Today, many projects across companies—regardless of size, industry, or organizational structure—are selected and initiated in isolation, without regard to their mutual influence or alignment with overall strategic goals. What are the risks of such an approach?
Without using project evaluation methods, an organization may face internal competition for resources—human, technological, or financial—as well as conflicts over timelines and objectives. In some cases, the execution of one project might even negatively impact other areas of the business.
Often, each department seeks to give the highest priority to its own initiatives. But unless an organization has unlimited resources and time, and lacks clear strategic goals, not all projects can be treated as equally important. Fortunately, there are proven methods for evaluating and prioritizing projects.
Involving Strategic-Level Planning
The first step for a program manager, project manager, or portfolio manager is to get involved in strategic planning. Collaborate with senior leadership to fully understand the company’s direction, timelines, and overall business context. No detail is too small here.
You may need to participate in several strategy planning sessions to gather valuable insights that inform sound decisions about programs, portfolios, and individual projects. Think of this process as creating a roadmap—not just to define your goals, but also to identify how to achieve them. It’s crucial to make sure you’re steering in the right direction.
Identifying Project Drivers
A project’s importance may stem from various factors. Projects are often launched to build or expand capabilities, meet requirements, remove barriers, reduce risks, solve existing or potential problems, drive revenue, seize new opportunities, or streamline operations.
Engage with leadership to determine which of the following drivers apply to each proposed project:
- Competitive advantage
- Cost reduction and financial benefits
- Operational efficiency and process improvement
- Regulatory, legal, or tax compliance
- Quality enhancement
- Risk mitigation
- Business growth opportunities
Quantifying Strategic Value
Ask leadership to evaluate each project in terms of impact and expected return. This will help quantify the strategic value of each project, along with its short- and long-term effects and the anticipated benefits of implementation.
Delays in launching strategically valuable projects should also be carefully considered. Some initiatives, although offering substantial long-term gains, may initially score lower when evaluated solely by regulatory or tax-related criteria.
Identifying Success Factors
Other critical considerations include return on investment, budget availability, resource constraints, deadlines, dependencies, and external limitations. Since budgets and timelines are nearly always tight, it’s rarely feasible to launch all projects simultaneously.
Some projects must be postponed due to dependencies on other projects or because of factors beyond the company’s control.
Building a Scoring and Prioritization Matrix
Once you’ve gathered all relevant information from leadership and other sources, compile it into a scoring and prioritization matrix. This will help rank projects based on defined criteria.
Use weighted scoring (e.g., a scale from 1 to 5, where 1 means very low importance and 5 means very high) to rate each criterion and determine the priority level of each project with precision.
Validating the Results
After evaluating all criteria and setting project priorities, double-check your results before moving into execution. It’s important to align expectations among all stakeholders. This gives leadership the opportunity to request adjustments or confirm agreement with your conclusions.
