We are constantly speaking with companies about their various project prioritization and selection challenges… which can feel a little like throwing darts at the wall with a blindfold on. It doesn't have to be hit-and-miss like this.
There are a number of questions we hear again and again when talking to people who are taking their first steps towards formal prioritization. I thought I’d put them into a FAQ so you can get the answers right now.
So, if you want to get the basics of project prioritization and selection nailed quickly, read on!
What is project prioritization?
“I’ve got too much to do and not enough hours in the day!”
If you feel that pain, you need to prioritize. And what’s good for an individual is good for an organization. Most departments have more demands on their resources that they can deliver and so they have to select the things they do and the things they don’t.
Project prioritization is simply a formal process for selecting the things you should do in order to maximize the “value” you deliver to the organization with your limited resources.
Do we need to prioritize projects?
The short answer is “Yes”.
Research suggests that 86% of organizations under-deliver on their project portfolios by at least 25%.
Think about that. Take the number you invest in projects each year. Divide it by four... and that is how much value you could be throwing away.
I have yet to find an organization whose leaders didn’t feel like they had more on their plate than they could deliver, so all managers prioritize. Some work on a “first come, first serve” basis, some allocate a certain amount of resource to each “customer”. In many organizations, project selection is an exercise in politics. None of these project prioritization methods passes our test of project prioritization being a formal process that allows you to maximize the value you deliver.
What is the value of / business case for project prioritization?
You’ve heard the saying, “Ready, aim then fire!”… but it seems that many portfolio managers ignore this maxim. Only 12.5% of organizations look at their projects to see if they align with corporate goals.
Is it any wonder, then, that 86% of organizations under-deliver on their project portfolio’s value by at least 25%?
So, let’s say you’re investing $10m, that means you’re wasting $2.5m Crazy!
So, we thought we’d help out. We’ve put together a template business case for project prioritization. You can download it here.
What is the difference between project prioritization and portfolio management?
Project portfolio management is a great thing to aspire to, but often these initiatives focus on project oversight and governance, ignoring the prioritization part of the process.
Project prioritization is one of the most important parts of PPM - one of our customers described it as delivering 75% of the value of PPM at 10% of the cost. If you implement PPM without first addressing prioritization, you might be able to execute flawlessly, but you'll be executing the wrong stuff! Read more here...
Well, selecting projects is really about 3 things. First, it’s about building consensus around what your corporate priorities and criteria are. Second, it’s about selecting projects based on those criteria. Third, it’s about “selling” the project portfolio to the organization.
AHP is a collaborative process that ensures you are building buy-in at every stage. It is a very powerful tool for understanding the relative importance of criteria and to rank your projects against those criteria. It’s totally transparent and, with TransparentChoice, it’s open and inclusive (if you want it to be).
Should we spend money on professional services?
The cost of professional services is one reason that some companies have not embraced technology for making this kind of decision. It turns out that, given the compelling business case for better project selection, this is probably a short-sighted decision, but having said that...
At TransparentChoice, we want to change the world. To do that, we are on a continuing quest to make our software as simple to use as possible. As such, you can get the job done without professional services. A good professional can help you manage your selection process, sure, but you don’t necessarily need external help. So getting started is cheaper...
What is the typical cost of prioritization tools?
With TransparentChoice, the tools typically cost just a few thousand dollars.
This is a conscious decision on our part. We want to change the world. We want to stamp out waste and we want to do it everywhere. So the tools have to be affordable.
Oh, and our instant-on web application means you can be up-and-running in just a few minutes. This is not the case with some other solutions.
So, the cost of not changing your project selection process is 25% of the amount you spend on projects and the solution costs a couple of grand… hmmm. I think we can make the CFO very happy today!
What will my team think?
Sometimes, CIOs are concerned that a formal prioritization process will demoralize their team. The logic goes something like this: if we give the business more visibility into the prioritization process, that means we have less power.
Of course, the opposite is true. What demoralizes a team more than anything else is working on projects that don't deliver value. We all like to feel like we are contributing and, it turns out, that confidence in the decision has an impact on how effectively the decision is implemented. More confidence leads to greater commitment from the team.
So, having a clear and transparent project selection process gives your team the confidence to really "go for it", but it does more than that. It gives your team the confidence to make decisions themselves, decisions that are informed and consistent with company drivers. Nicolaj Peterson of Energinet, after implementing TransparentChoice, put it like this, “Now our IT team knows how to be strategic about resource allocation. We could not do that a year ago.”
How can I get started?
We’ve covered this one in other blogs. Basically, all you need to do is build the business case, define your priorities / criteria and then put software in place to support and automate things. You can read how in this blog.