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Operations Human Resources Applying Criteria-Based Matrix to Prioritize IT Projects

Applying Criteria-Based Matrix to Prioritize IT Projects

One of the common challenges for a company’s information technology (IT) department is how to prioritize IT projects that can deliver the greatest benefits to the business. A criteria-based matrix can be an effective tool in prioritizing the IT projects with just such results. The matrix is a vast improvement over allowing priorities to be set by the biases of certain stakeholders who insist that some projects are more critical than others without any evidence to support their claims.

An eight-step approach to building a criteria-based matrix provides a workable prioritizing system.

Step 1: Identify all key IT project stakeholders, e.g., business managers, IT project managers, business sponsors, etc.

Step 2: Organize a workshop to build the criteria-based matrix and use it to set priorities. Participants will be all the stakeholders identified in Step 1.

Step 3: Outline the projects that need to be evaluated for prioritization, using the knowledge and expertise of the workshop participants.

Step 4: With the involvement of all the participants, identify the criteria that can be used to judge the projects. The approach to identifying criteria may include:

  • Identifying practical constraints (e.g., How easy is it to do?).
  • Considering the benefits, costs and risks.

Aim for criteria that can be measured objectively and easily, rather than subjectively or with difficulty. The criteria shown in the table below are examples. Organizations or project teams should identify their own criteria.

Criteria-Based Matrix for Prioritizing IT Projects

Criteria

Scoring

Project 1

Project 2

Project 3

Project 4

Competitive Advantage Rating


Weighting


Score

4


5


20

5


5


25

4


5


20

3


5


15

Customer Satisfaction Rating


Weighting


Score

2


5


10

2


5


10

3


5


15

5


5


25

Estimated Project Cost Rating


Weighting


Score

3


3


9

4


3


12

3


3


9

5


3


15

Potential Revenue Rating


Weighting


Score

3


3


9

3


3


9

4


3


12

3


3


9

Ease of Implementing Rating


Weighting


Score

3


4


12

4


4


16

4


4


10

2


4


8

Total Score

60

65

73

72

Step 5: Allocate a weighting number to each criterion on a scale of 1 to 5, with 1 being least important and 5 being most important to the operation of the business.

Step 6: On a similar scale of 1 to 5, rate each project on its impact on each criterion identified in Step 5, with 1 being the least positive impact and 5 being the most positive impact on that particular criterion.

Step 7: Multiply each rating from Step 6 by the weighting number allocated to each criterion in Step 5 to get the score for each project for each criterion.

Step 8: The matrix is complete when all the weighted scores from Step 7 are added up for each project. The matrix clearly shows which projects have the highest scores, and thus which ones should be the top priority projects.

Conclusion: From the sample criteria-based matrix, it is clear that Projects 3 and 4 need to be done sooner than Projects 1 and 2. The matrix has improved management of IT projects by prioritizing them against identified criteria. The company’s IT department can use this tool to prioritize projects with highest customer and business impact and can then assign appropriate resources to complete these projects within an acceptable time frame.

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Comments

Prasanna Hatti 17-06-2013, 21:13

Hi Ankur,

Two comments. The preferred direction of criteria is an important point. In your example, all the criterias preferred to be maximized except estimated project cost which needs to be minimized. To elaborate, if my project cost is very high compared to other projects, the risk of high cost project being chosen is high because of high total score. This is incorrect. The criterias should be rewritten in such a way that all of them point towards the same direction. Else, this tool will be ineffective.

Also, the rating can be 1, 3 and 9 ( to indicate Low, Medium and High) instead of ratings between 1 to 5. This will increase the difference in the total score and avoid close competition among the candidate projects/solutions.

Thanks,
Prasanna Hatti

Reply
sandi 04-04-2014, 06:38

how come you are adding up the estimated project cost and have that criteria positively impact the score? I thought cost is what you need to reduce?

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