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on Project, Program and Portfolio Management |
| By: | Anne Rainville (Management Consultant, Vtrek BV, The Netherlands and Research Fellow, Maastricht School of Management, the Netherlands); Ramona Apostol (Senior Legal Advisor, Corvers Procurement Services, the Netherlands and Research Fellow, Maastricht School of Management, the Netherlands) |
| Abstract: | Since 2000, the European Union (EU) has promoted innovation procurement to improve public services while supporting economic growth. Despite these potential benefits, it has become evident that procurers are not participating in innovation procurement to the extent expected – both for pre-commercial procurement (PCP), and the public procurement of innovative solutions (PPI). Key barriers are a lack of incentive and a high risk-aversion on behalf of procurers. In this paper, we introduce a business case methodology for innovation procurement that can help to overcome these barriers by capturing project value and providing justification for project approval. We describe how to construct a business case for PCP or PPI across six steps: 1) needs identification and assessment; 2) prior art analysis and intellectual property rights (IPR) search; 3) analysis of the standards’ landscape; 4) preliminary estimates; 5) open market consultation; and 6) detailed economic calculations. Using case studies from Transport for London and the Lombardy Region of Italy, we apply elements of this methodology to show how it can be applied in practice. The methodology can be directly applied by public procurement practitioners during the preparatory phase, and provides valuable insight for policy makers into decision parameters for innovation procurement. Through multidisciplinary research, it furthers academic discussion of technical and economic evaluation of demand-side mechanisms. Further elaboration of the business case methodology is required for its extension to tender design and project management, as is investigation into its congruence with the new innovation partnership mechanism introduced in 2014. |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:msm:wpaper:2017/2&r=ppm |
| By: | Ruben Juarez (Department of Economics, University of Hawaii); Kohei Nitta (Department of Economics, Toyo University) |
| Abstract: | Agents are endowed with time that is invested in different projects that generate profit depending on the allocation of time by the agents. A mechanism divides the profit generated by the projects among agents depending on the allocation of time as well as the amount of profit that every project generates. We study mechanisms that incentivize agents to contribute their time to the level that generates the maximal aggregate profit at the Nash equilibrium regardless of the production functions (efficiency). Our main result is the characterization of all the mechanisms that satisfy efficiency. Furthermore, within this class, a narrow class of mechanisms are monotone in the payoffs of the agents with respect to the addition of agents, time or projects. |
| Keywords: | Profit-sharing, Efficiency, Implementation. |
| JEL: | C72 D44 D71 D82 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201702&r=ppm |
| By: | Hottenrott, Hanna; Demeulemeester, Sarah |
| Abstract: | Information asymmetry and outcome uncertainty increase the cost of debt for R&D. This study shows that recipients of public R&D grants face lower costs of debt. Immediate effects suggest that quality certification explains this observation. For younger ventures certification is accompanied by liquidity effects. Short-term effects stem from grants for research. In addition, longer-term liquidity effects point to grants facilitating young firms’ investments in R&D that advance project maturity. |
| JEL: | O31 O38 L26 G30 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168093&r=ppm |
| By: | Stefan Creemers |
| Abstract: | We study projects with activities that have stochastic durations that are modeled using phase-type distributions. Intermediate cash flows are incurred during the execution of the project. Upon completion of all project activities a payoff is obtained. Because activity durations are stochastic, activity starting times cannot be defined at the start of the project. Instead, we have to rely on a policy to schedule activities during the execution of the project. The optimal policy schedules activities such that the expected net present value of the project is maximized. We determine the optimal policy using a new continuous-time Markov chain and a backward stochastic dynamic program. Although the new continuous-time Markov chain allows to drastically reduce memory requirements (when compared to existing methods), it also allows activities to be preempted; an assumption that is not always desirable. We demonstrate, however, that it is globally optimal not to preempt activities if certain conditions are met. A computational experiment confirms this finding. The computational experiment also shows that we significantly outperform current state-of-the-art procedures. On average, we improve computational efficiency by a factor of 600, and reduce memory requirements by a factor of 321. |
| Keywords: | Project Scheduling, Project Management, NPV maximization, SNPV, Stochastic activity durations |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ete:kbiper:592798&r=ppm |
| By: | Brown, David P. (University of Alberta, Department of Economics); Sappington, David E. M. (University of Florida, Department of Economics) |
| Abstract: | We analyze the regulatory procurement of electricity infrastructure that can take the form of either a traditional core investment or non-traditional distributed energy resources (DERs). We identify conditions under which a regulated utility will engage in self-sabotage (i.e., intentionally increase its own costs) in order to elicit more favorable procurement terms. We also demonstrate how the implementation of standard policies (e.g., cost reimbursement or a simple cost-sharing plan) or the adoption of a traditional core project rather than a potentially less-costly DER project can reduce procurement costs by deterring self-sabotage. |
| Keywords: | self-sabotage; distributed energy resources; regulation; procurement |
| JEL: | L51 L94 Q28 Q40 |
| Date: | 2017–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2017_011&r=ppm |
| By: | Maria Cesira Urzi Brancati (European Commission - JRC); Csaba Kucsera (National University of Public Service, Hungary); Gianluca Misuraca (European Commission - JRC) |
| Abstract: | This issue of JRC Insights presents results from the analysis of initiatives and case studies on ICT-enabled social innovations promoting social investment in the field of Active and Healthy Ageing (AHA) conducted as part of the JRC-led IESI research, in collaboration with DG Employment, Social Affairs and Inclusion. It highlights how over 70% of the initiatives in the field of AHA promote social investment by supporting the modernisation of social protection systems as well as by supporting investment in people throughout their lives. It also reveals that AHA initiatives are frequently characterised by radical innovation potential and higher integration at the service level, often combining funding, administrative and service delivery systems. Finally, the article illustrates how ICTs drive the organizational transformation of service delivery, by reducing overlaps and strengthening integration among service providers. In addition, they increase efficiency and reduce costs by improve targeting and personalisation of services. |
| Keywords: | active and healthy ageing, long-term care, social care, ICT-enabled social innovation |
| JEL: | I10 L31 L32 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc107828&r=ppm |