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One of the great difficulties for organizations is the large number of competing projects in their portfolios. Budget and resources are limited, and this situation can lead to conflicts between competing projects, compromising the organization's strategy. Proper project selection and prioritization is one of the key points to ensure maximum return on investment for the organization (Archer and Ghasemzadeh, 1999; Cooper and Edgett, 2009). Although there are organizations that only use financial indicators to select projects, such as ROI, VAL or Payback.
Organizations that rely solely on these financial methods have worse portfolio performance (Cooper and Edgett, 2009). Projects represent important challenges for organizations and ensure that projects are aligned with strategy is one of the key factors for the success of organizations (Cooper, 2008; Petro and Gardiner, 2015).
There are no ideal approaches to project selection, however, portfolio management should promote the best possible results from a correct selection of projects (Cooper and Edgett, 2009). The present case study was carried out within the framework of the Portuguese Armed Forces (PAF), more specifically the Portuguese Navy.
The focus is the construction of a portfolio of projects as PAF's main investment instrument. Like other economic sectors, selecting and prioritizing projects is equally vital to the success of the organization. The selection and prioritization of projects aim to build and sustain the pool of forces and resources required for PAF missions, and this task is of utmost importance to the organization and to the country.
After an analysis of the advantages and disadvantages of the PAF, projects are identified that aim to eliminate the deficiencies found, which will have a diverse impact on the accomplishment of the PAF missions and, consequently, on the contribution of the PAF to the national defence policy.
The prioritization of these projects is determined at an early stage through a multicriteria analysis, particularly considering the results of the risk assessment of each of the identified gaps. Subsequently, a cost-benefit and sensitivity analysis are performed, which considers a set of constraints imposed at the level of available resources, mainly financial resources.
The objectives of the study are to identify the theoretical models established in the academic literature and to validate the PAF pilot model, supported by theoretical models, considering the specificity of the military context.