PROJECT SELECTION; How to do it effectively

By JB Nartey · Jul 3, 2020
Project selection; how to do it effectively picture

•A project is an investment choice/decision made amongst several competing investment opportunities.

•A project presents an opportunity cost

•The proper choice of projects is crucial to the achievement of the organisational strategic goals and objectives and its survival in the long run.

PROJECT SELECTION GOAL

•Select project or portfolios that are aligned or contribute to the project org.strategic goals and priorities

•Select a project or portfolio that will give us a quick win and high strategic impact

•Selected project or portfolio that is aligned or contribute to project org.strategic goals with high priority if you want your project or portfolio to obtain high level management support, attention and empowerment

PROJECT SELECTION PROCESS 

•Project is a systematic process of evaluating or appraising proposed projects  or a set of projects and then choosing to implement some set of them so that the objectives of the parent organisation will be achieved.

•Examples

•A manufacturing firm have to use evaluation/selection  techniques to choose which machine to adopt in a part fabrication process 

•A TV station can choose to select which of the several syndicated comedy shows to re-run in its 7;30pm weekly time slot

•A construction firm must make a decision on the best subset of projects  out of a large group of potential projects to bid for.

 

PROJECT SELECTION COMMITTEE- MEMBERSHIP

•Snr Management

•Municipal Council

•Board of Directors

•CEO/MD

•Project Sponsors

•PMO

PROJECT SELECTION CRITERIA OR GUIDELINES

•A project is unique and its selection must also carry some level of uniqueness

•Dependent or varies with the type/nature of project.

•Just as there is a huge variety of projects the same is the selection criteria

•Project Selection Criteria/Guideline can be developed for a specific class or category of projects

•Examples;

•Greenfield Projects & Brownfield Projects

•Compliance Projects

•Environmental Projects

•Health & Safety Projects

•Continuous Improvement Projects

•Infrastructure Projects 

•Project Selection Criteria/Guideline is Informed by the Org.Strategic Goals & Objectives

PROJECT SELECTION METHODS/TOOLS-NUMERIC  METHODS 

•Scoring Models

•(Project Scoring in terms of desirability and capacity/output)

•Analytical Hierarchy Process( Hierarchical Project Scoring)

•Score Level 1; R&D Cost, Capital Cost, Manufacturing Cost

•Score Level 2; Cost, Probability of Success,

•Final Score Level 3; Strategic value/Expected Value

•Economic Methods

•EIRR,

•Socio-Economic Impact(VOC,Employment,poverty reduction,disease reduction),

•Macro-Economic Impact(Trade Deficit,GDP)

•Financial Models _Pay Off Matrix/Decision Tree Models

•(Cost, Cashflow, IRR,NPV,ROI,Payback Period)

•Real Options Approach

•ID Risks Profile/Volatility (Market, tech, funding, resources, competition,price changes  etc)

•Select a portfolio of projects that can offset the risks on the downside(Put Options Projects) and capitalise on the positive risks on the upside(Call Options Projects)- Portfolio Balancing

PROJECT SELECTION METHODS/TOOLS-NON-NUMERIC METHODS 

•Sacred Cow

•Senior Management or Powerful Org Official’s Suggestion.

•Full Support of Snr.Management 

•Operating Necessity

•Projects selected based on absolute operating necessity eg. The threat of floods, New innovative technology

•Competitive Necessity;

•Modernisation & Restructuring & Improvement projects based on current trends “A new kid on the block”

•Product Line Extension- A project to introduce a new product line into the portfolio based on market demands

•Comparative Benefits(Impact) /Sustainability Analysis- A project selected based on the benefits and the benefits sustainability.

•I.S.L.E.E.F.M.P.T. Benefits or Impact

 

WhatsApp the PM GURU on +1 317 629 3820 if you want to know more about this topic 

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