Project Managers

The Project Management Social Network | Project Manager Jobs

PROJECT PRIORITIZATION – EVERY ORGANIZATION DOES IT BUT DOES EVERY ORGANIZATION DO IT WELL? - Dr. Richard Bayney, President, Project & Portfolio Value Creation.

Prioritization can be defined as ‘a system to determine the right to have or do something before others’ or ‘a state of the level of importance or urgency in rank’. Prioritization of Projects is a time-tested methodology that is based on several approaches, the most common of which use: (a) heuristics (e.g. customer perception) of a single individual or a few senior individuals within an organization, (b) single dominant qualitative (e.g. customer satisfaction) or quantitative (e.g. ROI) criterion, and (c) weighted aggregate of multiple quantitative and/or qualitative criteria.

At first blush, Project prioritization seems a terribly trivial exercise – rank order Projects and ‘draw the line’ when you run out of budget and/or human resources. But, what should the rank ordering of Projects be based on? A single quantitative criterion? If not, why not? Further, shouldn’t the criterion or criteria in use be decision-relevant? By definition, all Projects that appear on a priority list have some sort of priority but do some of them even deserve to be on such a list?

I have not yet met an organization that boasts a dissatisfactory Project prioritization process and methodology. Yet, the many concerns raised by organizations relating to poor resource allocation is directly related to one or more of the following issues: (a) insufficient clarity regarding why some Projects are ranked higher than others, (b) what constitutes a ‘Must Do’ Project, (c) legacy Projects that continue to consume constrained resources, and (d) how to deal with Projects that end up ‘below the line’ especially when Projects ‘above the line’ are dependent on one or more of these ‘below the line’ Projects. Given that most Governance bodies do not make Project prioritization decisions on the basis of a single criterion, a multiple objective methodology that employs utility theory is highly recommended. An example of a model derived from such a methodology for the IT industry is depicted (Figure 1). As Projects mature and/or information changes, the model is easily updated to reflect the rank order of Projects within a Portfolio. However, it is important to stress that organizations have a remarkable tendency to re-prioritize Projects at general gate reviews; this should be avoided as Projects that are ‘in flight’ do not deserve to be re-prioritized until their next decision point or specific gate review. An organization that utilizes Project prioritization methodologies with the appropriate discipline does so in a manner that acknowledges Projects that are already ongoing while prioritizing new Projects that are about to enter the Portfolio, perhaps as others are about to exit.

I do not believe that mandated Projects warrant being on a Project prioritization list; they should simply be allocated the resources they require to be done where the only discretionary decision necessary relates to when they get done as opposed to whether they get done. To be sure, I have met with initial resistance from some organizations when advocating this approach but they eventually come to terms with the fact that the approach simply clarifies which Project decisions are discretionary and which ones are not. Lastly, and for the record, the terms Project prioritization and Portfolio prioritization tend to be used interchangeably; in reality, Portfolios are seldom prioritized whereas Projects undergo some form of prioritization at least once in their life cycle.

Figure 1 – Example of a multiple objective prioritization model for the IT industry

Views: 2017

Comment

You need to be a member of Project Managers to add comments!

Join Project Managers

Comment by John Pryor on February 24, 2009 at 3:16pm
I would disagree somewhat with the author. My experience is that organziations take the factors mentioned into account when prioritizing projects. However, the element of time seems not to be considered very well. What I mean is that priority changes with time and sometimes with success as well. I've had the experience of working on a project that is clearly identified as the organization's top priority, but 6 months down the road of a 12-month prject, something new comes up and I get bumped down to second or third priority and lose key resources. I can understand that priorities change and, as a PM, I try to roll with the punches. The more annoying situation is to be on the top priority project and be succeeding so well that management no longer sees the project as requiring priority attention and then pulls some resources; more than once I've been a victom of my own success.
Comment by Randy Tangco on February 24, 2009 at 11:01am
I would say prioritization should happen at two levels: one is on strategic while the other one should be on the tactical level. Senior and Executive level management determines the project priorities as it aligns to the company goal or vision. Then this same vision goes down to the resource and project managers who are doing tactical work. With this info available, decision making is done better at the tatical level which includes the choices of work that needs to be done.
Comment by Brian Veatch, PMP on February 24, 2009 at 10:13am
There are many variables to prioritization. In some cases, lower priority projects get worked on before others due to resource availability, not only people but test lab, source code need for next project is already checked-out, etc. A resource may need a filler project before the next one starts. These sort of things can be decided upon the manager.
Comment by Shyamsunder Panchavati on February 24, 2009 at 6:17am
I agree with the author that every organization claims perfect prioritization. I feel the project prioritization and allocation of resources depends more on the importance the project manager holds in the organization. New project managers often find their projects on the back burner for reasons other merit.
I feel,the basic principle on which project prioritization works is of course the ROI,and the time it takes to get back investment. The following projects also qualify for prioritization.
A project which gives more cycles per year for your investment.
Any project which has a functionality match with the existing & available resources and does not need gestation for training or recruitment.
A project which acts as a precursor for large projects to follow.
And of course a project from a premium client, which adds to the reputation of the organization is a fit case for prioritization

Shyam

FEATURED

FOLLOW US
@projectnetwork

© 2014   Created by Mike.

Badges  |  Report an Issue  |  Terms of Service