Project Prioritization

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    Could I receive some feedbacks on if any other organization is facing project prioritization problems.  Our organization is consist 50 individual departments under three business units.  The problem occurs every month when we are faced with prioritizing projects as one business unit as each business units are jockeying to get their project to be prioritized as the number one priority.  Are there project prioritization programs out there?  How do other organizations handle this issue?  Thank you for feedback.


    Tomas Lee

    My take on the project prioritization process¡Ü Financial Benefits- This will vary depending on the size of the company. However, BB/GB projects should be relative to the Net Income. Calculate the Return on Investment(ROI) or Internal Rate of Return(IRR)- Savings vs Revenue Growth: Depends on the company goals.- Cost Savings vs Cost Avoidance: You can always stop spending across the board, but difficult to find cost savings.- Break Even time: Anything more than 1.5 years should be reconsidered since you will be tracking the financial benefits for 1 to 2 years. IF you add up the project time and control/monitoring time you might be looking at 2 to 3 years. Don’t know about your business, but in financial services that I know, business strategic goals change after 3 years.¡Ü Project Scope- BB vs GB: You will want cross functional process projects to be BB and Vertical process to be GB projects. Vertical projects usually does not include IT department, but they should. Since most of the projects become IT bound, it helps to have them on board from the beginning. There should be few BB and lots of GB projects. Otherwise put GB projects under one umbrella of BB and work with many GBs to manage the sub-processes. If there are too many BB projects and not enough GB projects, there could be stability impact to the business as a whole.
    Hope this helps.



    There are several methods you might consider depending on your type of business.
    A lot of companies will build a matrix listing 5 to 10 points of value they feel will bring value.   A lot of models focus solely on ROI or NPV calculations.  This is typically not the best single measure.
    Most if not all projects should be attributed to the strategic long and short term goals of the company.
    You may consider creating a list of value items and scoring them and then apply a % of value and calculate a weighted score and sum the result. 
    Provide a scale to your scoring 1 to 3 little value, 4 to 7 some value, 8 to 10 large value.
    1. Supports Customer Need Tied  – 6 Wgt = 25
    2.  Aligns with long term goals – 4 – Wgt  = 20
    3.  Economic Viability – 7 – Wgt = 15%
    4.  Supports regulatory Need – 3 – Wgt = 10%
    5.  Duration of Project – 8 – Wgt. = 10%
    6.  New Innovative Product – 2 – Wgt. = 10%
    7.  Supports CORE compentencies – 8 – Wtg. = 10%
    This is only an example,  but by creating a score you can quickly assess the value the project has.
    Remember Little’s Law regarding Work In Progress/Projects in Process and limited resources.
    Number of Projects / average time to complete = Lead Time. 
    Most organizations underestimate the time to complete and the number of resources required to implement a project.  Without a sound means to prioritize projects you are never certain that the projects you are working on are the ones that will sustain the long term viability of your company.
    In the end most companies should find it hard if not impossible to complete 3 to five large projects a year depending on available resources.  Good managers make tough decisions regarding where effort will be spent.  If you are having problems with run away project lists, chances are, your upper management is either a distant group of spectators or woefully inept in their ability to focus and manage resources or perhaps both.  If so, it would do them good to attend one or a few TQM classes or seminars.
    I hope this helps.

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