Trending now, project, portfolio and innovation management are widely used terms to discuss companies’ success and failure. However, there are more sophisticated methodologies that contribute to companies’ strategies. Project management is the narrowest point to speak of. For a company to succeed, it must have a vision through defining its long-term goals and setting projects that meet it. “Modern portfolio management tells us the importance of simulating real securities, especially for fixed income and structured products, during the development of optimal portfolios, as well as the importance of simulating financial investments over time to match in a transparent way the actual goals and constraints instead of relying solely upon past performance or personal judgment” (Dutta, 2019, p. 4) . Things do not stop here, but rather start from an innovative model which is the broad key to foster this productivity. Often, innovation management is grouped together with another type of management entitled technology management (Igartua, Garrigós, & Hervas, 2010). This is because new technologies and technological developments are often the product of innovation processes (Igartua et al., 2010). To develop innovative technologies, strategic thinking, insight, and creativity are at the core, since employing these skills enables individuals to reveal new ideas and processes that can be improved (S. Erzurumlu, 2017). Globally, this framework is neglected in most SMEs (Small and Medium sized Enterprises) due to limited resources and overlapping roles. A good strategy lies in the integration between projects within a certain portfolio through an innovation-support model.
Project management has been there since human activity but without a clear definition. People had simple visions to support their needs and worked according to this. With the fast progress and the globalization that we have reached, needs have developed, therefore, complex strategies arouse to serve. It started with project management which is a simple definition for putting projects on track. We now find it widely spread among firms but not getting the maximum out of it due to the lack of its integration with other models. With time, the term portfolio management was introduced, in its beginnings, it was based on project selection, and then understanding it more and choosing the appropriate projects that align with the company’s goals. Also, innovation management was introduced to facilitate the strategies.
When the ice age started to end, wheat plantation has started and people started to settle, thus they discovered agriculture, from there the small project of village concept started, it was based on finding food and protection which was regulated by tribes, project managers in that time, through a social & economic system. Another dramatic change that occurred was the beginning of urban revolution and cities, around 5000 years ago, because of starting irrigation on river sides, thus, people started to build their homes to stay for long times. This caused the start of capitals, therefore a bigger competition occurred, starting portfolio management. The government system was created to provide safety and collect taxes to survive and grow. Later on, the industrial revolution came with many innovative ideas and needing more control with many people moving from rural areas to cities, which requires smart control over the empire that has occurred. We saw grand empires that died and others that grew fast and so big. This explains briefly how needs for complex systems were derived explaining that project, portfolio, and innovation management where there since ever controlling our lives. This will be discussed more in coming chapters.
We can now observe the complexity of each model as a whole science, and we can see, with time, scientists started to separate and study each alone. Henry Gantt might be the father of modern project management (Westland, 2018). In 1917, he created the eponymous scheduling diagram (Westland, 2018). He used a visual timeline to plot tasks as points with durations and linked them if they were dependent. That way, everyone could see the schedule more clearly (Westland, 2018). Managers do not offer portfolios that are optimal on their own; managers instead specialize in providing components of optimal portfolios if this is advantageous to investors (Asparouhova et al., 2015).
In the 1930s, before the advent of portfolio theory, people still had "portfolios". However, their perception of the portfolio was very different, as was the primary method of building one (Beattie, 2018). When examining management innovation, it is equally as important to study the context of its promotion and practice as its content. In doing so, we are led away from a linear conception of historical evolution and toward an understanding of innovative developments in terms of the conditions that made them possible and, more importantly, plausible and thereby practical in their effects (Mheducation, 2019).
Going not so back in history, we can find direct translation to the effect of systems integration on businesses’ failure and success. Compaq was a leading company in its industry; however, it was sold in 2001 to HP (Hewlett Packard), yet it was a failing merge. The company had shown a loss in the last quarter, investor confidence was slipping, and it seemed as if Compaq was being left behind in the blur of PC (Personal Computer) industry change (ward). Compaq wanted to dominate nearly every aspect of the computer industry, but its M&A (Merger and Acquisitions) activity seemed to distract company executives from the very successful business of selling PCs to corporations (Chancellor, 2015). Leadership teams must more effectively align their strategies with their shifting environments (Chancellor, 2015).
Speaking about technology, almost every house today around the world has at least one Apple item (iPhone (internet phone), MacBook (Macintosh book), iPad (internet pad), etc.). Why Apple could make it even though in the technology market there are many big competitors? Knowing that Apple is considered expensive compared to others. Although the Apple II was still selling, Apple as a company was in trouble when the 80s began (Beattie, 2018). Apple attempted updates like the Apple III and the Apple Lisa, but these failed to catch on commercially (Beattie, 2018). When Jobs overthrew Amelio and took the reins of Apple once more in 1997, the hardware had caught up to his vision for all things digital (Beattie, 2018). He launched the iMac (internet Macintosh) with a strong marketing campaign featuring the “Think Different” slogan (Beattie, 2018). Jobs, as a new CEO (Chief Executive Officer) was able to manage the problem and make people want Apple’s products through marketing, appealing designs, and user-friendly systems, otherwise, Apple could have been now from the past.
Away from big companies and using dimensional strategies, in general, the problems that face most SMEs globally apply in Canada too. This comes from the fact that there are many subtle and more obvious differences between SMEs and larger corporations. SMEs are smaller organizations and therefore differ from larger corporate entities in many ways such as the difference in number of employees and access to resources. These differences are typically seen in their structure, with SMEs often presenting a more fluid and flattened structure compared to larger organizations. SMEs also tend to have access to fewer resources, including money. In addition, SMEs tent to be more flexible with an ability to make decisions more quickly than their counterparts. This goes back to their often less hierarchal structures. They also tend to have smaller teams that are more engaged in the work and have a better ability to communicate both within and between team units. On top of this, SMEs tend to engage in a more project-oriented structure than many larger organizations, making them a good target for project and portfolio management frameworks. Innoframe has been designed based on the size and scale of the environment seen in SMEs.
Many small businesses believe that applying management strategies need more resources which in most times they can’t afford on human and financial level, also they can’t support researches to find better strategies through researches to know their direction. However, there are several opportunities that can higher their performance through competition and benchmarking, if not between other companies, it can be internally by comparing their products or techniques to the standard of cost, time, and quality. Technological planning and ERP (Enterprise Resource Planning) tools, used by large companies, can apply to a certain level on SMEs too to benefit them.
As of December 2015, there were 1.17 million employer businesses in Canada, of these, 1.14 million (97.9%) businesses were small businesses, 21,415 (1.8%) were medium-sized businesses and 2,933 (0.3%) were large enterprises (Government of Canada, 2015). The construction industry accounts for 7% of GDP (Gross Domestic Product) when considering its impacts on all economic sectors, and it maintains and repairs nearly $2.3 trillion in assets (build force). Since 2010, Canada’s annual GDP growth has average 2.5% for all industries and 2.8% for the construction industry (build force). Construction employment growth tracked overall employment growth in 2017, growing by 1.8% (build force). This shows that SMEs contribute to the Canadian economy way more than large enterprises. Also, the building industry shows a growth in the annual GDP.
As innovation, portfolio management is considered new in project management and cover it. They are both equally important tools for achieving strategic business goals, and along with a variety of other implements and techniques, must be employed properly within an organization if said organization wishes to fully realize their potential (Igartua et al., 2010). Globalization forces to understand it more because of great competition between other countries which relatively have better prices with competitive quality, thus urging the SMEs to enhance their technologies on the long term to stay on the market. However, there are many difficulties, some of which are:
1. Not knowing the projects dimensions therefore not grouping them in the right portfolio;
2. Inadequate budget for the projects;
3. Inability to recognize the risks early;
4. Improper understanding from employees of the whole process.
Although portfolio management is part of innovation management, innovation is also a part of portfolio management that plays a big role in finding the future and making it brighter. Therefore, those challenges can be solved through:
1. Realizing capabilities and potentials to invest them to the maximum;
2. Preparing documents for risks to avoid maximum problems in the future;
3. Creating a platform and dialogue to come up with closer opinions.
Portfolio management can come into play for SMEs who are stuck in the single-lensed view of innovation as a tool solely usable for product development and improving technologies. This is due to the fact that it can help to organize ideas and innovative project options to ensure that the best overall grouping of initiatives can be implemented by an organization. In this way, upper management, or company owners more often for SMEs, can pick and choose a grouping of options where each project or initiative satisfies a different aspect of innovation.
From a specific technological standpoint, innovation can be defined as new ideas that lead to the design and manufacturing of creative products or processes (Mcadam, Keogh, Reid, & Mitchell, 2007). This can be compared to the broader perspective on innovation which defines it as a complex and dynamic progression whereby people and process issues are systematically incorporated into a theoretical conception (Mcadam et al., 2007). This broader view of innovation incorporates the more specific technological definition into it as well (Mcadam et al., 2007).
Innovation was never a tool for one company or another. It has been always a dynamic tool to grow more success when used right. One thing that makes the organization of innovation projects even more important is the fact that innovation is often not a task isolated to a particular organization (Mavroeidis & Tarnawska, 2016). Firms may collaborate with numerous institutions in an attempt to realize their innovation initiatives (Mavroeidis & Tarnawska, 2016). SMEs can partner with Universities, research and academic institutions, or other companies who will perform some or all of the research and development of innovation solutions for them. By collaborating with others, they can save both time and employees in order to focus on keeping the day to day functions of their business intact.
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