Feedback from projects executed in the past is also useful to pick the right criteria. Are there sufficient resources in terms of time, budget, infrastructure, and people with relevant expertise?ĭefining selection criteria is an important function of project portfolio management that’s done in collaboration with various stakeholders, such as customers, leadership team, and project managers.Does the project contribute to innovation?.What is the impact to the organization’s growth (e.g., customer volumes)?.What is the payback or break-even point?.However, if the goal is to cut costs and increase longevity, the latter option may be preferred.Ī few examples of project selection criteria are: If there is an aim to expand the plant, the former is a sensible option.

It depends on which promises better ROI, the long-term goals for the organization, etc. The difficulty often lies in leaving projects off the table, and it takes strong leaders with a clear vision to do that.įor example, if there are two projects-one that extends capacity or flexibility of a plant, and another that improves efficiency and expected lifespan of that facility-which one do you select? Ideally, deciding whether to go ahead with a project or not should be straightforward. Project Selection Criteria for Portfolio Management Successful project delivery: When organizations have good project selection and prioritization processes in place, it leads to the successful delivery of projects. Prioritization of projects gives companies the first-mover advantage, enabling them to reach customers before competition. Shorter time-to-market: As companies become larger, they struggle to maintain an aggressive time-to-market, with a sea of projects competing for attention. The upside of this consistent approach is transparent downstream communication, as project managers get clarity on why a certain project was approved or rejected. The right selection helps companies stay on track with their goals.Ĭonsistency and transparency: A standard selection approach helps the PMO benchmark projects against well-defined criteria rather than use ad-hoc processes that lead to inconsistent approvals. Strategic alignment: A project that does not cater to organizational goals, even if executed flawlessly, is a waste of time. Increased efficiencies: By investing effort upfront to evaluate the project pool, companies weed out inefficiencies that may creep up later due to not having enough capacity for execution. Several selection criteria and prioritization methods, discussed later in the article, can be used to weigh projects against each other, based on their returns. Let’s take a look at the benefits that companies stand to gain when these are balanced right.īetter ROI: The fundamental outcome of any project selection process is to increase the ROI. Project selection and prioritization are all about having a game plan that accounts for both capacity and strategy. Benefits of Project Selection and Prioritization PPM implementation can be time consuming, which is why establishing a project management office (PMO) that works on selection and prioritization can be extremely beneficial. This demonstrates how crucial the PPM function is. As per the 2017 PMI report, 37% of project failures are attributed to a lack of clearly defined objectives and discipline when implementing strategy. Selection and prioritization are important elements of project portfolio management (PPM), an approach that connects the execution of projects with high-level business strategy. However, the terms “prioritization” and “selection” are often used interchangeably, as the two processes are intertwined. Prioritization refers to ranking or scoring projects, based on certain criteria, to determine the order of execution. Project selection is the process of evaluating and choosing projects that both align with an organization’s objectives and maximize its performance. Given the large scale and complexity of projects, as well as constraints in resources such as time and budget, the challenge is to identify the perfect combination of projects that can fetch highest returns. Rather, there seems to be a problem of too many ideas, as a long pipeline of proposals wait in queue, competing for attention. There is no lack of project ideas in organizations today.

Network project priority matrix