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Project Screening and Selection
How Can You Get to a Backlog of over 100 Projects?
• “There are never enough resources to get everything done.”• Backlogs build over time. Holy cow projects get included in• the selection system. Projects proposed from people who• have left the airline still reside in the project portfolio. Non
value-• added projects somehow make their way into the project• portfolio. Soon the queue gets longer. With everyone in IT• working on too many projects concurrently, project completion• and productivity are slow.
Which Projects Remain?
• To cut the number of projects, the steering committee used a weighting scheme that reflected the airline’s priorities, which• were:• fly safe,• generate revenue,• reduce costs, • and customer service.• The weighting scheme easily weeded out the fluff.• S N A P S H O T F R O M P R A C T I C E Crisis IT• Coady noted that “by the time you get to the 20s the margin of• differentiation gets narrower and narrower.” Of the remaining• projects, project sponsors had to have solid justification why• their project is important. Reduction of the number of projects• places emphasis on high value projects.
• What Advice Does Coady Have for Crisis Management?• In times of crisis, it is easier to take bold steps to make• changes. But you need to have a clear vision of what you• should be focusing on with the resources available. Coady• suggests, “It comes back to really having a good idea of
what• the initial business case for a project is and what
resources it• is consuming, both people and otherwise.”
Project Screening Matrix parameters
• Stay within core competence 2• Strategic Fit 3• Urgency 2 • 25% sales from new project 2.5• Reduce defects to less than 1% 1.0• Improve customer’s Loyalty 1.0• ROI of 18% plus 3.0• Return on Investment = (Gain from Investment- Cost of Investment) / Cost of Investment
This 83 see in
its relative importance to the organization’s objectives and strategic plan
relative contribution/value added to the selected criteria. Values of 0 to a high of 10 are assigned to each criterion for each
project
If the resources available create a cutoff threshold of
50 points
In rare cases where resources are severely
limited and project proposals are similar in weighted rank, it is prudent to pick
the project placing less demand on resources.
Weighted multiple criteria models
similar to this one are rapidly becoming the dominant choice for prioritizing
projects.
strategic breakthrough versus operational.
Criteria differences among different types of projects
• Regardless of criteria differences among different types of projects, the most important
criterion for selection is the project’s fit to the organization strategy.
• criterion should be consistent across all types of projects and carry a high priority relative
to other criteria.
• This uniformity across all priority models used can keep departments from sub optimizing
the use of organization resources.
• Factors such as researching new technology, public image, ethical position, protection of
the environment, core competencies, and strategic fit might be important criteria for
selecting projects.
• Weighted scoring criteria seem the best alternative to meet this need.
Financial was a big criteria in Selecting a Model in past
• In the past, financial criteria were used almost to the exclusion of other criteria.
However, in the last two decades we have witnessed a dramatic shift to include
multiple criteria in project selection.
• Senior management is interested in identifying the potential mix of projects that
will yield the best use of human and capital resources to maximize return on
investment in the long run
• profitability alone is simply not an adequate measure of contribution; however,
it is still an important criterion, especially for projects that enhance revenue and
market share such as break through R&D projects
Weighted Scoring Criteria WSC• Seems the best alternative to in selection of the projects.
• The Projects speaks what are the strategic Goals of the Organ.
• WSC published in the organization, shows every body credibility attached in the selection of
projects. • WSC shows to the people reduce the wasteful using of projects resources. Politics , “sacred
cow” projects are exposed. Project goals unambiguous identified and communicated using the
selection criteria as validation.
• WSC approach helps PMs understand how their project was selected, how their project
contributes to organization goals, and how it compares with other projects.
• WSC Project selection important decisions guiding the future success of an organization.
• Criteria for project selection are the area where the power of your portfolio starts to manifest
itself.
• New projects are aligned with the strategic goals of the organization. With a clear method for
selecting projects in place, project proposals can be solicited.
Responsibility for Prioritizing• Prioritizing projects is a major responsibility for
senior management.• Prioritizing means discipline, accountability,
responsibility, constraints, reduced flexibility, and loss of power.
• i-e Management will have to rank and weigh, in concrete terms, the objectives and strategies they believe to be most critical to the organization.
• Figure 2.6 is a partial example of an evaluation form used by a large company to prioritize and select new projects. The form distinguishes between must and want objectives.
Project Proposal Form• What business problem this project solve?• How does this project align with our organization
strategy?• What are the major deliverables of the Project?• What is the impact of not doing this project?• How will we measure success?• Will this project require internal resources available?• What is the estimated cost of the Project?• How long will this Project take?• Oversight action accept or Return
Sources and Solicitation of Project Proposals
• Many organizations restrict proposals from specific levels or groups within the organization
• This could be an opportunity lost. Good ideas are not limited to certain types or classes of organization stakeholders.
• Fig 2.4A provides an example of a proposal form for an automatic vehicular tracking (Automatic Vehicle Location) public transportation project
• Figure 2.4B presents a preliminary risk analysis for a 500-acre wind farm
(Request for Proposal) RFP
• In some cases organizations will solicit ideas for projects when the knowledge requirements for the project are not available in the organization. Typically, the organization will issue an RFP (Request for Proposal) to contractors/vendors with adequate experience to implement the project
quick insight of a project’s inherent risks
• automatic vehicular tracking (Automatic Vehicle Location) public transportation project
• preliminary risk analysis for a 500-acre wind farm
Fig 2.4 A
2.4 A
Fig 24B
Ranking Proposals and Selection of Projects
• Figure 2.5 shows a flow chart of a screening process beginning with the creation of an idea for a project.
• Data and information are collected to assess the value of the proposed project to the organization and for future backup. If the sponsor decides to pursue the project on the basis of the collected data, it is forwarded to the project priority team (or the project office)
• Note that the sponsor knows which criteria will be used to accept or reject the project.
• If a project does not meet designated “must” objectives, it is not considered and removed from consideration. Organization (or division) objectives have been ranked and weighted by their relative importance—for example,
• “Improve external customer service” carries a relative weight of 83 when compared to other want objectives. The want objectives are directly linked to objectives found in the strategic plan.
Impact definitions• A numeric scheme is created and anchored by
defining criteria. • To illustrate how this works, let’s examine the $5
million in new sales objective.
• A “0” is < $100,000,• A “1” is >$100,000 but < $500,000,• A “2” is > $500,000.• These impact assessments are combined with the
relative importance of each objective to determine the predicted overall contribution of a project to strategic objectives.
• These impact assessments are combined with the relative importance of each objective to determine the predicted overall contribution of a project to strategic objectives
• For example, project 26 creates an opportunity to fix field problems, has no effect on sales, and will have major impact on customer service. On these three objectives, project 26 would receive a score of 265 [99+ 0 + (2x 83)]. Individual weighted scores are totaled for each project and are used to prioritize projects.
FIGURE 2.6Priority Analysis