Strategic project selection must have a structured approach that you can replicate or refer to for most projects. With multiple constraints like resources, budget, time, infrastructure, skills, it becomes difficult to select or prioritize projects. In this article at Project Times, Mark Romanelli discusses 7 approaches to help you with your profitable project selection.
Ways to Achieve Better Project Selection
When faced with multiple constraints, identify projects that would bring out the best outcomes. Outcomes vary from company to company and even situations. To decide well, following are the 7 approaches to the most suitable project selection:
- Financial Benefits: The common method of project selection method is prioritizing based on the potential revenues. ROI and Payback Period are popular financial analysis tools. To calculate ROI, use the following formula:
ROI = (Gain from Investment – Investment Cost) / Investment Cost
- Aligning to Strategies: Organizations set a few strategic goals at the beginning of a year that they want to achieve. Project selection based on strategic alignment is another popular approach that you can consider.
- Solving Problems: Projects are often risks turned into opportunities. If your organization is undergoing several challenges, convert those into projects and prioritize during the project selection process.
- New Prospects: Identify new market opportunities or a suitable time to launch a new product or service. Work on projects that can leverage these new openings.
- Adapting to Changes: You must adapt to the new environment and comply with the new rules and regulations. Perform project selection that would help you upgrade to a new phase of business dealings.
- Timeline: Time of implementation and total project life cycle time are two factors based on which you can select projects.
- Weighted Scoring Model or Decision Matrix: Use this model when you are bogged down with several important factors like cost, location, time. List down the factors and projects and add relative values to each. Multiply the project scores with the factor weights. The project that scores the highest after adding all the multiplied values, pick that up first.
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