The Project Ranking Tool
The Project Ranking Tool shown in Figure 1 is a simple
and handy tool to start the relative ranking of a project. It lists project selection
criteria, developed as an outgrowth of the strategic planning process that the
portfolio planning and management team can rate according to importance and influence
in achieving strategic goals. A change in corporate strategy or business needs
would of course necessitate a review and refinement of the criteria. The worksheet
is useful when evaluating new project proposals as well as during program reviews
of ongoing programs and projects.
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Project Selection Criteria
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Weight
(W)
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Rating
[R]
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Weighted
Rating
[W x R]
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Customer Satisfaction
1-------------------------------10
Low High
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Business Results
1-------------------------------10
Low High
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Employee Satisfaction
1-------------------------------10
Low High
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Increased Revenue
1-------------------------------10
Low High
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Reduced Cost
1-------------------------------10
Low High
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Longevity
1-------------------------------10
Short - Use for 2 Yrs
Long - Use 4+ Yrs
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Size of Investment
10-------------------------------1
Small - $25-100K Large
- > $100K
6 Person Months 12
Person Months
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Project Complexity Risk
10-------------------------------1
Relatively Simple Relatively
Complex
Straight Forward Poorly
Understood
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New Technology Risk
10-------------------------------1
Proven Unproven
S/W H/W S/W
H/W
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Benefit Risk
10-------------------------------1
Known Committed
Risky Out-Year
Benefits Estimates
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TOTAL RATING:
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Figure 1: Project Ranking Tool [3]
Depending on strategic goals, each enterprise will have its own criteria, and
their meaning should be clearly defined. The selection criteria used in the model
above, for instance, may be defined as follows:
- Customer satisfaction: impact of project on external customers
- Business results: impact of project on strategic goals
- Employee satisfaction: impact of project on employee retention
- Revenue: impact of project on increased revenue
- Cost: low vs. high cost to fund the project
- Longevity: length of time the enterprise will benefit from the new product
or service
- Size of investment: large vs. small investment risk
- Project complexity risk: simple vs. complex project
- New technology risk: proven technology vs. leading edge, unproven technology
- Benefit risk: risk to realizing projected benefits
Once the project selection committee has reviewed the business case for a project,
it can use this worksheet to weight the criteria and rate the proposed project.
Note that the ranking scale is 1-10 for the first six criteria and then reverses
to 10-1 for the last four. This is because poor scores in the areas of size of
investment and risk reduce the value of the project overall. Each individual rater
weighs each of the criteria compared with other criteria (in the weight column)
and then rates how well the project meets the criteria (in the rating column).
The next steps are to multiply each rating times the weighting to obtain the
weighted rating, and to add up all of that person's ratings for all criteria.
Finally, add together the scores for all the raters, and divide by the number
of individuals to arrive at the overall score. Remember that this tool should
be viewed in conjunction with the risk of the project and the risk of the realization
of the benefits of the project.
3. ©
Management Concepts; adapted from Xerox Corporation
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Project
Prioritizing
