Project Criteria for Selecting the Right Work
Many of the businesses we work with have more projects in the pipeline than capacity to deliver. Knowing which projects to pick for the best business results becomes a crucial skill. After all, we can all be busy, but are we busy on the right things?
The Project Management Office has a key role to play in helping business leaders make the right decisions.
Typically, PMOs use a list of criteria to help prioritize incoming project work. Ideas for projects are ranked against the criteria. If the project scores highly enough, it will move up in the pipeline to be worked on at an appropriate time.
If the project is important enough, and scores highly enough, it might take priority over existing, in-flight work. Mature PMOs know that sometimes it is necessary to put a project on hold in order to make better use of the resources by delivering something else that is a higher priority.
Project selection discussions are held in all businesses and normally the process goes unchallenged. The selection process is often only challenged when there is too much work to do for the resources and project teams push back on management, asking for help with prioritizing their workloads. When the executive teams say yes to everything, the project delivery teams find it hard to get ‘everything’ done.
That’s why it’s important to have a project selection process that looks critically at projects and what value they bring to the organization. Not all projects are created equal, and they ought to be ranked in order of priority for the business. This also helps delivery teams prioritize their time and resources appropriately.
The selection process might start with preparing a business case, but it’s the selection criteria that are the stars of the process. It’s these criteria that a project is assessed against and deemed worthy of more work.
You can break the criteria into two sections: criteria that are based on working in the business, and criteria that are based on working on the business.
Let’s dig into those two categories so you can see what they look like as part of the PMO project selection process.
Working in the business
Project selection and prioritization criteria that relate to working in the business are things like:
- The value of the project
- The resources required to deliver the project
- The risk relating to the project so that can be assessed against the portfolio
- The profit margin for the project
- The brand impact of the project, or the market share impact
- The lead time before you start seeing any revenue increase.
These are all internally focused constraints. They are helpful for project prioritization – you can’t say yes to a project unless you know the resources required, for example – but they aren’t all you should be looking at.
These criteria are limited to whether or not the business can deliver the project and whether it’s worth the effort to do so.
Working on the business
Selection criteria relating to working on the business are those that help you move the business forward. Some examples would be:
- The process improvement you’ll see as a result of the project
- The service improvement to customers that the project will deliver
- The increase in employee engagement you’ll receive as a result of the project
- The decrease in overall business expenditure
- Other criteria that directly relate to items on your company’s balanced scorecard or key strategic performance metrics.
In other words, how will your business be better by doing this project? When you add that consideration into the mix, you’ll be more likely to make a decision based on a holistic view of the project’s benefits instead of the simple ‘constraints’ analysis.
Getting The Balance Right
It’s important to get the balance right. You can’t make good selections for future projects based solely on one type of criteria or the other. And it’s important to have good management information on which to base the decision, so that business cases are assessed in a fair and measured way.
Use tools like Primavera P6 EPPM to produce management information to support business cases. Run your business processes through enterprise project portfolio management and ERP systems, so you can extract what you need to prepare robust data.
There is an immense benefit to getting the balance right when you are making project selection decisions. Companies without reliable, repeatable ways to make good decisions end up prioritizing projects that are the low-hanging fruit. They spend time on cheap-to-deliver projects with low resource requirements, or urgent requests, or purely hard financial information that doesn’t show the strategic big picture.
Benefits that relate to transformative measures, like improvements in cycle time or redesigning a process from scratch, are difficult to quantify in the same way as criteria like resource time. You can estimate a budget, but it’s hard to estimate the positive change management impact for projects. However, that doesn’t mean we shouldn’t try!
If your PMO needs support in this area, an experienced consultant with a background in PMO leadership support and benefits management can work with your team over a short period to set up a process for project prioritization.
Once you’ve got a solid process in place, you can better manage your pipeline of incoming project work. You’ll have confidence the PMO is helping business leaders select the right mix work of work to support strategic imperatives and keep the business running day to day.