decreasing the quality of remaining projects. Hence, according to Cooper (1997)

the project portfolio management should lead to acquisition of only those projects, which

will maximize the value, balance and strategic position of the company.

2.2. Balanced Portfolio

Cooper (1997) declared that organization should aim to maximize the balance of the

projects within the portfolio, as it will help to manage them effectively. Miguel (2008)

agrees stating that balanced portfolio in place should be a strategic objective as it is

important to have different types of the projects.

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Graph 2. Bubble diagram of a portfolio of new-product projects (Source: Cooper et al.

1997, p.24)

The above graph introduced by Cooper (1997) shows projects within the portfolio in any

company. There are projects that guarantee high rewards with high probability of success,

at the same time there are more risky projects. This is the great example of balanced

portfolio, where there are certain projects that guarantee success, and those can back up

those more risky.

McGary (2003) argues that it is neither an easy task to build the balanced project portfolio

nor there is a successful approach. Kendall (2003) argues that there must be correct mix of

projects balancing the supply side of organization with its market side. Such balance ensures

that company does not have any decline in revenues. Additionally, Bridges (2003) believes

that if portfolio is balanced effectively, this will ensure optimum use of resources and

people.

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Consequently, it is important to create the project portfolio that is balanced. Also, the

projects undertaken should follow the strategy and objectives of the organization, exploiting

its resources efficiently and effectively.

2.3. Operating a Project Portfolio

The project portfolio does not exist when an organization has few projects and manages

them at the same time. There is a procedure, sequence when building project portfolio.

McGary (2003) is convincing that there are five phases of project portfolio management.

Those include (1) Establishment, (2) Evaluation, (3) Prioritization, (4) Selection, (5)

Management. At the same time Bridges (2003) says about three steps (1) Focus, Strategic

Planning (2) Selection, Portfolio Management, (3) Management, Project Management. This

is illustrated on the following graph.

Graph 3. Project Portfolio Management (Source: Bridges, 2003)

Rad and Levin (2006) also agree that PPM goes through stages of development, which

according to them are as follows: (1) identification of enterprise opportunities, (2) selection

of projects to fulfil those opportunities, (3) planning and executing those projects, (4)

continually assessing the benefits of these projects to the organizational success.

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The most detailed approach regarding development of project portfolio has been evaluated

by Wysocki and McGary (2003). Therefore, their five phases will be evaluated in more detail,

compromising opinions of other authors regarding relevant steps.

2.3.1. Establishing Portfolio Strategy

According to Wysocki (2003) the first step of building project portfolio is establishing its

strategy. Bridges (2003) adds that it is essential the portfolio’s strategy is aligned with the

organization mission and objectives. On the other hand Rad and Levin (2006) that

opportunities for the company should be firstly evaluated, before deciding on the strategy.

Wysocki (2003) agrees with those statements, stating that project proposals are investment

opportunities that should be evaluated and categorized before they are acquired into

portfolio. According to McGary (2003) there are several models that can be adapted to help

managers in this task, which include:

Strategic Alignment Model

Boston Consulting Group Products/Services Matrix

Project Distribution Matrix

Growth versus Survival Model

Project Investment Categories

2.3.2. Evaluating Project Alignment to the Portfolio Strategy

This stage, according to Wysocki (2003) should focus on defining whether the proposed

project is in the alignment of portfolio strategy and to which category it belongs. This is

made through one of the models chosen from the list from previous section. Rajagopal

(2007) argues that the company should fund only those projects, which mostly align with

company’s strategic objectives. Blichfeldt (2007) adds that the projects should be screened

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against created criteria and classified appropriately. Once the projects are categorized the

next phase can begin (McGary, 2003).

2.3.3. Prioritizing and selecting Projects

Wysocki (2003) states that the first tactical step in every portfolio management model

involves prioritizing the projects that have been shown to be aligned with the portfolio

strategy. Rajagopal (2007) follows with statement that business attaches valuation criteria

to rank projects in terms of their importance. There are many approaches to prioritize

projects in their categories. Bridges (2003) gives examples of criteria that can be identified:

benefits to the company, costs and risks. On the other hand Wysocki and McGary (2003)

introduce models that can help to prioritize and select projects in portfolio in the simple

way, those include:

Forced Ranking

Q-Sort

Must-Haves, Should-Haves, Nice-to-Haves

Criteria Weighting

Paired Comparisons

Risk/Benefit

Multi-Criteria Decision Methods

The selection method and process will be described in the 3rd section of this chapter

in greater detail as this part is the highest interest of the research.

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2.3.4. Selecting Balanced Portfolio Using the Prioritized

Projects

The next phase aims to create a balanced portfolio of projects. According to Wysocki (2003)

it is very challenging task for the management team as it involves ranking projects from

most valuable to least valuable. Additionally, it requires choosing those that fit the strategy

and can be performed accordingly to available resources. This stage of building the project

portfolio is the most crucial, as projects acquired will be run by the organization utilizing its

resources throughout the planned period of time.

Wysocki (2003) examined about 30 different methods that could be used in selection of the

projects into portfolio. The main three outlined by him include:

Strategic Alignment Model and Weighted Criteria

Project Distribution Matrix and Forced Ranking

Graham-Englund Selection Model with the Project Investment Categories

and the Risk/Benefit Matrix

However, Bridges (2003) argues that the company should prepare the list of criteria, which

should be given importance, and then projects should be compared in pairs against them.

The most common method for this kind of project selection is Analytical Hierarchy Process

(AHP) method. Which will be a main method used in the research and evaluation. Therefore,

the detailed analysis and explanation will be performed.

2.3.5. Managing the Active Projects

Final phase of portfolio management is actual management of the projects that were

accepted. Wysocki (2003) states that in this phase, each project should be monitored to

check its performance against the plans outlined. Rajagopal (2007) adds that the portfolio

should be constantly reviewed, some businesses introduce centralized Programme

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Management Office (PMO) which gathers financial and work progress perspective updates

from project leaders. This information and reports are passed to senior staff and

stakeholders.

2.3.6. Summary of project portfolio development

According to Bridges (2003) an organization may have the best ideas and methods, but if the

process is not structured or implemented correctly, the company will have a hard time

gaining widespread acceptance of the new process. Therefore, it has to be implemented to

fit other processes and culture of the company. Accordingly, the introduction of process of

project portfolio may differ from company to company, and it’s up to management team to

choose the most suitable option.

2.4. Project life cycle

In the previous section the path of project has to go through to be accepted into the project

portfolio. It is time to have a closer look on the project life cycle on its own and then in the

portfolio itself.

PRINE2 (2002) states that a project has a life cycle, which is the path and sequence through

the various activities which produce the final product (Graph below).

Graph 4. Project Life Cycle (Source: PRINCE2, 2002)

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On the other hand, PMBOK (2004) states that the project life cycle defines the phases that

connect the beginning of a project to its end (Graph below).

Graph 5. Project Life Cycle (Source: PMBOK, 2004)

At the same time Gray (2002) shows expanded model of the project life cycle with

explanations what happens in each of the stages defined (Graph below).

Graph 6. Project Life Cycle (Source: Gray, 2002)

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In overall, those models present that project that is going through various stages. In each of

them there are different tasks performed leading to increase activity of project members.

All this models show that the project has defined starting and ending point (Gray, 2002).

However, according to Wysocki (2003) the project in portfolio has its own life cycle, which is

illustrated on the graph below.

Graph 7. Portfolio project life cycle

According to this model there are eight stages the projects go through in the process of

creating the project portfolio development which have got to be completed in order to

create the successful portfolio.

2.5. Benefits of project portfolio

There are many benefits when the organization decided to introduce project portfolio

management. Bridges (2003) states that benefits are tremendous, for example the value of

SmithKleineBeecham portfolio increased by 30 percent after introduction of presented

approach. These benefits presented by Bridges (2003), Rajagopal (2007), Rad (2006) include:

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Having a structure in place to select the right projects and immediately remove the

wrong projects;

Placing resources where they're needed and reducing wasteful spending, better

utilization of resources

Linking portfolio decisions to strategic direction and business goals; tighter

alignment with organizational objectives

Establishing logic, reasoning, and a sense of fairness to portfolio decisions;

Establishing ownership among the staff by involvement at the right levels;

Providing avenues for individuals to identify opportunities and obtain support;

Helping project teams understand the value of their contributions.

2.6. Problems

Although there are many benefits of having a project portfolio management in the

organization, there are problems that might occur. Those problems are challenges for

portfolio managers and include, according to Kendall (2003):

Too many active projects (often double what an organization should have)

Wrong projects (projects that will not provide value to the organization)

Projects not linked to strategic goals

Unbalanced portfolio [e.g. Too much on the supply side, not enough on the market

side; or Too much short term and not enough long term, etc.]

Accordingly, the research will focus on finding the best practices to avoid those problems

when implementing project portfolio and while managing it.

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3. Project Selection methods

As revealed by the President of SIFE Salford (studied organization) there is no structured

selection method of the projects which are undertaken by the organization. All the decisions

are made by the management committee based on the little information from external

organization and without specific evaluation. It is made through democratic voting without

justification of decisions.

This dissertation through the research undertaken aims to present available methods

commonly used in various industries for selecting methods. Further the assessment of the

methods and analysis by experts will reveal which of the chosen one is more accurate and

suitable for studied organization.

Two methods have been selected for the comparison and study. First one is called Criteria

Weighting (Wysocki, 2003; Heldman 2007), while second is Analytical Hierarchy Process

(Saaty, 2001). These will be now described and analysed along their application.

Importance of selection methods

According to Marzouk (2008) there is a need for structured selection of the project as it

helps to avoid common problems that occur with projects such as cost and schedule

overruns, reducing quality and safety measures, claims and litigation. Further, the

capabilities of the partners need to be examined and various criteria need to be evaluated

(Hatush and Skitmore, 1998). According to those authors common mistake is choosing a

project with biggest budget, which is just one criterion, while there should be other taken

into consideration as decisions are complex. Even though, Mahdi (2002, p.29) argues that

the selection method should be simple, normally accurate and transparent so that the

reason why the project have been chosen is clear and reasonable. Rad (2006) states that to

achieve successful project portfolio management the methodical selection of projects

approach needs to be implemented (Graph below).

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Graph 8. Process of managing portfolios successfully (Rad, 2006, p.127)

Difficulty of selecting a project

Graves (2002) outlines that manager or organization has a great difficulty in selecting a

project from a menu of opportunities. Their choice is limited by available resources, for

example capital, talent, time. Further, Graves (2002, p.1) adds that the choice has got to be

aligned with the strategy to satisfy corporate goals or objectives. Often these are multiple

making it even harder to decide without applied, structured approach for selection. Further,

Levine (2005) states that managers often know only few aspects of the projects or

organization strategy, and make their decision based only on that without taking into

consideration other criteria. Also, the situation in the organization is complex and

availability of resources varies which also commonly is not taken into consideration (Levine,

2005). This illustrates that without appropriate process of selecting a project to the project

portfolio the inappropriate project can be selected, which could lead to great difficulties.

The approach has got to be systematic and allow clear, transparent choice.

3.1. Criteria weighting method

Wysocki (2003) introduces the criteria weighting method as the one that can be used for

prioritizing and selecting projects into project portfolio. Following, he states that there are

many models built by various authors, which apply the same scheme and approach.

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Heldman (2007) outlines that a criteria weighting method lays within scoring models

section. Furthermore, these methods and models belong to category defined by Project

Management Institute (PMI) defined as benefit measurement. According to Heldman (2007)

methods in this category apply various forms of analysis and comparative approaches to

make project decisions. The other category outlined by PMI is mathematical methods, which

contains very complicated algorithms and formulas, which can be applied for very complex

projects.

Therefore, for simple project selection in the social enterprise the scoring model or criteria

weighting method can be applied more easily. Rad (2006, p.32) states that appropriately

applied scoring model consists of four components:

Categories of criteria to determine the model type

Range of values for the criteria

Measurement and description for each value within the range

Importance or weight of the criteria

Firstly, Heldman (2007) advises that commonly the project committee decides on the

criteria that will be taken into consideration and scored against. For the analysis of the case

study the survey will be performed to outline the most important criteria in social enterprise

(Methodology Chapter). Rad (2006) argues that selected criteria should be objective, that

people cannot skew the model to select pet projects (Armstrong, 2004).

There is a wide range of available criteria that can be taken into consideration when

selecting projects. Cooper (2001) outlines criteria such as strategic attractiveness,

product/competitive advantage, market attractiveness, synergies in terms of leveraging core

competences, technical feasibility and risk versus return. Martino (2003) adds costs, payoff,

market share, probability of success, the availability of resources, degree of competition,

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constraints. Cleland (2003) focuses on criteria such as risk, profit margin and duration. For

the purpose of the research the criteria have been chosen to fit the case of social enterprise

(Methodology chapter).

In the next step of the method, according to Wysocki (2003) experts should agree on the

weight of each criterion scoring them from 1 – 10 or 1 – 5. Heldman (2007) follows stating

that highest score represent higher importance than lower scored criteria. According to Rad

(2006) such assessment will show which criteria can be scored objectively and which will

require some more judgments to be made. Martino (2003, p.32) argues that if one or more

criteria are compromised of sub-criteria that are combined to obtain the value for a factor,

any combination must be done outside of the specific model.

Once the criteria are weighted, the experts can score a project against agreed criteria using

the same scale an approach as step before.

An example of such scoring is presented in the table below.

Criteria Weight Project

A Score

Project

A Totals

Project

B Score

Project

B Totals

Project

C Score

Project

C Totals

Profit potential 5 5 25 5 25 3 15

Marketability 3 4 12 3 9 4 12

Ease to

produce/support

1 4 4 3 3 2 2

Weighted score 41 37 29

Table 1. Scoring method (own study based on Heldman, 2007, p.64)

In the example from Heldman (2007) it can be seen that project A is an obvious score due to

highest score.

23

According to Cooper (2001) the scores given by projects become a proxy for the value of the

project. However, it includes strategic, leverage, and other considerations rather than solely

financial measures (Rad, 2006, p.33). Consequently, Meredith (2006) suggests use of scoring

models as they include multiple objectives and criteria, which is crucial in decision making

process. However, Meredith (2006) would add constraints to the model to reflect the real

situation of the project.

In summary, the criteria weighting method is commonly used by many researchers and

authors. Models have different variances according to the specific case or application.

Nevertheless, they are based on the same decision process, which is widely applied in the

industry.

Limitations

Rad (2006, p.33) states that although scoring models are easy to use, they are not precise.

Therefore, the results should be only treated as guidelines bearing in mind that people

should make decisions not models. Meredith (2006) adds that experts are forced to make

difficult decisions based on limited information and analysis. Further, the U.S. Government

Office (GAO) argues about the importance of defining the scoring elements. Each score

should have description of what it actually represents. Experts often face only numbers on

the scale without understanding of the meaning, such exercise are meaningless. Therefore,

the correct approach should be implemented allowing experts to understand purpose and

meaning of the method. Warrall (2000) states that there might occur difficulties with

expressing the judgments based only on numerical scale or if decisions and scoring are

made during discussion. In such situation the experts might be afraid to express their actual

judgments due to certain circumstances (i.e. presence of senior management). Therefore, it

is important to build functional atmosphere for applying the method.

24

3.2. Analytical Hierarchy Process method

Multi-criteria decision making

According to Al-Harbi (1999, p.19) project, portfolio and organization managers are faced

with complex decisions in intricate environments. The elements of the problems are

numerous, and the inter-relationships among the elements are extremely complicated. The

decisions need to be made, taking into consideration all the factors, influences and

constraints. Schuyler (1999) argues that many managers are lacking skills that allow sound

decisions, therefore there is a need to implement the decision making approach.

Triantaphyllou (2000) states that the way people make decisions (prescriptive theories) or

the way people ought to make decisions (normative theories) has been a subject to many

research papers for years. Consequently, many methods and theories have been developed

over years. One of the major branches in decision making is Multi-Criteria Decision Making

(MCDM). According to Triantaphyllou (2000, p.1) MCDM concentrate on problems with

discrete decision spaces, which means that the set of decisions alternatives has been

predetermined. Although, there are many MCDM methods, they have certain aspects in

common which are explained below:

Alternatives – different choices of action available to decision maker, which should

be screened, prioritized or/and ranked

Multiple attributes – attributes represent the different dimensions from which

alternatives can be viewed. In complex projects or decisions, the attributes and

criteria can be structured in hierarchical manner, showing the importance, value

against each other.

Conflict among criteria - i.e. profit and cost

Incommensurable units – when criteria are expressed by different units of

measurement but still have to be compared

25

Decision Weights – the criteria are given weights representing their importance

Decision Matrix – each problem analysed by MCDM can be illustrated on the matrix

showing criteria, weights and alternatives

According to Al-Harbi (1999) and other authors, the aim of MCDM methods is to help

decision-makers learn about the problems they face, to learn about their own and other

parties' personal value systems, to learn about organizational values and objectives, and

through exploring these in the context of the problem to guide them in identifying a

preferred course of action. According to Hwang and Yoon (1981) research on MCDM

methods, which have application in project management revealed that they are mostly used

for evaluation of problems and design of problems. Therefore, the analyzed case study in

this dissertation has a problem of choosing the appropriate selection method for the

studied social enterprise.

Application

Among number of MCDM methods available the Analytic Hierarchy Process (AHP) method

has been chosen by the author. According to Al-Harbi (1999), Harker and Vargas (1987),

Perez (1995) the method is viable and widely used by governmental agencies, corporations

and consulting firms. Moreover, there are a lot of applications for this method across

industries showing that method is popular and works, efficiently allowing making sound

decisions. Below there is a list of authors who used AHP method for their own research

studies and cases, which show a great variety of applications.

Authors (Year of publication) Application of AHP method

Wu, W., Lee, Y. (2007) Selecting knowledge management strategies

Mahdi, I.M., Riley, M. J., Fereif, S.M., Alex,

P.A. (2002)

Contractor selection

26

Marzouk, M. (2008) Contractor selection

Hatush, Z. and Skitmore, M. (1998) Contractor selection

Mota, C. M. M., Almeida, A. T., Alencar, L. H.

(2009)

Assigning priorities to activities in project

management

Milis, K., Mercken, R. (2004) The evaluation of Information and

Communication Technology projects

Lin, M., Wang, C., Chen, M., Chang, C. A.

(2008)

Customer-driven product design process

Lee, A. H. I., Chen, W., Chang, C. (2008) Evaluation of performance of IT department

in the manufacturing industry in Taiwan

Huang, Y., Bian, L. (2009) Personalized recommendations for tourist

attractions over Internet

Ertugrul, I., Karakasoglu, N. (2009) Performance evaluation of Turkish cement

firms

Chin, K., Xu, D., Yang, J., Lam, J.P. (2008) Product project screening

Cheng, S., Chen, M., Chang, H., Chou, T.

(2007)

Semantic-based facial expression recognition

Celik, M., Er, I. D., Ozok, A. F. (2009) Shipping registry selection: The case of

Turkish maritime industry

Carlucci, D., Schiuma, G. (2007) Knowledge assets value creation map,

Assessing knowledge assets value drivers

The above table shows that the AHP method is widely used in various industries, therefore

the author decided to illustrate application of it to the studied social enterprise.

27

The Analytic Hierarchy Process

The method s has been developed by Saaty (1980; 1994; 2001), therefore it is essential to

understand the process of the author. Consequently, there are three principles of analytic

thought that underlie the AHP which are: constructing hierarchies, establishing priorities

and logical consistency.

Structuring (Construction) hierarchies. Saaty (2001) states that human mind structures

complex reality into parts, which consist of parts and so on building a hierarchy. Breaking a

problem or a case down to detailed structures allows getting a more complete picture. In

some cases it can have up to nine levels if the problem is complex or decision very

important.

Setting priorities. According to Saaty (2001, p.17) humans have the ability to perceive

relationships among the things they observe, to compare pairs of similar things against

certain criteria and to discriminate between both members of a pair by judging the intensity

of their preference for one over the other. Consequently, Saaty (2001) argues that judgments

can be synthesized through imagination or with AHP, the new logical process, which allows

gaining understanding of the whole system.

Logical consistency. Final principle of AHP method comes from Saaty’s research (2001)

revealing that humans the ability to establish relationships among objects or ideas in such a

way that they are coherent. This means that judgments relate to each other exhibiting

consistency, which means two things. Firstly, the ideas or objects are grouped according to

homogeneity and relevance. Secondly, the intensities of relations among ideas or objects

based on a particular criterion justify each other in some logical way.

28

Principles in AHP Process

Saaty’s AHP method (2001) utilizes these principles in AHP process incorporating both the

qualitative and the quantitative aspects of human thought: the qualitative to define the

problem and it hierarchy and the quantitative to express judgements and preferences

concisely. The AHP process integrates those two approaches which allow making sound

decisions.

AHP Steps

Al-Harbi (1999) summarized steps of Saaty’s AHP method:

29

The Analytic Hierarchy Process is a complicated mathematical method, which helps a lot

with decision making. However, if there was no software that allows user-friendly

application of it, very few people would use it. The Expert Choice software has been

designed, which hides the complicated mathematical calculations and algorithms under

user-friendly screens which allow fast decision making and analysis of the results

(ExpertChoice.Com, 2009). The process will be explained in detail in methodology chapter.

30

Advantages of AHP

Graph 9. Advantages of the Analytic Hierarchy Process (own study based on Saaty, 2001, p.25)

AHP

Unity: The AHP provides a single, easily understood, flexible model for a wide range of unstructured

problems Complexity: The AHP integrates deductive

and systems approaches in solving complex

problems

Interdependence: The AHP can deal with the

interdependence of elements in a system and does not insist on

linear thinking

Measurement: The AHP provides a scale for

measuring intangibles and a method for

establishing priorities

Consistency: The AHP tracks the logical

consistency of judgments used in

determining priorities

Synthesis: The AHP leads to an overall

estimate of the desirability of each

alternative

Tradeoffs: The AHP takes into consideration the

relative priorities of factors in a system and enables people to select the best alternative based on their

goals

Judgment and consensus: The AHP does nor insist on

consensus but synthesizes a representative outcome from diverse judgement

Process Repetition: The AHP enables people to refine

their definition of a problem and to improve their

judgment and understanding through repetition

31

Other authors also recognize other advantages of AHP method. Al-Harbi (199) states that AHP allows

consideration of multi-criteria as well as group decision-making. Also, other authors who found

application of AHP very useful (table above) appraise the use of software for this method.

Critique of AHP

Although the AHP method has many applications in various industries and is widely used there are

still some critiques of it. Watson and Freeling (1987) argued that in order to elicit the weights of the

criteria by means of a ratio scale, the method asks decision-makers meaningless questions, for

example: `Which of these two criteria is more important for the goal? By how much?' According to

authors it is not constructive. Moreover, Belton and Gear (1983) and Dyer (1999) pointed out that

this method can suffer from rank reversal (an alternative chosen as the best over a set of X, is not

chosen when some alternative, perhaps an unimportant one, is excluded from X). Further, Cheng et

al. (2007) stated that AHP is rigid and inflexible making it hard to use in fast moving projects.

Further, Barzilai (1998) examined the AHP method and concluded through various case studies that

shows that application of AHP leads to wrong results.

These criticisms have been tackled by various authors, who analysed the problems and presented

answers. The most accurate response had been presented by Whitaker (2007) who examined the

cases brought up by mentioned authors. From her research it came obvious that critiques have not

applied AHP method appropriately and missed fundamental steps in AHP process such as

establishing priorities for criteria. Consequently, Whitaker (2007) defended the AHP method by

revealing wrong approaches taken by the critiques.

Ethical Considerations

Saaty (2001, p.11) argues that because of complexity of decision making process, the expert

responsible for judgments regarding social issues should have following characteristics to be able to

make ethical decisions:

32

Truthfulness by not oversimplifying complexity

Justice by evaluating costs and benefits and assigning costs to those who get the benefits

Ability to plan for the unknown by calculating changes, determining where they are likely to

occur, and deciding which priorities should dictate action

Flexibility in adapting to change by planning, implementing, and, in response to new

conditions, re-planning and re-implementing.

Summary of AHP

According to Forman (2001, p.43) the AHP developed at the Wharton School of Business by Thomas

Saaty, allows decision makers to model a complex problem in a hierarchical structure showing the

relationships of the goal, objectives (criteria), sub-objectives and alternatives. Bhuschan (2004)

outlines important aspect of AHP, which allows group decisions through brainstorming, meetings or

open discussions. The Expert Choice software based on the methods allows assessments by

individual experts which then can be combined to produce overall result. The AHP has found many

applications, because it makes experts compare criteria and alternatives in pairs, which allows them

to oversee the problem and understand the structure and reasoning of the studied situation.

33

III. Chapter: Methodology

As an academic activity, the research should be conducted in a systematic, organised and planned

manner (Kothari, 2005). Therefore, this chapter introduces the methodology of the author’s research

and aims to present its methods and procedures.

Firstly the reasoning of the research will be discussed. According to Crotty (1999) every research

consists of four elements as shown on the graph below.

Graph 10. Four elements of research (Crotty, 1998, p.4)

Each of these elements has been described by Crotty (1998, p.2):

Epistemology: the theory of knowledge embedded in the theoretical perspective and

thereby in the methodology

Theoretical perspective: the philosophical stance informing the methodology and thus

providing a context for the process and grounding its logic criteria

Methodology: the strategy, plan of action, process or design lying behing the choice and use

of particulat methods and linking the choice and use of methods to the desired outcomes

34

Methods: the techniques or procedures used to gather and analyse data related to some

research question or hypothesis

Kumar (2005) states that research is the way of thinking, critically examining the various options and

aspects of world from perspective of i.e. customer, professional, institutions or businesses.

Accordingly, the research is one of the ways to finding answer to the questions (Kumar, 2005, p.6).

Kumar (2005, p.6) argues that the researcher philosophical orientation may steem from one of the

several paradigms and approaches in research – positivist, interpretive, phenomenolist, action or

participatory, feminist, qualitative, quantiatative – and the academic disciplin in which researcher

have been trained.

Nevertheless, authors (Kumar, 2005, Crotty, 1998, Malhotra, 2007) agree that the research should be

valid, reliable and unbiased. The first concept assures that correct procedures and approaches have

been chosen and applied in research. Reliability ensures the quality of research methods, data

collection and analysis which will provide accurate results. Finally, unbiased refers to objective

approach of researcher who will not introduce personal statements and influences at any of the

stage of research and remind unbiased. Kumar (2005) states that fulfilling these three criteria allows

to call the process a research.

Types of research

Kumar (2005) and other authors identify types of research as presented on the graph below:

35

Graph 11. Types of research (Source: Kumar, 2005, p.9)

The three classifications are not mutually exclusive (Kumar, 2005, p.8). Application approach aims to

examine the methods, techniques or procedures that can be further applied in real life situations to

improve existing systems or to introduce new solutions. As it is the aim of this research, where

project selection methods are studied and researched to be later introduced to the social enterprise

for further implementation.

Furthermore, the objective approach aims to describe a situation or problem (descriptive research),

to discover relationship/association between two or more aspects of situation (correlation research),

to clarify why and how there is a relation between aspects of situation (explanatory research), to

explore the area of study whether it is worth researching (exploratory research) (Kumar, 2005).

Finally, inquiry mode approach considers processes which will be undertaken to find answers to the

questions. Accordingly, there are two aspects: the structured and unstructured. First is connected

with qualitative research, where everything (scope, objectives, structures) are predefined, which

allows to analyse the extent of the problem. On the other hand, unstructured approach is classified

36

as a qualitative research, which allows greater flexibility than quantitative. Therefore it is mostly used

to investigate the nature of the problem (Kumar, 2005).

In summary, the research is a complex task that has to have the reason behind to undertake it.

Further it has to be examined whether someone before carried out similar research. Then the

advantages of such process should be outlined whether they will be theoretical or practical and who

will benefit from this. Finally, once the research has been approved to be undertaken the research

methodology and methods has got to be examined and decided for the given case.

This leads to analysis of secondary and primary research.

1. Secondary research

The secondary data, gathered in previous researches for some other purposes, has numerous of uses

in the author’s research, including: helping to answer the research questions, getting the background

and understanding of the overall problem situation (Wrenn, et al, 2006). Two different sources of the

secondary data can be highlighted here: internal and external sources. While the first one can be

found within the organization for which the research is provided (social enterprise – SIFE Salford),

the external data is more difficult to obtain and has forms, such as online material, databases, etc.

(Malhotra, 2007).

37

Graph 12. A classification of secondary data (own study based on Malhotra, 2007, p.100)

The collection and analysis of secondary data can help to define research problem and develop an

approach to solve it (Malhotra, 2007). Secondary data can help with diagnosis of the research

problem, development of an approach to solve it as well as to create sampling plan. Further, it helps

with answering certain questions and testing hypotheses. Finally, it allows to validation of research

findings, through comparison with results of other authors (Malhotra, 2007, p.96).

However, secondary data has some disadvantages. Firstly, data was collected for other purposes

than research undertaken. Therefore, they might be irrelevant or inaccurate for the studied case.

Following, the data analysed may not be current or reliable (Malhotra, 2007, p.96). Therefore,

Malhotra (2007) advises to evaluate secondary data before discussing it.

2. Primary research

As the search for the research answers may also go beyond the study of the existing secondary data,

it is vital for the researcher to address the research problem personally. The primary research

Secondary data

internal

Ready to use Requires further

processing

external

Published materials

Computerised databases

Syndicated services

38

approach needs to be implemented in such case and it requires the researcher to justify his or her

reasons for choosing a particular method of data collecting (Wrenn, et al, 2006).

Therefore, after analysing the possible types and methods of conducting the study, the researcher

finds it applicable to utilise the qualitative research. This type is concerned with the qualitative

phenomena and aims to explore it. On the other hand, quantitative research typically seeks to

measure the quantity or a certain amount of the phenomena (Kothari, 2005).

As the qualitative research takes place in the natural setting, in order to ensure comfortable situation

for the participants taking part in it (Creswell, 2003), the researcher aims to create such settings, as

well as the use of various interactive methods is planned to be used. The purpose of that is to build

credibility of the participants and encourage them to actively take part in the research (Creswell,

2003).

The researcher’s primary aim, while conducting qualitative research, is to understand the underlying

motivations and processes, as well as objectives of the study (Malhotra and Birks, 2007).

Primary research plan and strategy

To address the research objectives and produce the results that can be analysed for further

recommendations, the research undertaken needs to have a structure and plan.

In the first stage the survey will be commenced to identify key criteria for project selection. Then

results from the survey, top 5 criteria chosen by surveyed people will be used to form the

questionnaire.

In the second stage research participants will be interviewed. They will be asked to choose one

project that should be implemented by the studied organization. This decision will be made solely by

comparing project description (prepared to the 5 criteria derived from survey). The participants will

be asked to justify their decision and answer supportive questions

39

In the third stage experts will be asked to assess and choose the projects once again, but using Expert

Choice software this time.

The results from the research will be further analysed in the next chapter. Below, the detailed

presentation of each method and approach will be discussed.

Stage 1: Survey

Objective

The first stage of the research addresses the first objective of the dissertation, which asks to outline

the most important and adequate criteria for the process of project selection into project portfolio.

The most suitable research method to achieve this has been the survey due to rapid turnaround of

data collection and economy of design (Creswell, 2003, p.154).

According to Creswell (2003, p.153) a survey provides a quantitative or numeric description of trends,

attitudes, or opinions of a population by studying the sample of that population. Fowler (2002, p.2)

follows that by stating that research aim is to gain subjective feelings of the public regarding the

asked issue.

Target audience – Sample

Creswell (2006) states any survey has got to have target group which will participate in research.

They have to be chosen accordingly to their knowledge and expertise about the researched topic. For

the purpose of this questionnaire four target groups has been identified, which are as follows:

Project Managers, Volunteering & Community Organizations Managers, Management Committee of

SIFE Salford (student society which case is being studied), experienced employees who work on

projects. From each of these groups three people had been asked to fill in the survey, which led to

collecting twelve responses.

40

Design of the survey

The objective of the survey was to identify the most important criteria for project selection. To

create the list of criteria from which the surveyed could choose from, the primary research has been

performed. Levine (2007), Gray and Larson (2002), Westerveld (2003), Stewart and Mohamed (2002),

Visitacion (2006) have identified criteria in their research and those suitable to the case study (social

enterprise) has been chosen.

Data collection

People surveyed have been asked to chose five criteria from the list and rank them according to their

significance from the most to least important. Each of the answer has different value as presented in

a table below. This will allow creating a ranking of criteria based on the average score. The top five

criteria will be chosen for the next stage of research.

Significance Value

the most important 5

Second important 4

Third important 3

Fourth important 2

The least important 1

Table 2. Explanation of rating answers

The survey has been designed using an online survey tool from SurveyMonkey.com Company. It is

free and very advanced tool for research methods. The designed survey (Appendix 1) has been sent

by email to 12 chosen participants (Appendix 1). Further they answered one question by ranking five

criteria of their choice. The data was collected in the system which helps to analyse it further in the

next chapter.

41

Limitations

Saunders (2007, p.531) states that any research has its limitations such as the size of the sample and

the snapshot nature of the research. Further, criteria identified by authors such as Levine (2007) led

to creating the list; however there might be other criteria which have not been identified.

Additionally, Bickman (1997) and Saunders (2007) state that the language and wording of research

questions and answers has got to be understandable for surveyed people. Because they may

represent different industries there is a risk of misunderstanding o use of different definitions.

Stage 2: Interview

The interview can be described as a conversation conducted in a planned and unstructured manner

that is conducted by the researcher who possesses an underlying purpose (Gillham, 2000). During

the research a series of questions from the researcher to the participant (interviewee) is asked with

the aim for the researcher to listen, analyse and then interpret the material gathered from the

answers (Malhotra and Birks, 2007).

Conducting an interview is one of the most common methods used in qualitative research, mainly

due to its characteristic of being a flexible, open and direct of collecting the primary data. Through

the way of unstructured conversation the researcher can also collect more additional, background

information that will help him or her to understand the ‘broader picture’ of the research problem.

Malhotra and Birks (2007) summarize that by saying that “in-depth interviewing seeks ‘deep’

information and understanding”.

Objective

The aim of the interview is to gain understanding of decision making process, reasons behind it when

selecting project into project portfolio. Additionally, interview aims to research the usefulness and

appropriateness of the presented method in opinion of different target groups. The opinions

regarding the method will be gathered for further analysis and comparison.

42

Design of interview

Participants will be shown the first method of assessing the projects by comparing project

descriptions (Appendix 2) of three anonymous projects from various organizations. Based on them

experts will be asked to choose one project that should be accepted to the project portfolio.

Further, they will be asked to justify their choice and answer additional questions that will support

their answer and discussion if necessary (Appendix 3). Because they will be assessing projects to be

implemented by the studied organization - SIFE Salford, the will be given short description about this

particular social enterprises, its capabilities and general idea behind (Appendix 4).


The representatives from four identified groups: Project Managers, Volunteering & Community

Organizations Managers, Management Committee of SIFE Salford, experienced employees, who

work on projects, will be asked to participate in one-on-one interviews. The expertise and knowledge

of the interviewed people, along with their different perspectives on the studied issue will reveal

interesting results and findings, which will lead to recommendations for studied organization.

Data collection

The researcher will provided project descriptions for the interviewed person with a field for

comments. There will be time provided for analysis of the data presented and then the interview will

be performed with support of the questions prepared to lead the discussion.

Limitations

Understandably, a number of constraints may occur during the research, with the major one related

to the time scale of the study that is expected to be planned, designed, conducted and analysed in

only few months only by the researcher himself. Additionally, the researcher, not being a

professional in the field of research, may experience this as a difficulty. Limitations connected with

the interview method include, i.e.: the lack of sufficient responses, participants’ aversion, and

difficulty of the questions asked.

43

Stage 3: Expert Choice assessment

Objective

The aim of this assessment is to show alternative method for selecting the project, which widely used

in the various industries across the globe, the Analytical Hierarchy Process (AHP) method.

It has been discussed in the literature review and its applications were outlined. It is very complex

mathematical method, therefore to make it more accessible the Expert Choice software has been

used to allow simple on-screen decisions, while the program calculates everything on its own. For the

purpose of the research the Expert Choice 2nd Education Edition will be used, the Expert Choice Inc

allows discussion over terms and conditions of use of their software and could allow free use for

social enterprise.

Secondly the experts will be able to assess the method and compare it with the previous one

outlined in the stage 2 of the research. The aim is to get opinion from the experts about usefulness

and appropriateness of the methods for the social enterprise, and which of the methods can be more

beneficial for the studied organization.

Design of the assessment

The special file in the Expert Choice software has been designed to address the research (Attached

DVD). The objective of the assessment by the experts is to choose one project that should be

accepted to the project portfolio by the SIFE Salford. Experts will be given same project descriptions

as in the stage 2; however they will make decisions and comparisons according to the instructions on

the screen.

Overview of the software

Expert Choice 2nd Education Edition is a robust, desktop-based application that enables teams to

prioritize objectives and evaluate alternatives and achieve alignment, buy-in, and confidence around

important organizational decisions (ExpertChoice.com). Forman (2001) states that introduction of

44

the PC implementation, Expert Choice allowed growth of AHP applications around the world across

industries.

Wyatt (1999, p.137) analysed Expert Choice software and stated that it focuses on alternatives

evaluation. It helps policymakers choose, by converting their comparative ratings for alternative

policies into ratio scale scores. The strength of the software is the ability to warn experts about their

inconsistency in ratings.

Table 3. Categories of problems that have been addressed by Expert Choice (Source: Wyatt, 1999,

p.137)

The table above shows the categories which can be addressed by studied software. The case of the

dissertation research lies within first category regarding the investment and strategies. The studied

society needs to select the project to their portfolio that will suit their capabilities and requirements.

The software had been designed by Thomas Saaty, a mathematician who worked in the Wharton

Business School at the University of Pennsylvania and later at the University of Pittsburgh (Wyatt,

1999, p.137). He is the author of Analytic Hierarchy Process (AHP) approach, which utilizes complex

analysis of users’ preferences matrices and underpins the Expert Choice package (Forman, 2001 and

Wyatt, 1999).

45

Expert choice assessment step by step

Step 1: Set up of the assessment file

Graph 13. Expert Choice main screen

The main screen of the Expert Choice gives an overview of all the options available. Firstly, there is a

need to clarify the goal of the assessment.

Goal: Selection of the project to the project portfolio for SIFE Salford

Further, the identification of criteria chosen (which have been derived through the survey):

Financial stability (of an external organization)

Payback (time needed to recover the investment)

Social Return on Investment (Value in Pounds)

Risk Analysis (number of risks & their probability/impact)

Budget (the size of the total project budget)

Step 2: Criteria assessment

Experts will be asked to compare criteria in pairs and choose the importance of the criteria to them.

46

Graph 14. Expert Choice criteria analysis

The assessment of those criteria will give them a rate that will be used further by the software to

calculate next decisions.

Step 3: Projects assessment

The final step undertaken by the expert is assessment of the projects regarding each of the five

criteria, one by one. Projects are compared in pairs regarding each of the criteria by turns.

Graph 15. Expert Choice project assessment screen

Using software

Basically, the interface of the software is user friendly. The expert can make decision in three ways.

47

First option is on the scale from 1 to 9, where 1 shows that criteria or options are equal and higher

marks illustrate advantages.

Graph 16. Expert Choice decision screen 1

Second option allows expert to choose options expressed in words: Equal, Moderate, Strong, Very

Strong, and Extreme.


Third option is very graphical, where expert can decide advantage of criteria or option through the

illustration by clicking on red or blue strip, which will result in changing colours on the right hand side

circle.

48


The expert may choose which method of assessment is more suitable for him or her. It does not

affect the final score as the software calculates the graphic illustrations and words expressions to

numbers and uses complicated mathematical algorithms to produce final score.

Step 4: Analysis of the results

Once all the experts make the assessment the software calculates the ratings and scores into results

which can be analysed through various graphs and options, which will be presented in findings

chapter.


The representatives from four identified groups: Project Managers, Volunteering & Community

Organizations Managers, Management Committee of SIFE Salford, experienced employees, who

work on projects, will be asked to participate in Expert Choice assessment. They will be assisted by

the researcher, who will explain how to operate the software and what applications it has. The

people who take part in this stage of the assessment will be the same who have been interviewed;

therefore they will be able to leave their comments regarding the comparison of the selection

methods they got familiar with.

49

Data collection

Experts will be shown how the software works and then on the computer with the licensed software

will assess the projects. Their decisions will be recorded in the software in the specially designed file.

Further their opinions and comments will be recorded by the researcher on dedicated sheet.

Limitations

Forman (2001) outlines the limitations of the Analytical Hierarchy Process and use of Expert Choice

software. First of them is that humans make relative rather than absolute judgements. Secondly, the

judgments are not very accurate whether the expert will use 1-9 scoring scale or worded scale.

Thirdly, experts can be inconsistent in their judgments. However, expert choice reveals the

inconsistency ratio for each expert and set of judgments. The reasons for inconsistency can be

various from lack of information, concentration to inadequate model structure. Nevertheless,

Forman (2001) argues that it is more important to be accurate than consistent, mainly because the

real world is not consistent and this will appear in expert judgements.

3. Ethical issues

Thyer (2001) outlines that in any research there are ethical issues, which needs to be taken into

consideration. Levine (Reamer, 2001) states that research participation should be voluntary and

informed. Also the data gathered should be protected and published fully to avoid any forgery. Thyer

(2001) adds that at the initial stages, when questions are being prepared the must be constructed in

the manner that does not offend anyone.

The ethical issues will be taken into consideration by researched when constructing the questions

and further analysis of data gathered. The researcher is ethically obliged to ensure the relevance and

usefulness of secondary data to the problem at hand (Malhotra, 2007, p.117).

50

Summary

The research aims to address the objectives and gather data that will allow further analysis, which

will result in recommendations for the organization. The secondary and primary research will be

undertaken to find the best solution and approach.

51

IV. Chapter: Research Findings and Results

This chapter focuses on the analysis of the results and findings from research undertaken. The aim to

illustrate different opinions of the experts regarding research topic and objectives and then to

analyse them, which will allow further discussion in next chapter.

1. Survey Results

Twelve experts representing four target groups responded to online survey. The aim was to identify

the most significant criteria when selecting projects into project portfolio. Detailed information

about responses of the survey is outlined below.

52

Graph 19. Detailed survey analysis

After gathering and analysis of the results the ranking of the criteria chosen by the 12 experts

participating in research have been created:

53

Position Criteria Rating Average

1 Financial stability (of an external organization) 4.50

2 Payback (time needed to recover the investment) 4.25

3 Social Return on Investment (Value in £) 4.20

4

Risks Analysis (Number of risks and their

probability/impact) 4.00

5 Budget (The size of the total project budget) 3.75

6 Volunteers (number required) 3.67

7 Profit (generated for the organization) 3.20

8 Sustainability of the impact 3.00

9 Impact (the number of people impacted and scope) 2.88

10 Feasibility of implementation 2.75

11 Learning benefits (for the organization and volunteers) 2.50

12 Time (Duration of the project and hours required) 2.20

13 Cost (obtained by the organization) 2.00

14 Security of the project 2.00

15

Training and Support (Available to volunteers from

external organization) 1.50

16 Prospect to hand down the project 1.00

17 Partners (Number of partners involved) 0.00

18 Net Present Value (NPV) 0.00

Table 4. Ranking of the criteria

Top five criteria from the ranking were chosen to create project descriptions (Appendix 2) which

were used for the second stage of the assessment and research.

54

2. Interview results

The interviews had been performed as an open discussion welcoming comments regarding every

aspect of presented methods and assessments. However, the interview was guided by the four main

questions and issues presented in detail in Appendix 5, which also includes detailed transcript of the

interviews. Each of the interviewees asked not to be named in the paper, therefore they are only

named by the positions they perform. Furthermore, the results of assessment using the scoring

method are presented in detail in Appendix 6.

Interview 1: President of SIFE Salford (PoSS)

Comments on the criteria chosen by the experts through survey

PoSS analysed the criteria and stated that the duration of the project should be judged along the

other criteria because we have a big turnaround of volunteers in SIFE and on average they work for a

year, therefore short projects are more successful than long, unless the same project leader remains.

On the other hand PoSS argued that the payback criteria is irrelevant to our organization as the only

thing we invest is time so it is difficult to measure such thing. The suggestion is to change payback

into impact. Accordingly, the comment on Social Return on Investment criteria indicated that

although it is important criteria it is very difficult to estimate. Finally, PoSS stated that risk analysis is

very important, although most of the time projects are very risky so there is a need to find a balance

between projects.

Comparison of the two methods: scoring and Analytical Hierarchy Process (AHP)

PoSS has described the scoring method as very straight forward, easy to understand and fast – giving

the results just after scoring all criteria and projects. However, the AHP has been described as more

challenging, asking more questions which made the expert think about the projects and criteria. It

put all scoring, selecting into perspective and give the idea of broader environment. Moreover, PoSS

stated that comparison of projects and judging them against each other and criteria as used in AHP

55

method gives deeper analysis and more accurate scores. Furthermore, PoSS appraised the Expert

Choice software as easy to follow and navigate, which made selection process easy.

Analysis of usefulness and appropriateness of methods presented for SIFE Salford

PoSS stated that both of the presented methods are worth implementing. However, the AHP is more

reliable in my opinion as it makes the expert think more deeply and pair comparison gives more

accurate scores. Moreover, the possibilities of Expert Choice – graphic display of results and easy

combination of judgments of different experts makes the whole process very smooth and easy.

Implementation of the selection methods

PoSS agreed that implementation of selection methods is worth for every organization, especially like

SIFE Salford. The importance of demanding the application forms similar to project descriptions was

noted. PoSS would choose the AHP method to implement, however the only constraint is cost of the

software, if there was a free application to use then it would be implemented.

Interview 2: Project Manager (IPM1)


According to IMP1 the criteria chosen by the experts are accurate. However ‘payback’ is too general

criteria for IMP1 and would change it to impact. Moreover, IPM1 would add one extra criterion –

effort required by the social enterprise.


Scoring method:

Clear and easy method to implement

in any organization

Does not need extra resources, might

be implemented in any spreadsheet.

This method shows you clear choice –

top score

No advice in case of the same result

For bigger organizations process of

choosing project might be too simple,

not many factors

56

AHP/Expert Choice:

Confronts criteria as well as projects

Gives more complex results

Difficult to get the same results for

two projects

More illustrative method

Requires software

Different ways of assessing criteria

and projects are not synchronized

(two gives 1-9 scale, one can give 1-

90) huge errors might occur


IMP1 suggested that selection methods are very useful for the organization to implement. However,

for the beginning expert would implement scoring method, and once the SIFE Salford grows the AHP

could be implemented if the software is free.


IMP1 would definitely implement AHP method; however the cost of the software is the main

constraint. The process of implementing Expert Choice and AHP would require organization to train

the people how to use the software properly, as lack of experience might provide to errors and

wrong decisions. Moreover, people have to be convinced to software results, because very often

they might be different than results based just on judgments.

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Interview 3: Community & Volunteering Manager (CVM)


CVM was surprised that duration has not been included as criteria as well as that expert chosen the

payback over the impact, which is more important in social enterprises. Regarding the budget, CVM

argued that it is not that important criterion to analyse as if the project is worth doing then some

funding will be always available.


CVM has never used any of the selection methods despite long experience in working with projects.

CVM valued AHP over scoring method mainly because the comparison of projects made expert focus

and analyse more deeply. Accordingly, the AHP method is more accurate as during judging there was

deep analysis involved, while the judging in scoring method took only few minutes without actual

consideration of options.


CVM would the AHP method for SIFE Salford, as it allows scoring by different experts and then

combines their scores. It is very efficient and would speed decision making process, as there are

always too many discussions over such topics. Also, AHP helps with smart decision making as it asks

many questions during the scoring process, while the scoring method is very limited and too fast.


CVM would certainly implement the AHP method. However, CVM states: I think it is not only useful in

selecting projects to the project portfolio but has many other potential applications such as choosing

the right supplier for the event.

58

CVM would adjust the criteria to the organization and case, then ask external organization write

proposal in bit more detail, but not too much – to make the process easy. CVM suggested that

explaining the method to the experts is crucial as understanding is a key to the assessment.

Interview 4: Project Member/Associate (IPA):


IPA stated that the Social Return Investment criteria could be more explained, how this will be

achieved and measured. Further, IPA would change payback criterion to number of volunteers

needed. Moreover, IPA believes that time/duration should be a criteria, because SIFE Salford is a

student driven organization, and members have limited time, which is main constraint


According to IPA the scoring method is much easier to implement and use, because it is very

straightforward. At the same time, the AHP made it difficult to judge against the criteria, however

made expert think and analyse more deeply.


IPA states that both methods would be very beneficial for the SIFE Salford. IPA would initially

implement the scoring method, and with the progress and more complex decisions the AHP. AHP: I

think AHP would be beneficial to implement in further stages as it allows updating the information

during the progress of the projects, and such analysis would help the management with further

portfolio decisions.

59


IPA would generally improve the criteria and adjust them to the organization that needs selection

technique. Then IPA would train people about the whole process and the purpose – choosing the

most suitable project for the organization. Further suggestion stated that improving the project

descriptions by providing more background information of the projects would be beneficial with

some summary; more detailed information would be needed from organization. IPA: I would

certainly consider implementing AHP method, if there was freeware software to use it with.

3. Results of scoring method assessment

In summary experts learnt the mechanism of the scoring method and judged it as very easy to use

and implement. The straightforwardness of the method has been main advantage of it. However,

experts learnt after using the second method – AHP, that scoring method is not very demanding and

did not make them analyse or consider options in greater detail.

Each expert was asked to score projects against the criteria (details in Appendix 6); the summary of

their scores is presented in a table below.

Expert / Project Project A Project B Project C

Expert 1: President of SIFE Salford (PoSS) 43 71 72

Expert 2: Project Manager (IPM1) 55 60 64

Expert 3: Community & Volunteering Manager (CVM) 34 60 57

Expert 4: Project Member/Associate (IPA) 52 73 82

Total score 184 264 275

Table 5. Results of scoring method assessment

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4. Assessment results and applications of the Expert Choice

Each expert has learnt how to use the Expert Choice which is software that manages the AHP method

to allow judgments and scoring in user friendly environment. Experts valued the method because of

the comparison aspect of criteria and projects which made them judge and analyse in greater detail.

Also, they believed that AHP presented more accurate score because of the cross judging and more

thoughts that were put in judging than during scoring method assessment. Moreover, the software

allowed easy combination of score of the projects but also put into consideration the combination

weight given to criteria, which has been skipped in scoring method.

The combined results of the assessment are presented below.

Graph 20. Combined results of AHP assessment

The graph above shows the combined score for the project made by four experts. It also indicates

the weight of the criteria used in the pillar graph on the bottom. The results of judgments of each

individual expert are presented in Appendix 7. The Expert Choice software with the file used for the

assessment has been placed on DVD added to this dissertation for further analysis and presentation

of results.

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V. Analysis and Discussion

This chapter brings together analysis of the literature and researches of other authors and research

undertaken in this dissertation. Both sources were used to answer the research questions and

address the objectives settled in the beginning of this paper.

Objective 1: The analysis of the projects criteria to outline the most

important and adequate for the process of selection into project

portfolio

Every project is very complex and consists of many elements, which have to be analysed when

selecting projects into project portfolio. Wysocki (2003) admits that there are many criteria outlined

by various authors that are significant and need to be taken into consideration. However, the social

enterprise is often small or medium business which has not enough resources to allow deep analysis

of each of them, according to interviewed project manager (IPM1). Therefore, the ranking created

using the survey, outlined top five criteria, which should be analysed in detail by social enterprises,

this include: financial stability (of an external organization), payback, social return on investment, risk

analysis, budget. This ranking has been created after receiving responses from twelve independent

experts. However, Cooper (2001) argues that the project should have a strategic alignment with

mission of the business and those that do not fit should not be taken into consideration. Martino

(2003) adds analysis of the competition as important criteria; however for the social enterprise it is

insignificant as the projects in most cases are submitted to organization not by the business.

However, it is interesting aspect if enterprise is applying for the grant, then analysis of

microenvironment would be helpful. On the other hand, Cleland (2003) mentioned duration of the

project as important criteria, which has been outlined in the project description, but not analysed as

a criteria. However, Community & Volunteering Manager (CVM) and President of SIFE Salford (PoSS)

commented that duration should be also analysed as criteria, agreeing with Cleland (2003), because

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there is a big flow of volunteers and average time worked is one year. Furthermore, Levine (2007)

and Westerveld (2003) outlined payback as very significant criteria; however CVM, interviewed

project associate (IPA) and PoSS argued that payback is not significant as it is difficult to estimate and

measure, therefore it is inaccurate. PoSS suggested that payback could be changed to impact

analysis, which is more important for social enterprise.

Stewart and Mohamed (2002) outlined that many authors focus on economic criteria such as return

on investment, cost-benefit analysis, and net present value. However, these have to be applied to

social enterprise case. All interviewees agreed on significance of Social Return on Investment (SRI)

criteria in project selection. While, regarding the financial stability criteria, the PoSS and IPM1

recognize the need of analysis of this area, but mention that it is important to analyse how the

project will be treated by that organization. If the project is independent and has its own budget,

then the financial situation of “employer” does not matter to social enterprise, unless it is paid in

instalments.

Rad (2006) mentioned that the size of the budget is an important criterion, however should not be a

key criterion. This is very true in social enterprise projects. PoSS mentioned that most of the projects

they do have limited or no money and they run fundraising activities to make them happen.

Accordingly, if a project has some sort of budget then it is very helpful, but if the project addresses

the social need, then this constraint can be easily overcome with a help of sponsors and partners. On

the other hand, IPA stated that budgets ease and speed up the progress of the project, and if there is

a need to complete many projects by the organization in short time (i.e. competition coming up),

then it is important to choose one with solid financial backup.

Finally, all the experts agree that risk analysis is crucial criteria, which helps with creating a balanced

portfolio, where organization should have some risky but rewarding projects and those certain with

less rewards.

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In summary, the five project criteria concluded through survey and commented in interviews are the

most appropriate for the social enterprise, with one exception of payback, which according to PoSS

and CVM should be exchanged with impact analysis (placed 9th in the ranking). Visitacion (2006) and

Levine (2007) emphasize that each project should be firstly analysed if it fits to the organization’s

strategy, mission and objectives before going through the selection process and interviewees agreed

with that. Projects that do not fit to portfolio or similar already exist should not be taken into

consideration.

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Objective 2: Analysis of the prioritization and selection methods of

projects in project portfolio management

Scoring method

The scoring method was presented to the experts because, according to Meredith (2006), it includes

multiple objectives and criteria, which is crucial in decision making process. Additionally, Rad (2006)

outlined that the models build on this method are easy to use and follow. This has been valued by

the interviewed Project Member (IPA), who said that it was very straightforward and easy to

implement in any organization. It has been followed by the President of SIFE Salford (PoSS) who

praised the simplicity and speed of selection process while using this method. Project Manager

(IPM1) noted that it does not require extra resources and makes it cheap to use. Accordingly,

Wysocki (2003) and Heldman (2007) presented the scoring method as the one commonly used in

various sectors because it is easy, fast and cheap.

However, it has also many disadvantages noted by authors in literature and by interviewed experts.

Rad (2006) argued that the scores are not precise, which has been brought up by the PoSS who said

that the scores can be inaccurate due to lack of analysis while scoring. Following, IPM1 noted that

there is no guidance or advice in case of same score for two or more projects. Meredith (2006) added

that experts are forced to make difficult decision based on limited information, which was also

criticised by the IPA who wished to receive more background information on projects. PoSS declared

that scoring using numbers is not the best method for everyone; therefore the process could be

adjusted to the expert. This was picked up also by the U.S. Government Office (GAO), which

highlighted the importance of defining what each score represents in greater detail. According to

Warall (2000) there might be difficulties with expressing judgments based only on numerical scale.

PoSS declared the same view arguing that numbers are not precise and final score may be different

to the one if the scale was structured differently. Finally, IPM1 valued the method for its simplicity,

65

however if the organization faces difficult and complex decision, then the scoring method would be

inaccurate due to lack of correlations between factors.

AHP/Expert Choice method

According to Al-Harbi (1999), Harker and Vargas (1987), Perez (1995) the AHP method is viable and

widely used by governmental agencies, corporations and consulting firms. The method has many

different applications such as contractor selection, product project screening or semantic-based

facial expression recognition (Table 2). In this dissertation research the AHP was used as the method

to select the project into project portfolio of social enterprise. However, IPA recognised that there

might be different application for the organization as well, such as choosing the speaker or location

for the conference.

According to Al-Harbi (1999, p.20) the aim of AHP and MCDA methods is to help decision-makers

learn about the problems they face, to learn about their own and other parties' personal value

systems, to learn about organizational values and objectives, and through exploring these in the

context of the problem to guide them in identifying a preferred course of action. PoSS agreed with

such statement saying that the scoring using AHP put the process into broader perspective allowing

deeper analysis and thinking than it was done while using the scoring method. CVM express similar

opinion saying that there was more analysis and focus while making decisions. IMP1 valued AHP

because it confronts the projects as well as criteria. PoSS stated that comparing projects against each

other made the whole process more accurate and reliable. According to Saaty (2001) AHP provides

the scale for measuring intangibles and a method for establishing priorities. The scales used in Expert

Choice were praised by the IMP1 who stated that the method is very illustrative, as the results are

presented in comprehensive way on graphs. On the other hand PoSS valued the available scales:

numerical, expressed in words and colours (apple graph), which was a significant disadvantage in

scoring method, according to that expert. Saaty (2001) notes that AHP tracks the logical consistency

of judgments used in determining priorities and that Expert Choice checks that by displaying

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inconsistency rate in each judgment screen. However, IPM1 noted that Expert Choice software has a

disadvantage, as it uses scale 1-9, the judgments made on apple graph are calculated on 1-99 scale,

which if not fixed and may create inaccurate scores.

Although, the method made experts analyse and focus more deeply while scoring, which according

to them, gives more accurate scores, the IPA argued that AHP created more difficulties for him to

judge than the scoring method. Moreover, IPM1 valued the method as it might be used in complex

projects; however Cheng et al. (2007) argues that AHP is rigid and inflexible, making it hard to use in

fast moving projects. Furthermore, Watson and Freeling (1987) criticised the AHP method as

questions asked in the selection process are not constructive, i.e. which criterion is more valuable to

the goal. According to these authors, that does not give precise score or weight.

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Objective 3: Research the usefulness and appropriateness of the

analysed methods in selecting and prioritizing projects in project

portfolio management

According to Schuyler (1999) many managers are lacking skills that allow sound decisions, therefore

there is a need to implement the decision making approach. In case of studied social enterprise, the

management structure and responsibilities have been established, however, as outlined by the

President of SIFE Salford (PoSS) and Directors, the decision process regarding selecting projects is

unstructured and most of the time very random. Therefore, implementing selection method,

according to management of studied organization, is crucial to guarantee future successes and

sustainability. According to Hwang an Yoon (1981) the Multi-criteria decision methods (including

AHP) have been designed to help decision makers with solving and evaluating problems, such as

selecting the appropriate project to the project portfolio. According to Al-Harbi (1999) the methods

like AHP help making sound decisions. PoSS agreed with that saying, that AHP method inspired to

critically analyse each aspect of the projects and because of the approach (comparing in pairs)

produced reliable results.

Warrall (2000) stated that experts might be afraid to express their actual judgments due to certain

circumstances (i.e. presence of senior management). Therefore, it is important to build functional

atmosphere for applying the method. PoSS finds that many pointless discussions can be passed when

scores are made individually and then automatically combined as it is done in Expert Choice. Such

approach to decision making would speed up the process producing a compromise between the

team according to Community & Volunteering Manager (CVM).

Project Member (IPA) stated that both presented methods would be beneficial to implement by

social enterprise. According to Saaty (2001) the AHP method enables people to refine their definition

of a problem and to improve their judgment and understanding through repetition. IPA finds this

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application very useful, when judgments and scores could be checked and changed at any stage of

the project, which would be very useful.

Although all experts found selection methods very beneficial and appropriate to implement to social

enterprises, the issue of cost came up. According to Project Manager (IPM1) the software used in the

assessment might be too expensive for organizations; therefore, they will be limited to use scoring

method, which was criticized by three experts out of four. However, if there was free software

available the AHP method would be suitable for any social enterprise to implement. PoSS valued the

software which makes the process very easy. ExpertChoice.com (2009) states that the software hides

complicated mathematical algorithms, allowing experts to make decisions in user friendly

environment.

Finally, IPA and CVM found that applying the scoring or AHP method could help social enterprises not

only with selecting projects into their portfolio but also with choosing suppliers, partners or venues.

The wide application opportunities were outlined by Al-Harbi (1999), Harker and Vargas (1987),

Perez (1995) who mentioned that the governments use AHP method to decide where to build the

bridge and which supplier to choose. Because of the complexity of such decisions the structural

approach of AHP is used.

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Objective 4: Implementation of the Multi-Criteria Decision method –

Analytical Hierarchy Process (AHP) in social enterprise, in the case of

SIFE Salford for a project portfolio management

According to President of SIFE Salford (PoSS), the organization did not build the portfolio of projects

as the methodology of portfolio project management advices. According to Bridges (2003) any

enterprise can have the best ideas or methods, but if they are not structured or implemented

correctly, the problems may occur. PoSS stated that SIFE Salford contributed to the projects which

were not aligned with their mission and strategy, which led to loosing time and volunteers. According

to Wysocki (2003) the organization needs to establish the strategy of portfolio and then select

projects which suit that. Interviewed Project Manager (IMP1) shared his experiences while working in

different organizations, that most of the time projects are chosen based on assumptions and

experience, no method is used. Both PoSS and IMP1 agreed that they would recommend

implementing the AHP method for project selection to project portfolio for social enterprises.

Moreover, Community and Volunteering Manager (CVM) after using the AHP discovered also other

potential applications of the approach, such as choosing the right supplier for the event. Saaty (2001)

the creator of AHP, did not limited the use of the method, the case studied by him shows how

Brandywine River Region in Pennsylvania (USA) solves an issue of possible urbanization and its

environmental effects (Saaty, 2001, p.15).

All the experts agreed that implementing selection method in social enterprise would be beneficial,

especially for project selection, but also for other selections (CVM). The process of implementing the

method has been discussed with the experts, as this dissertation aims to help and provide guidelines

for SIFE Salford regarding the use and application of selection methods.

Firstly, PoSS would develop the project descriptions, by adjusting criteria to relevant cases. Project

Member (IPA) follows that asking for more background information and expanded explanation of

what exactly would be required from the team on any given project. CVM would ask external

70

organization for more detail to avoid confusions or misunderstanding. Saaty (2001) advices to

analyse every problem or issue, in order to apply relevant criteria, which can be judged later.

According to PoSS, in SIFE Salford the decision makers would be president, vice-president and

directors. Therefore, IPA suggests training them about the method and purpose. IPM1 adds that

preparation to the assessment is very important, as everyone needs to understand the purpose and

goal. Unstructured approach may lead to errors and problems, which could result in choosing

unsuitable project. PoSS suggested asking individuals to score projects and then, thanks to Expert

Choice software, the results would be combined, giving final score. Al-Harbi (1999) valued AHP

because it allows group decision making and makes the process easy, PoSS adds that many pointless

discussions may be avoided.

Experts agreed that project descriptions with criteria needs to be adjusted to special case of choosing

the project. Then education and training for the experts need to be provided, before any assessment

takes place. Further, the results need to be analysed to give the final answer to the problem studied.

Interviewed experts were concerned that Expert Choice software may be too expensive to

implement, but the Expert Choice Inc. allows discussion for implementation and the terms and

conditions of use for the special case of SIFE Salford could be agreed.

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VI. Conclusions and recommendations

More and more organizations around the world are project-based, especially social enterprises. This

became a case due to growing external funding, grants and awards for projects which have defined

time, cost and quality expectations. Project management grew as a discipline with many methods,

techniques and processes which help organization with delivery of successful projects.

The studied social enterprise has completed successfully three projects in their first year of

operating, which resulted in getting into semi-finals of the SIFE National Competition – United

Kingdom. However, according to President of the organization, the team could have done better if

only projects that fit the strategy, aim and purpose of the society, were worked on. Instead, the team

spent time on projects that had nothing in common with its activities, which could have been spent

on the more suitable projects. Also, some committed volunteers resigned because of such projects,

which led to conflicts and problems within the organization.

Therefore, the researcher recognized the need of implementing one of the wide ranges of selection

method. Two of which were presented to the experts, who agreed that the Analytical Hierarchy

Process (AHP) method would be most suitable and useful to handle such process, because it makes

decision makers consider all possible options, as well as analyse projects and compare them against

each other. Consequently, experts’ valued AHP method as one presenting more valuable and

accurate scores than the other one, scoring or criteria weighting, which is faster and clearer but not

challenging to the experts.

According to experts and authors in literature, the AHP methods could be very beneficial for every

organization, not only for selecting projects but could have many different applications from

choosing the right supplier, venue or speaker for the conference. The group assessment using this

method may speed up the process of decision making allowing detailed analysis and review of the

options.

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The author of the AHP method, Thomas L. Saaty and authors who researched the applications of the

method, recommend the use of it for any problem solving or decision making. Consequently, the

method is very easy to implement and use if supported by the Expert Choice software. The program

allows experts to make judgements in user friendly environment and then combines individual scores

into one final score, which has been valued by the President of SIFE Salford, as many pointless

discussions could be skipped.

The author of the dissertation hopes that the implementation of the project selection method in the

SIFE Salford will help the team focus on projects that matter to the organization and members who

contribute to them.

However, the author points out that the organization should think about creating a strategy for their

project portfolio and build the balanced portfolio, which would bring them success in the community

as well as in the national competition.

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Reflection on the extent to which the research aims were

accomplished

The research objectives were accomplished, giving the advice to the social enterprise studied, SIFE

Salford, about the need of introducing the project selection method when choosing projects into the

project portfolio.

For further research it would be advisable and interesting to study other available selection methods

and comparing them, trying to find the most suitable to social enterprises in general, not only those

student led. Moreover, the concept of project portfolio management could be studied in greater

detail giving social enterprises the guidelines. As found in the literature and cases of various

companies, project portfolio is growing discipline, and researching the techniques and methods in

this field would be beneficial for social enterprises, especially, focusing on creating balanced portfolio

with projects of high risk and payback along with those with low risk and lower payback. Social

enterprises often operate on project basis, therefore researching how they manage them and if

there are tools and techniques which could ease the process for them would be highly

recommended.

Finally, there is a big potential for further research in the field of project portfolio management,

especially when there is not a lot of articles or reports regarding this topic. Researcher sees the

opportunity to develop this master dissertation into doctoral thesis in the future.

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Appendix 1: Survey implementation

The survey had been send to the 12 carefully chosen people by email:

By clicking on the link in the email the surveyed person was sent to the website with online survey,

which looked as follows:

Dear Ms Jones my name is Mariusz Andreasik and I am doing my master dissertation in Project Management at the University of Salford. I kindly ask you to answer one question in the survey which can be accessed through the below link. Survey: http://www.surveymonkey.com/s.aspx?sm=VjqCISaZWPSkZB_2fvrKSuoQ_3d_3d The aim of my research is to analyse tools and methods available for selection of the projects that can be accepted to the project portfolio. I aim to provide useful and efficient tool of decision making for a social enterprise - SIFE Salford (Students in Free Enterprise). I would be grateful for your help with this and next steps of my research. Yours faithfully, Mariusz Andreasik MSc in Project Management Supervised by Kevin Kane The University of Salford

http://www.surveymonkey.com/s.aspx?sm=VjqCISaZWPSkZB_2fvrKSuoQ_3d_3d

75

76

Appendix 2: Project Descriptions Project A Comments

Overview The SIFE Salford volunteers have been asked to deliver training for people in the local community with life problems. Along the knowledge and skills transfer, there is a need for life coaching. The organization itself, needs help with fundraising and looking for sponsorships, grants etc.

Duration 2 years


The organization is solely supported by the grants and sponsors and operates on non-for-profit basis.


For training and supporting individuals it could be 3 years or never, due to their sensitive situation. Regarding help for the organization it could be 2 years.

Social Return on Investment (Value in £)

For every individual that is successful after the project it could be £15.000 however the rate of such success is low (unlimited number of participants on the project). For the organization it could be £10.000 after 2 years.

Risks Analysis (Number of risks and their probability/impact)

1. Participants of the project from an external organization drop out during the project (High).

2. Volunteers cannot handle the sensitive situation of the project participants (Medium).

3. The organization struggle to get sponsors and needs to be closed (Low).

Budget (The size of the total project budget)

£0.00 from the external organization and none has been raised. If any money needed sponsorship will be required.

77

Project B Comments Overview The SIFE Salford has been asked to

prepare and implement the Financial Literacy program for kids, teenagers and adults. This will require materials preparation, training for and by volunteers.

Duration The grants are given for 1 year. The scheme may or not be dropped year later.


The project has been originated by the International Bank, which went through many problems lately due to financial crisis. However, is keen on continuing the support for the project.


Due to different age groups, estimated payback time for kids is 5 years, teenagers - 3 years, adults - 2 years.


Knowledge gained and practiced by the participants could bring £10.000 for each group after given payback time (kids – 5 years, etc.)


1. Participants will not be able to transfer the knowledge into real life (High).

2. Volunteers will not be able to effectively and efficiently prepare and transfer the knowledge, teach the skills. (Medium)


£500.00 for 1 year (opportunity for another £1000.00 if the project is successful and awarded a prize of the year by the bank from list of 20 participants)

78

Project C Comments Overview The SIFE Salford volunteers have

been asked to help a local organization by providing training to their staff and people living in the community. Moreover, the help is needed with events organization, marketing & promotion to attract new customers and business.

Duration 3 years


In £10.000 debt, but backed by the local church who supports financial stability. On a 3-year plan to remove debt by increasing profitability.


After 3 years of support and volunteering the organization it is planned that it will start being self-sufficient and profitable.


Through training and support provided to the local community it is expected that £15.000 will be value of SRI (after 3 years of training and further 2 years)


1. The organization loses the backup of the church before paying of a debt (Medium).

2. The 3-year plan is not successful as forecasted at any point of control (Medium).


£20.000 for next three years in quarterly instalments given by local council only for investments (no paying off the debt)

79

Appendix 3: Interview questions

The guiding questions:

Would you like to comment on the criteria chosen by the experts? Would you see change, add or

modify any of them?

Could you compare the two methods used after the assessment you did?

Which of the method would be more useful and appropriate for SIFE Salford?

Would you like to implement the preferred method into your organization? Any comments about

such process?

80

Appendix 4: Overview of SIFE Salford (studied social enterprise)

SIFE Salford team is based at the University of Salford. Student society, which supports local

communities by working with them, consulting and providing trainings. Along this cooperation,

organization aims to improve skills of their members and increase their employability through the

projects and workshops, to increase entrepreneurial and business skills and knowledge.

Members: SIFE Salford has team of 60 students from various backgrounds (21 nationalities) and

areas of study (20 different courses).

Advisers: The organization has a base of 20 advisers from various industries who are keen on helping

the team on their projects.

Mission statement

'To create sustainable value by successfully empowering and educating the local community and

students with the necessary financial end entrepreneurial skills needed to improve their standard of

living and inspire them to take on real life opportunities'

SIFE (the concept)

SIFE (Student in Free Enterprise) is dedicated to nurturing the entrepreneurial skills of university

students in a way that is both effective in developing their future careers and meaningful to the

community.

The students, guided by university and business advisers, form a student-led SIFE team to develop

sustainable projects which create economic opportunity for others. Their projects aim to increase

knowledge of entrepreneurship, market economics, personal success skills, financial literacy,

business ethics and environmental sustainability.

81

Appendix 5: Transcript of interviews

Question 1: Would you like to comment on the criteria chosen by the

experts? Would you see change, add or modify any of them?

President of SIFE Salford (PoSS): After analysis of these criteria, I would say that duration should be

judged as well as other criteria and treated equally. Duration of the project is very important as we

have a big turnaround of volunteers in SIFE and on average they work for a year, therefore short

projects are more successful than long, unless the same project leader remains.

The payback criteria is irrelevant to our organization as the only thing we invest is time so it is

difficult to measure such thing. I personally, would change that to impact. Also, Social Return on

Investment is very difficult to estimate and often is inaccurate; however it is an important criterion.

So if we knew how to forecast it, then it would be very helpful. Also the risk analysis is important,

however most of the time the projects in which we participate we can only do better, but it is

important that we take into consideration the risks. The financial stability criteria is quite important,

but the best is when the project is independent and has its own budget paid up front, then we don’t

have to worry about financial situation of the funding company, as it was with HSBC when we

received a grant and they had troubles, we already had money in the bank. But that differs from

project to project, when they pay in instalments then it is more relevant.

Project Manager (IPM1): Five criteria chosen by the experts are in my opinion is the proper one.

However, ‘payback’ is too general criteria in my feeling. Social enterprises (SE) are focused rather on

impact than on payback. In my opinion, the activities of SE should be assessed in terms of changing

people’s lives, developing living standards or developing essential skills.

Moreover, I would add one extra criterion – effort required by SE, in this case effort required by SIFE

Salford. It is crucial for organization to manage resources properly, many times different

82

organizations were taking projects to its portfolio which required more resources than organization

possessed. Without clear analysis of resources needed project is very likely to fail before finite date.

Community & Volunteering Manager (CVM): I believe that duration should be criteria, and I am

surprised to see it only as a description element. Also, I do not agree with experts regarding the

payback criteria, from the list that was available I would choose impact over it because it is easier to

measure and it is more important in social enterprises. Finally, the budget is important, however I

would not personally treat as a key element, as there is always some funding available, and if the

project is worth time then investors will be happy to join.

Project Member/Associate (IPA): I think the Social Return Investment criteria could be more

explained, how this will be achieved and measured. Further, I will change payback to number of

volunteers needed, because it is hard to calculate and often is irrelevant. I strongly believe that

time/duration should be a criterion, because SIFE Salford is a student driven organization, and

members have limited time, which is main constraint.

Question 2: Could you compare the two methods used after the assessment

you did?

President of SIFE Salford (PoSS): At first I liked the scoring method as it was very straight forward,

easy to understand and fast – giving the results just after scoring all criteria and projects. And all you

need is piece of paper and you are ready to assess anything you want, all options.

But the second one (AHP) open my eyes and made me think, while the first one was very easy to

follow but not demanding. AHP made me to ask more questions about the projects and their criteria

fulfilment. It put all scoring, selecting into perspective and give the idea of broader environment. I

think that the idea of comparing the projects in pairs is great as it made me think and analyse deeper

83

than the first one. Also, the comparing of the criteria in AHP gives more accurate score than

individual scoring in the first method.

Also I liked the Expert Choice assessment with visual scoring (apple graph) with colours as I am not a

fan of the numbers. This made it very easy to score and compare.

Project Manager (IPM1): Scoring method:

Clear and easy method to implement in any organization

Does not need extra resources, might be implemented in any spreadsheet.

This method shows you clear choice – top score

No advice in case of the same result

For bigger organizations process of choosing project might be too simple, not many factors,

lack of correlation between criteria and factors

AHP/Expert Choice:

Confronts criteria as well as projects

Gives more complex results

Difficult to get the same results for two projects

More illustrative method

Requires software

Different ways of assessing criteria and projects are not synchronized (two gives 1-9 scale,

one can give 1-90) huge errors might occur

Community & Volunteering Manager (CVM): In the organizations I worked in we have never used

the selection methods, so it was interesting to learn about those two presented. The scoring method

was really easy to learn and use and the scores were very easy to interpret and analyse.

84

However, the AHP method opened my eyes and I have to say it was much better than the first one.

Mainly because it made me compare projects against each other, which made me focus and analyse

more deeply the criteria and descriptions. Also the criteria comparison gave much more accurate

scores than first one, as it is more justifiable.

Project Member/Associate (IPA): In my opinion scoring method is much easier to implement and

use, because it is very straightforward. On the other hand, the AHP made it difficult to judge against

the criteria, however made me think and analyse more deeply.

Question 3: Which of the method would be more useful and appropriate for

SIFE Salford?

President of SIFE Salford (PoSS): I think both of the methods are worth implementing. However, the

second one is more reliable in my opinion as it makes the expert think more deeply and pair

comparison gives more accurate scores. Also, the Expert Choice as I found allows fast assessment by

many experts and then combined score and results are produced. This make it easier as all the

arguments that take place when making such decisions can be forgotten when everyone is left on

their own to make the judgments.

Project Manager (IPM1): SIFE Salford as a Social Enterprise is constrained by money. Professional

decision support software might be too expensive for that kind of organization in that early stage.

Currently I would suggest using only Scoring method and when the organization will grow I would

recommend using software based method as it allows assessing projects in more comprehensive

way. However, if there was free software for AHP method, then I would recommend using int.

Community & Volunteering Manager (CVM): After learning about presented methods I would use

the AHP method for SIFE Salford, as it allows scoring by different experts and then combines their

scores. It is very efficient and would speed decision making process, as there are always too many

85

discussions over such topics. Also, AHP helps with smart decision making as it asks many questions

during the scoring process, while the scoring method is very limited and too fast.

Project Member/Associate (IPA): I think that both methods would be very beneficial for the SIFE

Salford. I personally, would initially implement the scoring method, and with the progress and more

complex decisions the AHP. I think AHP would be beneficial to implement in further stages as it

allows updating the information during the progress of the projects, and such analysis would help the

management with further portfolio decisions.

Question 4: Would you like to implement the preferred method into your

organization? Any comments about such process?

President of SIFE Salford (PoSS): I would like to implement an AHP in our social enterprise SIFE

Salford. I think it is worth creating the application forms, similar to the project descriptions provided

but with slightly different criteria and more information of what tasks my team have actually to do.

However, I am worried that the software presented Expert Choice cost too much, but if there were

free alternatives then I would definitely ask my Directors and Vice-Presidents to make such

assessments before we decide to take on any project to our portfolio of social projects.

Project Manager (IPM1): These kinds of methods are widely used in Project Portfolio Management;

we were choosing projects to our portfolio by assumptions and experience. I would definitely

implement AHP method; however the cost of the software is the main constraint. About the process

of implementing Expert Choice to the company the main issue is to train the people how to use the

software properly, as lack of experience might provide to errors and wrong decisions. Moreover,

people have to be convinced to software results, because very often they might be different than

results based just on judgments.

86

Community & Volunteering Manager (CVM): I would certainly implement the AHP method.

However, I think it is not only useful in selecting projects to the project portfolio but has many other

potential applications such as choosing the right supplier for the event.

I would certainly adjust the criteria to the organization I work with then ask external organization

write proposal in bit more detail, but not too much – to make the process easy. I think also that

explaining the method to the experts is crucial as understanding is a key to assessment.

Project Member/Associate (IPA): I would generally improve the criteria and adjust them to the

organization that needs selection technique. Then I would train people about the whole process and

the purpose – choosing the most suitable project for the organization. I think that improving the

project descriptions by providing more background information of the projects would be beneficial

with some summary; more detailed information would be needed from organization. I would

certainly consider implementing AHP method, if there was freeware software to use it with.

General Opinion about SIFE Salford by the President of SIFE Salford

Our organization has completed successfully three projects in first year of running, which allowed our

team progress to the semi-finals of National Competition in the United Kingdom. We failed because

we did not complete one of the projects and contributed to two irrelevant to our organization. We

have not recognised the threat of wasting time and loosing members of our team because of working

on the project which was irrelevant to our original aim and mission. We could not present these

projects on competition even though they were successful. Also, the projects we have needs to be

reviewed and analysed to see how they fit to our organization and what’s their future in order to

guarantee smooth take over by other groups. The process of selecting projects needs to be reviewed

and changed. There were many influences in previous years that our volunteers help with certain

projects, but there need to be screening process in place, that would defend us from getting involved

in projects from which we won’t benefit or that is irrelevant to us and our members.

87

Appendix 6: Scoring method assessment results Below are presented the results of the assessment using the Scoring method.

Expert 1: President of SIFE Salford (PoSS)

Criteria Weight (1-5) Project A

Score (1-5) Project A

Totals Project B

Score (1-5) Project B

Totals Project C

Score (1-5) Project C

Totals


4 3 12 5 20 4 16


2 3 6 5 10 5 10


5 2 10 2 10 3 15


4 3 12 4 16 4 16


3 1 3 5 15 5 15

WEIGHTED SCORE

43 71 72

88

Expert 2: Project Manager (IPM1)



Totals Project B


Totals Project C


Totals


2 5 10 3 6 2 4


4 4 16 2 8 4 16


5 4 20 5 25 4 20


3 2 6 4 12 4 12


3 1 3 3 9 4 12

WEIGHTED SCORE

55 60 64

89

Expert 3: Community & Volunteering Manager (CVM)



Totals Project B


Totals Project C


Totals


2 3 6 5 10 3 6


1 2 2 3 3 4 4


5 3 15 3 15 4 20


4 2 8 5 20 3 12


3 1 3 4 12 5 15

WEIGHTED SCORE

34 60 57

90

Expert 4: Project Member/Associate (IPA)

Criteria Weight (1-

5) Project A


Totals Project B


Totals Project C


Totals


3 2 6 4 12 5 15


4 2.5 10 2.5 10 4 16


4 4 16 4 16 4 16


5 2 10 3 15 2 10


5 2 10 4 20 5 25

WEIGHTED SCORE 52 73 82

91

Appendix 7: AHP method assessment results

President of SIFE Salford (PoSS)

92

Project Manager (IPM1)

93

Community & Volunteering Manager (CVM)

94

Project Member/Associate (IPA)

95

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Forester Research.

http://www.businesslink.gov.uk/bdotg/action/aboutus?r.lc=en&page=AboutUs&r.s=h

http://www.cabinetoffice.gov.uk/third_sector/social_enterprise/action_plan.aspx

http://www.expertchoice.com/products-services/expert-choice-115

http://www.setas.co.uk/funding_list.asp

http://www.sifesalford.org/

http://www.gao.gov/new.items/d0449.pdf

Building a project portfolio in the social enterprise. Analysis and implementation of project selection methods. Case study of SIFE Salford.

Business

benefits of project

project management

project alignment

balanced portfolio

portfolio strategy

project life cycle

studied methods

social enterprise sife