A Study on Dynamic Project Portfolio Configuration Considering Resource Constraints in Small Software Development Firms
Academic Society of Global Business Administration, Ji Ho Song, Seung Hyun Kim, Tae ho Ahn · Global Business Administration Review · 2025
This study aims to propose a strategic framework to enhance the competitiveness of small software development firms facing financial and Research & Development (R&D) workforce constraints, through dynamic project portfolio optimization. To achieve this, the study analyzes the causal loop between cash flow and human resource allocation, and suggests optimal resource distribution strategies between contracted and new product development (NPD) projects to maximize corporate profitability. A mathematical model-based simulation was developed to examine the impact of human resource allocation strategies in various project portfolio environments. The simulation incorporates resource constraints, feasibility, profitability, and risk factors into policy design. For NPD projects in particular, dynamic management techniques such as idle resource utilization, project suspension, and restart options were applied. The simulation results indicate that prioritizing contracted projects significantly improves cash flow stability and corporate survival rates. In contrast, prioritizing NPD projects increases the risk of capital depletion. Additionally, strategies that utilize idle personnel in internal projects were shown to positively impact profit. The study also confirms that R&D hiring and downsizing policies have a critical influence on long-term profitability and sustainable growth. Overall, this study offers practical strategic insights for small software firms to overcome resource limitations and establish effective project portfolio strategies. It also demonstrates the applicability of dynamic resource management and decision-making models in real-world business environments.