Project Prioritization: Techniques, Process & Examples

Instructor: Elizabeth Wamicha

Elizabeth teaches undergraduate courses in Business and Information Technology for the last 7 years. She is currently on course to completing a Doctorate in Information Systems

Many times project managers have the difficult task of seeing which projects are a priority for an organization and which ones are not. This lesson examines the various techniques that project managers use to prioritize different projects in a project portfolio. The lesson also looks at the process of project prioritization with some relevant examples.

Project Prioritization: A Definition

The aspect of project prioritization comes from the fact that it is difficult for organizations to implement all of the projects that they have on hand at the same time. This is mainly because there are just not enough resources to implement all of the projects that an organization wishes to. For example, if, as part of an organization's long term strategy, it wishes to expand its operations to other countries, then they need to consider what projects will have to be implemented. These projects would include construction of new offices, hiring of new personnel, marketing their products or services to these new areas and so on. However, it would be difficult for the organization to implement all these projects at once. Therefore, the process of prioritization focuses on determining how best to sequence projects, beginning with the high priority implementations. This lesson looks at a number of prioritization techniques that are used, and the prioritization process coupled with some relevant examples.

Prioritization Techniques and Processes

Prioritization techniques are often used by organizations, not only to select the most important projects, but also to ensure that resources are used effectively by reducing operating costs and making sure that the strategic goals of the organization are streamlined. This section looks at the various techniques that can be used at each step of the prioritization process.

Step 1: Categorization of all Potential Projects

This is often the first step of the project prioritization process. At this point, the organization has a list of all the potential projects that it can undertake. Here the project manager is required to categorize the different possible projects. Some of the criteria that can be used include:

• Strategic Alignment: the project manager attempts to uncover how well the different projects align with the long term strategic goals of the organization.

• Impact on organizational business processes: the project manager also establishes how well each of the projects match with and impacts on the existing business processes.

• Integration with the existing technical infrastructure: the project manager also measures how well the proposed projects align with the existing technical infrastructure.

• Project Payback: the project manager needs to verify the benefits of the project in terms of any cost savings or any advantages that the organization might have over its competition.

• Risk analysis: the project manager needs to carry out a needs analysis in order to establish the likelihood of success or failure of a given project.

Step 2: Project Scoring

In this step the main idea is to develop a scoring model that can be used to grade the different projects. The most common scoring method is the weighted scoring method. In this approach, a list of criteria is developed. Each criterion is given a weight depending on how important the criterion is to the organization. This approach provides a comprehensive overview of how well each of the projects matches up to the organization's priorities. When developing the scoring model, it is important for organizations to break down the important criteria that the projects they undertake must have. The weighted scoring assigned to each of the criteria needs to add up to 100%. For example, given the criteria above, each criterion can be weighted in the following way with respect to its relevance to the organization:

1. Strategic alignment - 35%

2. Impact on business process - 25%

3. Integration with technology - 10%

4. Project Payback - 15%

5. Risk Analysis - 15%

Note that the weights assigned to each of the criteria should add up to 100.

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