UNDERSTANDING DIFFERENCES BETWEEN ADOPTERS AND NONADOPTERS OF INFORMATION TECHNOLOGY PROJECT PORTFOLIO MANAGEMENTby HAYA AJJAN, RAM L. KUMAR, CHANDRASEKAR SUBRAMANIAM

Int. J. Info. Tech. Dec. Mak.

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Year
2013
DOI
10.1142/S0219622013400129
Subject
Computer Science (miscellaneous)

Text

UNDERSTANDING DIFFERENCES BETWEEN ADOPTERS

AND NONADOPTERS OF INFORMATION TECHNOLOGY

PROJECT PORTFOLIO MANAGEMENT

HAYA AJJAN

Management Department

Elon University, 400 N O'Kelley

Elon, NC 27244, USA hajjan@elon.edu

RAM L. KUMAR* and CHANDRASEKAR SUBRAMANIAM†

Department of Business Information Systems & Operations Management

University of North Carolina at Charlotte 9201 University City Blvd, Charlotte, NC 28223, USA *rlkumar@uncc.edu †csubrama@uncc.edu

With the increased interest among organizations in managing Information Technology (IT) projects as a portfolio, there has been a growing need for research on factors in°uencing adoption of IT Project Portfolio Management (ITPPM). ITPPM allows organizations to improve the alignment of IT projects with organizational strategy, by balancing the risks and returns from inter-related projects. To contribute to our understanding of ITPPM, this study examines the adoption of ITPPM through the theoretical lens of di®usion of innovation. Using the technology, organization, and environment (TOE) framework, we model ITPPM adoption and test our model using survey data from 302 project managers. Our results show that an organization's external pressure, ITPPM costs, organizational support, quality of data on existing IT projects, number of IT projects within the organization, and business resistance are signi¯cantly related to the adoption decision. We also ¯nd interesting results in how expected bene¯ts of ITPPM and compatibility are perceived as equally important by both adopters and nonadopters. In light of the increasingly complex IT project management environment faced by organizations, our paper helps managers to understand and focus on key enablers of ITPPM adoption and better manage ITPPM inhibitors.

Keywords: IT project portfolio management; innovation factors; organizational factors; environmental factors; adoption. 1. Introduction

For most companies, managing a group of IT projects to keep them aligned with corporate strategy is a challenging process,1 particularly given the large number of ongoing projects and the interdependency among the various projects. There has been an increasing need to adopt methodologies that support collective management

International Journal of Information Technology & Decision Making

Vol. 12, No. 6 (2013) 1151–1174 °c World Scienti¯c Publishing Company

DOI: 10.1142/S0219622013400129 1151

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Project Portfolio Management (ITPPM) is seen as an answer to this need by many organizations. ITPPM is a systematic process to determine the optimal mix of current and proposed IT projects and manage them e®ectively in order to achieve the organization's strategic goals while considering the resource constraints.4 ITPPM is most helpful in linking organization's long-term strategy to its IT investments.4,5

Successful deployment of ITPPM helps the organization achieve the following bene¯ts: (1) improved visibility of IT projects; (2) increased ability to objectively select projects for funding; (3) improved alignment of IT projects with strategic goals; (4) IT cost reductions, (5) improved communication among project managers, business users, and senior managers; and (6) and higher buy-in for the resulting project decisions.6

Several organizations have established project or portfolio management o±ces to introduce asystematic approach to the management of groups of IT projects.7 The project management and portfolio management vendor market, which includes

Microsoft, Oracle, SAP and CA, has reached $3.1 billion dollars in 2010, with a projected growth rate of 6.5%.8 Practitioner organizations such as the project management institute (PMI) have championed the introduction of project portfolio management (PPM) in organizations and have developed a PPM standard to facilitate its adoption.9 ITPPM was also selected as one of the top 10 IT trends for 2009 that are likely to help an organization through challenging economic environment and ensure its competitive advantage.10 Yet, research on IT project management has focused mostly on management of single projects and there is a paucity of research on management of multiple and concurrent projects.11 Organizations most often encounter challenges in e®ectively managing such groups of IT projects.12 and vary considerably in terms of their success in managing IT projects portfolio.2

Although technology adoption has been studied extensively from the organizational perspective for technologies such as e-business, electronic data interchange (EDI), open systems, RFID technologies,13–17 little academic research has focused on the adoption of PPM for IT projects. Adopting ITPPM requires signi¯cant system integration and process changes (e.g., selection and prioritization of IT investments,

IT project monitoring, IT project data collection processes, etc.18 There are signi¯cant organizational changes that accompany the new ITPPM process. In order for ITPPM to be successfully adopted, people, processes, and technology need to be synchronized to work together to achieve ITPPM objectives.4 Given the signi¯cance of ITPPM as a tool to manage the increasingly complex IT project environment in organizations and the relative lack of systematic understanding of facilitators of ITPPM's adoption, this paper's research objective is to study the phenomenon of ITPPM adoption. Using the literature on PPM and di®usion of innovations,19,20 we develop and empirically test a model of ITPPM adoption based on technology–organization–environment (TOE) framework.19 The results of this study will help managers who are faced with the strategic choice of ITPPM adoption decision to better understand the key enablers of

ITPPM adoption and anticipate the points of resistance. 1152 H. Ajjan, R. L. Kumar & C. Subramaniam