System dynamics application in analyzing the schedule risk influence on project portfolio

Due to the interaction between multiple projects and programs, the project portfolio can be regarded as a complicated system. Schedule risk of individual projects will be delivered to the inner portfolio according to this internal relationship of project portfolio. Relative project portfolio managers will take some necessary measures in order to control or shrink the scope of risk influence. However, these measures are often at the expense of squeezing resources, cost increased, or even a substantial change which will result in deviation from the strategic objectives and decreasing portfolio effectiveness. System dynamics approach with its characteristics about analyzing complex causality, the dynamic effect between the elements, as well as handling long-term and cyclical problem, outweighs the traditional methods and technology of risk identification, analysis or control. It is discussed in this paper about the dynamic effect of schedule risk on the project portfolio, established system dynamics model by Stella9.0.3 on inner factor fluctuation of the project portfolio under schedule risk influence, and proposed relatively appropriate risk management strategies and measures when some individual projects confronted with schedule risk.