Prioritising projects in a portfolio is not a science. There is no system in the world that can prioritise and make decisions for our organisations…. if there was, we wouldn’t need C’ Level people to be held accountable for making those decisions.
Instead, we have to present the information for the C’Level people to make the decisions. Therefore any prioritisation process and assessment should aim to be objective, then allow governance to make a subjective decision.
To start with, there are only 3 types of projects and programmes:
- Strategic – Programmes and Projects which align to the Organisations Strategic Objectives
- Regulatory and Compliance – Those projects which governments, bodies and legally organisations have to deliver to satisfy regulatory, legal and compliance of law requirements
- Keep the Lights On (KtLO) – Projects and Programmes which keep the organisation running by replacing obsolete infrastructure
Although we can prioritise projects within each of these 3 areas, It’s difficult to measure all types of projects against each other with a pure metric, so, a more than capable Portfolio Office and Portfolio Manager will facilitate the decisions to be made by C’ Level people to ‘balance the Portfolio’.
Projects are investments, they give a return for the effort and budget for each project, and this investment also carry’s risk; therefore any prioritisation must take into account, the following areas of assessment:
- Alignment to Strategic Objectives
- Benefits to be achieved (dependant on how benefits are measured in your organisation)
- Financial Return (if your organisation is Private Sector)
- Proximity of Change
- How long will it take to deliver, and when does it have to have happened by – e.g Regulatory and Compliance / KtLO
- Cost – and more importantly, the type of cash (Opex / Capex) and the Cash Flow
- Risk – the certainty of delivering to cost and on time, but also the risk associated with delivering the benefits
- Complexity – Does the project requires scarce resources, multiple suppliers, development of new technology, changing a culture etc
- although complexity can be associated with risk, if complexity is measured and assessed, it can drive the behaviour to make projects less complex, to raise the overall prioritisation
More to follow….