EPM Live PPM Briefing Series #4: Establishing the PPM Selection Criteria

In today’s post of EPM Live’s PPM Briefing Series, Harvey Levine speaks more to the selection process of project portfolio management and how to avoid project failure. 

The ranking and selection of projects necessitates the creation of a set of evaluation criteria. Without this, the process can easily become subjective, rather than objective, and the entire foundation of PPM falls apart. The entire idea is to promote a logical and orderly basis for selection, removing the personal biases that often permeate the process. All too often, a project gets into the system and is approved based on a chance meeting of a couple of people at the water cooler. One of them has an idea. The other, a management-level person, thinks it’s a great idea, and, boom, it‘s a project. No proposal. No business case. Takes resources away from more important projects. Guaranteed failure. This is what we are trying to avoid with PPM and it works.

The selection criteria represent a measurable expression of the goals of the portfolio. The criteria should be organized along the lines of the PPM triple constraint, with divisions for strategic alignment, benefits (value/risk), and resource impact. The best expression of criteria would provide a descriptive narrative for each criterion item, a range of values (with a description of each) and a weight factor defining the relative importance of each criterion.

In practice, the proposed projects are first scored on a pass/fail basis. That is; a pass rating allows the project to be put in a hopper of qualified projects, which would later be ranked or prioritized using the criteria and weight factors. A pass rating signifies that the proposed project meets the minimum requirements for supporting and balancing the strategic, benefits, and resource demand elements of the criteria.

In the ongoing process of PPM, the criteria are updated in conjunction with the periodic update of the strategic and tactical plans, and are published to those involved in the project proposal and selection process.

Just what is it that gets evaluated against the selection criteria? In most situations, the project sponsor should prepare a business case. To allow a rational evaluation, the business case should address each of the criteria areas. This motivates the sponsor to ask some hard questions – questions that are often pushed aside until commitments are already made and money is down the drain.

As originally conceived, the evaluation process starts with the review of a proposed project against the published criteria. In practice, I found that a significant portion of proposed projects were so “off-the-wall” as to be quickly get tossed in the “fail” bucket. What a waste this is! Who knows how many hours were put into a non-qualified project proposal, especially if a full business case was prepared? Now, here’s where the published criteria earns its keep.

I recommend a “pre-proposal” phase. The project sponsor, working with the published criteria, performs a self-appraisal of the proposal against the criteria. This is done using early-stage, rough data, prior to investing in a full-blown business case. If the sponsor is being objective and honest, the proposal can be scrapped if it is way out of line with the criteria, or tweaked to be more in line with the alignment and benefits expected. If the preliminary proposal is passed on to the review team, it can be evaluated and either denied or approved for the purpose of investing in building the full business case.

Here is a graphic view of how the process works:

  • Project Screening & Ranking – Step 1

When a sponsor proposes a project it gets reviewed against increasingly expanding criteria. If the proposed project is to be considered it is initially checked against published strategies and available (critical) resources. If the proposal “qualifies” a business case is prepared for the next level of review.



  • Project Screening & Ranking – Step 2

The business case defines all aspects of the project. It demonstrates how it supports strategic and tactical initiatives. It calculates expected ROI. It modifies ROI based risks. It expresses the “value” of the project. It outlines impacts on resources. 



  • Project Screening & Ranking – Step 3
  1. The PPM administrator in the Project Management Office (PMO) applies ranking criteria to establish priorities along all proposed projects. 
  2. Based on the priorities and the available skills and resources, top-down trial allocations are made. Preferred, high-value projects are allocated available resources until the capacity limits are reached.
By mandating structured data models, for the business case and the value calculations, all of the data can be entered into the PPM software system in a consistent manner. The robust PPM system provides clear pictures of resource impacts and supports real-time, what-if analysis.
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.