One of the key processes in a PPM solution (project portfolio management) is project selection – ensuring you do the right projects. A PPM approach requires tools to help decision makers evaluate, grade and prioritise project requests.
The starting point for project selection is to create an inventory of all your current approved projects and the projects being requested.
Then during the project selection phase you should evaluate projects on the following criteria:
- The value and benefits of the projects.
- Perform a risk assessment of each project.
- Rank or prioritise projects.
- Analyse resource supply against project resource demands.
In this series of blog posts, we are going to review three common techniques that you can use to help with project selection and support the evaluation steps above.
- Net present value (NPV). Net present value is a financial technique that helps you understand if a project will provide a positive return on its investment.
- Strategic alignment. Using strategic alignment as part of the project evaluation process helps you understand which projects most closely align to your organisation’s key drivers. The technique uses scorecards to evaluate each project against standard criteria giving an overall score for the project.
- Resource capacity and demand analysis. Finally, resource capacity analysis helps you determine if you have sufficient resource to undertake the desired projects.