There are so many project ideas floating around in organizations. It can be difficult to sort out which projects are the right ones to add to portfolios. Choosing the right projects or programs that will yield the highest returns requires a process of project selection and prioritization. Organizations cannot afford to deliver the wrong projects on-time and within budget in today’s competitive market.
Project Selection
Project selection is a process in which organizations evaluate which projects most strategically align with their objectives and determine which would perform best.
Prioritizing projects starts with scoring projects based upon various criteria to determine their strategic priority. Ranking or scoring factors likely change from organization to organization, but common scoring factors include:
- Profitability ROI
- Payback periods
- Benefits realized
- Strategic alignment / contribution to achieving strategic objectives
- Availability of resources (equipment, capital, skills/knowledge)
According to PMI’s 2017 report, 37% of project failures resulted from a lack of clearly defined objectives and milestones to measure progress, so it is critical for organizations to take project selection and prioritization seriously.
Project Prioritization Process
The project prioritization process consists of:
- Defining organization’s strategic values and objectives
- Scoring the criteria that will be used to rank the projects
- Weighing the projects based upon determined criteria
- Scoring and evaluating the projects using a weighted sum model
To do this, it is crucial to have general knowledge about each of the projects. Organizations will, at minimum, need to know the following project information:
- Estimate of the cost required to deliver each project
- Estimate of the resources required to deliver each project
- Estimate of the risk involved in each project
- Change impact of each project
Choosing which projects to precede with means calculating their scores and determining which will deliver the most impact. It also means maximizing performance based upon the resources available after carefully analyzing each criteria involved in the score.
PRISM Portfolio
Project prioritization is not just a first step– while it acts as a point for decision-making for which projects to execute, it is important that it is an ongoing process. Project scores need to be reviewed and updated throughout project development and at designated stage gates.
Organizations are able to track projects through their entire lifecycle– from ideation to close-out within ARES PRISM. With the PRISM Portfolio module, effective project organizations can direct their attention and resources to the best projects and reject those that do not align with strategic objectives. Organizations can set project stages like front-end loading, conceptual engineering, feasibility study, detail design, etc. Download the PRISM Portfolio datasheet to learn more.