The two main ways to prioritise projects
The main goal of project portfolio management (PPM) is to select a set of projects for your team to work on that maximises both profitability and efficiency. That simplistic definition makes it sound like an easy choice, but that's rarely the case. Projects have many qualities worth considering in your ultimate decision, including the value of the project, the value of the client, the timing of the project, the work needed to accomplish the project, how the project fits in with others, what resources are available to you, and whether the project is subject to changes.
29 Aug 2017 10:54
Fortunately, there’s an easier way to think about this decision-making process; in fact, Meisterplan introduces two broad visions
for how to prioritise projects: the ranking method and the scoring method. In the ranking method, you’ll choose one or more key areas of priority, such as cost efficiency, timing, or client importance. When new projects come in, you’ll rank them against one another in those dimensions; for example, you’ll come up with the first-highest revenue project, the second-highest revenue project, and so on.
In the scoring method, you’ll select from a suite of different factors, and evaluate them together to come up with a subjective “score” for how beneficial the project will be. You might include things like how long it will take for the project to pay off, the urgency of a project, and its potential risk. The advantages of the ranking method
These are some of the biggest advantages of the ranking method:
The advantages of the scoring method
- Simplicity. Sometimes, the simplest evaluation method is the best. The ranking method doesn’t require any complex calculations, any special platforms or equipment, or any pre-existing expertise in project management. All you need to do is be able to identify and compare projects based on a single dimension — which may be reducible to a single number. For example, if you’re evaluating urgency, the projects with the soonest deadlines will be ranked in ascending order.
- Lack of competition. The method is also useful because it eliminates doubt in the form of inter-project competition. Each rank is assigned only once, so there is a clear first place, second place, and so on — there are rarely two projects tied for first. This eliminates a degree of uncertainty and a degree of subjectivity in decision making at the same time.
- Narrowed focus. Ranking is also advantageous because it gives you the power to “zoom in” to one criterion that matters most to your company. If you’re focused on building your reputation, that could mean ranking projects that have the highest likelihood of returning more work in the future. If you need more cash flowing, you’ll focus on ones most likely to return immediate revenue.
However, the scoring method also has some strong advantages:
Which is best?
- Comprehensiveness. Obviously, simple decisions force you to disregard many criteria that could be important. The scoring method is advantageous because it allows you to be comprehensive; you’ll be able to draw influence and make a decision based on several dozen different factors, all feeding into a single score.
- Customisability. The plan is also effective because of the amount of flexibility and customisability it offers. You can change your scoring criteria however you’d like, weighing different factors according to your current needs and/or preferences. If a certain scoring method isn’t working, you can easily tweak it so that it yields a different set of priority projects.
- Precision. Finally, because the scoring method is based on a calculation, you’ll be more precise with your measurements. You’ll be able to see not just how different projects rank compared to one another, but how close or far apart they are in priority as well.
The ranking method and the scoring method each have advantages and disadvantages, and you may find that your managers have a preference for one over the other
. Ultimately, the success of each model is going to depend on the brand using it, the execution of the manager in charge, and the platform used to shape those initial calculations. If you’re uncertain which one is better, you can experiment with both, or perhaps attempt a hybrid model to see the advantages of both.