Information Technology Project Portfolio Implementation Process Optimization Based on Complex Network Theory and Entropy

Abstract

In traditional information technology project portfolio management (ITPPM), managers often pay more attention to the optimization of portfolio selection in the initial stage. In fact, during the portfolio implementation process, there are still issues to be optimized. Organizing cooperation will enhance the efficiency, although it brings more immediate risk due to the complex variety of links between projects. In order to balance the efficiency and risk, an optimization method is presented based on the complex network theory and entropy, which will assist portfolio managers in recognizing the structure of the portfolio and determine the cooperation range. Firstly, a complex network model for an IT project portfolio is constructed, in which the project is simulated as an artificial life agent. At the same time, the portfolio is viewed as a small scale of society. Following this, social network analysis is used to detect and divide communities in order to estimate the roles of projects between different portfolios. Based on these, the efficiency and the risk are measured using entropy and are balanced through searching for adequate hierarchy community divisions. Thus, the activities of cooperation in organizations, risk management, and so on—which are usually viewed as an important art—can be discussed and conducted based on quantity calculations.

Keywords

• project portfolio management (PPM)
• complex network theory
• social network analysis
• information theory
• entropy
• cooperation efficiency
• risk control
• efficiency–risk balance