For our third installment of the EPM Live PPM Briefing Series, Harvey Levine looks at the process of ranking and selection of projects.
In the initial blog in this PPM (Project Portfolio Management) series, we noted that PPM has two primary phases. The first part focuses on the prioritization and selection of projects for the portfolio. The second part deals with managing the projects within the portfolio. These two components require different practices. However, while separate in nature, the two phases impact upon each other, so they must be integrated. In this segment, we focus on the components of the first phase.
Selecting Projects for the Pipeline
This phase deals with proposed projects and provides a structured process to:
- Guide the preparation of project proposals (business case) so that they can be evaluated
- Evaluate project value and benefits
- Appraise the risks that might modify these benefits
- Align candidate projects with enterprise strategies
- Determine the most favorable utilization of resources
- Rank projects according to a set of selection criteria
- Select projects for the portfolio(s)
If we look at the front-end of the Project Portfolio Life Span we see that the focus of the first phase is on screening and ranking projects. This recognizes the most common issue facing project and strategic planners. That is; how do you whittle down the mass of proposed projects, in a logical and rational manner, and arrive at a portfolio that delivers the best possible benefits to the firm?
In order to perform the ranking and selection of projects, it will also be necessary to:
- Execute a strategic plan and subsequent tactical planning guidelines
- Maintain an inventory of available resources
- Establish budget buckets for the portfolios
- Decide on an optimum or acceptable size of the project pipeline
- Establish a set of weighted scoring criteria
- Set some boundaries or guidance for acceptable risk
In the execution of this screening and ranking process, we’ll continue to keep in mind the need to apply the PPM triple constraint, considering the strategic, value, and resource elements of each project and their impact on the portfolio as a whole. This is accomplished by developing a comprehensive set of selection criteria – which is the subject of the next segment.
As a preview of the entire process (both phases) as an integrated, flowing system, we offer the author’s model of a comprehensive PPM process, including a pre-qualification feature that aims to reduce the overflow of bad ideas and projects into the portfolio hopper.
Harvey A. Levine, with 50 years of service to the project management industry, is a pioneer in the field of Project Portfolio Management (PPM). Mr. Levine is the author of three books, and over 275 articles, whitepapers and videos on Project Management. His 2002 book, “Practical Project Management: Tips, Tactics, and Tools”, is still available from John Wiley & Sons. Mr. Levine’s 2005 book, “Project Portfolio Management, A Practical Guide to Selecting Projects, Managing Portfolios, and Maximizing Benefits”, Jossey-Bass, is a Wiley best-seller. Mr. Levine is past president and chair of the Project Management Institute (PMI®) and a PMI Fellow. For more information on Harvey please visit http://theprojectknowledgegroup.sharepoint.com.