Project prioritization is the process of determining which potential and existing projects are most urgent and important. This process involves evaluating the criteria most relevant to your business and applying them to all your projects.
You can prioritize projects by potential return on investment (ROI) or by how critical each project is to the department. For example, projects related to production infrastructure or web security may be highly rated. All companies have unique needs that require unique prioritization strategies.
Many organizations struggle with prioritization because all projects have a degree of urgency and importance. The best strategy is to create a strategic planning framework so that you can easily incorporate company goals and priorities into the priority setting process.
Project prioritization ensures that you properly allocate company resources based on your unique needs. By prioritizing tasks, a company can utilize the time and money it spends on less urgent and important projects.
A 2016 Project Management Institute survey found that only 52 percent of projects met their original goals and business intent when project management culture was a low priority. However, this number increased by nearly 20 percent when companies prioritized a project management culture. Project management and project prioritization are critical to project success.
The project prioritization process is essential to maintain consistent criteria across the portfolio and to address the organization’s specific needs and goals. Here are the basic steps for prioritizing your project list:
- Create a list of projects: Create a list of potential and existing projects. Consult with senior managers, department heads, and project leaders to ensure you accurately assess the company’s project needs.
- Organize projects according to a clear priority level: In some cases, the priority of the project will be obvious. “Prioritizing your projects involves creating a list of individual projects and then separating the urgent and important ones so you know immediately what you need to focus on,” suggests Trevor Larson, co-founder and CEO of Nectar.
- Establish priority criteria: If project priority levels are not immediately obvious, determine priority criteria based on your company’s specific needs and goals.
- Analyze and Evaluate Tasks: Apply these priority criteria to your projects to determine the urgency and importance of each and rank them accordingly. You might consider using a matrix or template to help you prioritize. Prioritization templates are useful tools to help you make decisions and help you track your prioritization process. There are also specific details on prioritizing IT projects, which can be useful if you’re trying to prioritize projects for IT-focused teams.
To fulfil the requirements of the stakeholders, the requirements should be prioritized so that they can be fulfilled according to the priority
Request queuing techniques are as follows:
This is a well-known technique for determining what is necessary for stakeholders. It is quick and easy to use, but its ability to accurately categorize stakeholder requirements is limited. For this reason, it is best suited for less complex projects.
MOSCOW is an acronym (with an added o to make it easier to remember) for the following stakeholder requirements:
Must have – critical elements without which the project could not succeed.
It should have – essential elements that could affect the success of the project.
It could have – “nice to have” elements that are not essential to the success of the project.
It will not have – other elements that can be removed.
The Kano model is based on the assumption that end-user satisfaction with the final output of a project is related to the available features and functions. The level of fulfilment is usually determined through a standard questionnaire. The model divides elements into four separate categories:
Performance – Ease of use and speed are typical measures of performance
Must be – these are the qualities that are the basic expectation
Attractive – not necessarily expected, but features that are a bonus
Indifferent – these properties are neither necessary nor lacking in their absence
Net Present Value:
Net present value refers to the difference between the amount of money now and the value of money at a future date. When it comes to prioritization, projects with a higher NPV are preferred. Cash today is worth more than cash in years to come. This means that projects with longer lifetimes may have a lower NPV than projects with shorter lifetimes.
The payback period refers to the time required to pay back the investment in the project. It is calculated by dividing the project costs by the average annual cash flows. Using this formula helps the PMO determine which of the projects will get the initial investment faster. However, only using this method to prioritize projects is reductive because it does not include project implementation risks or the time value of money.
The scoring model is a flexible way of prioritizing projects. Scoring criteria can be tailored to your PMO’s values and needs, and the process can be as informal or thorough as needed. The procedure is as follows:
Select three or four evaluation criteria (e.g. benefits, size, risk, impact, margin, cost, feasibility)
Assign ranges to project evaluation criteria (e.g. 0-5 or 0-10)
Assign a weight to each category (e.g. risk may be a more important deciding factor than impact)
Test the model with different business units to assess whether the model provides meaningful results
Project prioritization is important because it ensures that you are properly allocating company resources based on your unique needs. By prioritizing tasks, the company can minimize
money and time, it spends on less urgent and important projects. By prioritizing projects, the individual understands the priority of the project and the project can be implemented based on the priorities. The most important project
they can be done based on priority and less important projects can be done with lower priority. Prioritizing projects helps companies implement projects in less time with minimal resources. Hence project prioritization is important.