In the world of project management, many leaders know the frustration of every project becoming a “priority” without a clear method to allocate time or resources to meet the strategic objectives of the organization. This can lead to stagnation, lost revenue, and projects that are doomed from the start due to poor timing and resource constraints. The ever-present risk of failing to act on your organization’s best projects—and sometimes choosing the wrong projects—is why your organization can benefit from a consistent project prioritization methodology.
Project prioritization is allocating resources to, aligning on, and defining the right projects at the right time for an organization. Prioritization is essential for increasing buy-in, awareness, success rate, and resource efficiency, accomplished by bringing a wide audience together with focused purpose and using agreed upon, quantifiable data. Prioritization initiatives allow leaders to accurately define the strategic goals their organization is trying to accomplish, then identify and rank the appropriate tasks and milestones that will bring the organization closer to those goals. For additional context, check out this article on the power of prioritization.
While many factors can influence the process of ranking prospective projects, the strategic significance of a project usually comes down to its value in two dimensions: effort and impact. Effort is a function of time and cost to implement, and impact is the total assessed value of project completion for your organization. After assigning effort and impact values to available projects and aligning with stakeholders on project priority, your organization can make educated decisions about funding and allocating resources for those efforts, driving the most impactful business outcomes.
Project Prioritization Methodology
Let’s explore Credera’s views on how to best approach project prioritization and offer an illustrative example. To begin, we must establish a few assumptions:
First, no situation is identical, so there is no perfect formula for project prioritization.
Second, leaders will be asked to assign value to projects. Your accuracy in assigning value is often the critical determining factor for successful prioritization.
These assumptions may present risk, but widely applicable prioritization approaches and an emphasis on consistency while minimizing bias help to mitigate this risk.
Project prioritization begins with selecting and sticking with a methodology. There are many prioritization tools and frameworks used by businesses globally, ranging from simple matrices to complex calculated models. At Credera, we find that project prioritization efforts are most effective when they are both straightforward and data driven, which is why we commonly utilize a simple two-by-two prioritization matrix informed by a consistent scoring model. A four-step process to define, assess, evaluate, and rank projects supports streamlined identification of those projects which best match our clients’ current strategic initiatives.
Credera’s 4-Step Prioritization Process
The tables above detail example assessment criteria for both effort and impact. Effort is assigned on a basic one to five scale, and impact is assigned using weighted criteria such as expected revenue generation, cost savings, and risk mitigation.
This prioritization matrix illustrates how effort and impact scores help categorize projects into quick wins, tactical projects, strategic projects, and lower priority projects. This categorization further supports the order of project execution for an organization.
At the conclusion of all steps, you should have a clear understanding of where tasks and projects lie within the prioritization matrix, and which are best aligned with your strategic objectives. Then you can confidently focus on executing the highest ranked tasks and projects that will deliver the greatest impact or outcomes for the business.
Project Prioritization in Action
Let us evaluate a hypothetical project called “PLM Tech Assessment” using the ‘Effort Assessment Criteria’ and ‘Impact Assessment Criteria’ tables.
The PLM Tech Assessment project has a 'time to implement’ of two to three months, and therefore an associated cost of $100,000-$300,000. This results in an effort score of 2.
This project is also expected to generate revenue of $3-6 million, offers ‘medium’ cost savings, and requires ‘high’ risk mitigation. Using the weighted values of the ‘Impact Assessment Criteria’ table we can calculate the impact score:
Transferring our assigned values to a prioritization matrix, our PLM Tech Assessment project would become a quick win given the low effort (2) and high impact (3.4) relative to other available projects (see below):
Once more projects from the portfolio are placed clarity of the groupings of projects bring value to the business. By identifying where each project falls, planning and prioritization can be conducted with a common operating picture for the team.
The True Value of Project Prioritization
Project prioritization—pursuing the right projects at the right time—is essential to achieving your organization’s strategic goals. To put it into practice, organizations must define, assess, evaluate, and rank projects using a clear, consistent project prioritization methodology.
Communication and establishing a universal understanding of metrics are critical to successful prioritization processes, driving buy-in to increase a project’s likelihood of success and resource efficiency. Applying an impartial methodology also works to mitigate disputes over resources and fosters support from all stakeholders.
At Credera, we know the challenges associated with project prioritization and would love to partner with your organization to achieve your strategic goals through impartial, consistent, and actionable prioritization methods. If you are interested in seeing how Credera's experts can support your company in executing effective project prioritization, reach out to our team at email@example.com for more information.