VOICES In the Trenches
Prioritizing projects is straightforward when it comes down to ROI. Here’s how to
do it objectively when the budget’s unclear.
By Ibrahim Dani, PMP
AT ONE ORGANIZATION I WORKED WITH, we
were doing quite well in identifying potential projects, scoping them, and defining how these projects
would be completed and what they would accomplish. What we lacked was an objective mechanism
to rank these projects—especially when decision-makers were faced with shrewd sponsors pushing
projects that might not necessarily warrant approval.
While projects in many companies are priori-tized based on a cost-benefit analysis—particularly
when there’s a lack of a better framework—this
approach wasn’t practiced at this organization.
More Money, More Problems
For one thing, there was no comprehensive mechanism to measure the cost and benefits of project
attributes and intended outcomes. Back then, a
central projects group would authorize projects
based on submissions by the project sponsor. And
although the submissions included draft budgets,
such budgets accounted for external costs only.
Neither internal labor nor resourcing costs were
included. Moreover, projects were funded from
an organization-wide projects pool rather than
the business units’ annual budgets, meaning that
few were rejected for lack of funds. If the sponsor
could convince the central projects group that he
or she needed this project, the custodians of the
projects pool would finance it.
This increased the need for a project prioritization framework that didn’t include monetary
figures and, at the same time, one that could
“objectify” subjective ratings obtained from different teams. Moreover, the framework needed to be
strong enough so that the central projects group
could easily push back projects supported by more
Groundwork for Order
After analyzing the situation and interviewing
stakeholders, I devised a three-dimensional priori-
tization framework that emphasizes the business
value of a project and highlights the nonfinancial
attributes of its achievability:
n Dimension A—value preservation: Reflects the
criticality of the project by identifying its impor-
tance and urgency in preserving the current
business processes and value.
n Dimension B—value addition: Highlights new-
business value the project will bring into the
n Dimension C—achievability: Indicates how well
the sponsor and project team understand the pur-
pose and expected outcome of the project. This
dimension also encompasses the project’s risk pro-
file and achievability in terms of available resources
and technologies necessary for execution.
Each dimension is further divided into two sub-dimensions with different weights to increase the
granularity of the scoring and reduce the subjectivity of the final score.
The figure below outlines the dimensions of the
framework and shows their respective weights in
A: Value preservation, B: Value addition, C: Achievability