Project selection methods help guide an organizations decisions and weigh them against alternative projects. As a project manager or owner, you will inevitably have to make decisions regarding which projects to implement. As a team, you will need to carefully analyze all of these contributing factors (i.e: the goals of the organization, customer requirements, timeframes, budget, urgency, scheduling, etc..)
Evidently, there are many stages that precedes this critical one, all amounting to these decisions: Which projects should we undertake? How do we decide? These are very important questions to explore, for the answers will ultimately influence the project’s outcome.
Determining the right project selection method
Selecting a project using the right method is critical; the method you chose will directly affect the way your project unfolds. What is even more important, is selecting a project selection method that works best for you. The PMBOK outlines two traditional project selection methods that can be used:
1. Mathematical Models: Also known as Constrained Optimization, this method involves the calculation of several different mathematical factors. The technical definition states that it enables you to “solve problems in which one seeks to minimize or maximize a real function by systematically choosing the values of real or integer variables from within an allowed set. In more simpler terms, this method allows you to “determine the best possible elements of some objective function given a defined domain, including a variety of different types of objective functions and different types of domains.” (source: http://blog.simplilearn.com/)
2. Benefit Measurements: This method enables you to effectively compare the benefits and values of one project against another. You will want to use this model when you want to ensure that your integrated projects maintain a clear focus on benefits realisation. According to an article on Turning Point, Benefits realisation essentially involves “the collection, consolidation and analysis of data to measure whether stakeholders have been able to realise expected (or indeed unexpected) benefits from a planned change.” (source: http://blog.simplilearn.com/). In short, using this method will enable you to determine “the amount of benefit that has been realised to date, update estimates of future benefits and, where necessary, recommend remedial action to address shortfalls in the expected levels of benefits realisation.” (source: http://blog.simplilearn.com/)
Several different types of tools can be used to perform benefits measurements including but not limited to : Murder boards, scoring models, cost/benefits analysis, discounted cash flow. (Source: http://youtu.be/kgew70qkPEI)
Due to different degrees of complexity, Benefits Measurement models are more commonly used than the mathematical models.
Let’s shed some more light on this topic together: What are some tips for choosing the right project selection method?
Please share your insights below. Happy project planning!