Many researchers assess the tools and techniques to optimize the project portfolio management. Most of those tools treat each project within a portfolio as an independent entity. Starting in 2010 onwards, many researchers considered the importance of Project Interdependencies (PI) in defining the Project Portfolio (PP); however, those researchers treated PI as a static condition. Organization strategy has dynamic characteristics caused by internal dynamics as well as external forces. Since the PP is a bridge between organization strategy and the program/project, the PP has to have a dynamic ability, in order to support the organizational strategy dynamics. This research applies an interactive approach using System Dynamics (SD) modelling to represent the PI dynamics as well as a project selection tool/technique within a project portfolio. A case study was conducted with the Bandung Urban Waterworks (PDAM Tirtawening). The outcomes of this research suggest that the model developed by the SD approach is: 1) one of the tools and techniques is to specify the PI dynamics; 2) to determine project priority in order to optimize the project portfolio. SD approach has the ability to challenge an organization's perception of their project portfolio interdependencies and to enhance strategic decision making capabilities. PI on this research is driven by project outcomes. PI that driven by other reasons, such as by market, resources, knowledge, etc., should be leveraged more, to figure out a complete picture of the PI importance within Project Portfolio Management (PPM).

In most developing countries, the growth of urban public service infrastructure strives to keep up with population growth. Residential Water Use (RWU) in over half of total municipal water consumption in most urban areas in developed countries face similar challenges. For example, consider the Municipality Water Supply Utility (Perusahaan Daerah Air Minum/PDAM) Tirtawening, Bandung; in the last 10 years, the average urban water coverage services have grown at a rate of 0.65%, while the Bandung municipal population growth rate is 1.42% per year. PDAM select and prioritizes their project portfolio based on Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis as well as on its resources availability. A significant body of research exists which assesses the tools and techniques to optimize a project portfolio. Project Management Body of Knowledge (PMBOK) 5 th edition mentions that project interdependencies is a tool to determine and select the project from the Project Portfolio (PP). Most research conducted treated project interdependencies (PI) as a static variable, defined in earlier stage of the PP lifecycle. Apart from that, the importance of a dynamic PI model that is developed using the System Dynamics (SD) approach is not yet recognized as a tool and technique for project portfolio selection The outcomes of this research suggest that the project interdependencies model developed through the SD approach can be one of the available tools and techniques used to assess project interdependencies and determine project priority in order to optimize the project portfolio.

Indonesia public construction state owned enterprise (SOE) is Construction Company that owned by the government of Indonesia by 51% or more. Currently there are 4 Indonesia state owned public construction company. These companies' performance in 2018 are measured by adapting and modifying Malcolm Baldrige Criteria for Performance Excellence (MBCfPE) and putting 2 companies as industry leader, 1 as emerging industry leader, and another as good performance. One of the main reasons for low company performance is poor planning. Project portfolio management (PPM) can increase the planning quality and followed by increasing company performance. The purpose of this study is to analyze the critical success factors for PPM to increase company performance through workforce management with Indonesia public construction SOE as object. The result of this study can lead Indonesia public construction SOE to apply PPM in a better way and increasing the company performance to become industry leader.

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