When every project is a priority and budgets are squeezed, how do you prioritise your projects? We round up some of the things to consider so your decision is less of a gamble.
1. All Aboard: Since projects are essentially about people, consult all involved and establish which projects are supported by stakeholders, sponsors and so on to get everyone on side to meet and manage expectations.
2. Like for Like: Ensure project proposals include common data and come in standard format to be measured against common criteria to facilitate like-for-like comparisons.
3. Big Picture: Prioritising projects by finding the one that most closely meets company strategic objectives might seem like a good bet, but you need to take into account the subjective nature of human judgements. You and your colleagues may think you use a fool-proof decision-making system but you may unconsciously be inconsistent in the way you assess project alignment. Bear in mind too, that projects that seem to fit in well with a company’s vision and strategy may also involve the greatest risk or cost and that these will need to be taken into account.
4. Show me the Money: Picking the project that promises the highest or quickest return on investment (ROI) may also feel like a safe choice. Indeed, a quick return might well appear to be preferable to a high return as risks rise while you wait for a project to deliver. It is worth remembering though, that ROI is only an estimate and that it gives a narrow picture. Costs and benefits need to be analysed with regard to stakeholders, sponsors and so forth, keeping in mind that they can be indirect or intangible and not forgetting that they can fluctuate.
Resources: Remember too that factors such as time scale as well as resource requirements and capabilities need to be considered in the round. Thus the most profitable project may be so resource-hungry that other projects fold, equally, it may be that the resource-heavy project complements more completely company strategy than other proposals. Circumstances will dictate your choice and that choice could be to select a project or projects that alone or together offer the highest value using available resources.
5. Playing Safe: There is no doubting the attraction of picking the project with the least perceived risk but there might be a doubt about the wisdom of relying on that alone. Project risk levels may fluctuate during the project lifecycle as a result of internal or external factors; furthermore a risky project may in fact offer the greatest ROI or customer satisfaction or even organisational benefit.
6. Paying the Price: Opportunity comes at a cost and you may need to manage the consequences of your decision to put off certain projects. As a result, you may look for an occasion to mitigate the impact of your selection by, for instance, re-allocating to held projects resources no longer needed by the top-priority project.
Several heads are better than one: Decision by committee may sound like the stuff of nightmares but a senior executive team can set decision parameters and improve the chances of projects being selected on consistent goals and it will, of course, take on the responsibility.
7. Decision time: Determining which project or projects to select can be based on a range of methods from the balanced scorecard to net present value to cost/benefit analysis. A key philosophy of the approaches championed by the Office of Government Commerce is the Business Case, which can be used to determine if programmes and projects will bring the right change for the business. It ensures that the value of projects is understood and that one project can be compared fairly with others. A business case would typically contain information such as the purpose of the project, the options and the benefits. It cannot guarantee success, of course, but it can help make the project selection process less like playing roulette.
- Download a PRINCE2 business case template.
- A handy route map for any organisation wanting to adopt PRINCE2: PRINCE2 for Real.
- Get your own copy of Managing Successful Projects with PRINCE2 Manual.
- PRINCE2’s value can be seen in the results of a major worldwide research project that was carried out by the Queensland University of Technology in Australia and sponsored by APMG, OGC and TSO.