Project portfolio prioritisation schemes give assurance to management that the project selections made give maximum value to the organisation for the resource allocated.
Most organisations have more opportunities available and problems to solve than they are able to resource or afford. A project portfolio often represents the largest investment an organisation makes on a yearly basis. Failure to invest wisely, either because money is spent on the wrong things or the investment fails to deliver the intended return is a major source of concern to Boards. Prioritising - investing in the most optimum way - is a critical discipline for an organisation.
Why is it valid
Prioritisation approaches and ways to manage the competition for resource that are based on criteria that compares costs (adjusted for risk) against benefits (value - also adjusted for risk) have been proven to provide maximum return with optimum resource utilisation. A common difficulty faced by project portfolio selection committees is coping with the combinatorial effect. i.e. As numbers of candidate projects rises the number of possible combinations rises very steeply. With just 12 projects there are 4096 while with 25 the number is in the billions. It is therefore unsurprising that without good prioritisation schemes and tools mistakes are made when considering best combinations of projects in a portfolio.
What you will experience
The Board can determine what is intentional and what accidental. A transparent and maintainable set of criteria is put in place to control entry on to the portfolio list and inclusion into the portfolio itself.
With this, senior management is assured and confident that the best options have been selected and that throughput has been maximised against priority.
How you might start
CITI has developed tools, techniques and approaches to set up prioritisation schemes for use by governance groups involved in project portfolio selection and management. Usually called in when a portfolio has become unmanageable due to over-contention for resource and working closely with the PMO or other project groups, project registers are established clearly articulating a number of characteristics: cost and benefit risk profiles of the projects, the basis of choices made and organisational preferences.
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