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An updated version of a paper first
submitted by Trade Press Services, February 2008
© Don J. Wessels.
Published here May 2008.
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Project Prioritizing
Forrestor Research in their publication Use Business Cases to make PPM more effective stresses the following four areas:
The investment worthiness of the project. The cost-benefit analysis section of the business case lays out the predicted economics of the project. Metrics such as ROI, NPV, and "time to break even" play a role in determining relative priority such that the projects with the most attractive return get priority.
The alignment of the project with the strategic objectives of the business. The corporate-level strategic plan articulates the goals - and the actions required to achieve the goals - that support the strategic objectives. The alignment section of the business case will "connect the dots" between the deliverables of the project to the strategic plan goals and measure the project contribution to the achievement of individual goals, thus enabling projects that are part of a key strategy, such as market expansion, are funded before projects that are connected to less important strategies.
The risks associated with successful project execution. Project managers must make assumptions about the dollars, dates, deliverables, and resources that are associated with project development. The predictions associated with the realization of these assumptions translate into project risk. For example, project managers estimate the probability of receiving required skills needed for project tasks - and quantify this in their project execution risk metrics. Project risk should be a factor selecting projects for initiation - as the project portfolio consisting of too many high-risk projects will be a management challenge.
The risks associated with the realization of project benefits. The benefits of the project are also based on assumptions and predictions, such as market response to new products, customer wallet share or retention improvements, or cost savings due to being able "to do more with less." The risks with the necessary assumptions and predictions should be described within the business case much like they are in the prospectus for a stock market offering. This enables the whole project portfolio to be balanced in terms of benefit risks - and facilitates the post-implementation benefits realization.
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What
is Wrong With This Picture?
