Three simple questions for project selection

Art & Blue Sky By Phil Roeder on flickrNeil Pearce just published a very nice piece titled “It is all about The Customer“.

Go read it.

In the article, Neil argues that IT needs to focus on projects that focus on The Customer.   He writes:

Too often we in the IT department are seen as being out of touch by other people within the business and make strange decisions where we do IT for the sake of IT are often at the heart of it. This doesn’t mean that you don’t experiment to learn if something has value, but does everybody really need the latest iPad to figure out if it has a business benefit? Technology is great but it is an enabler to make lives better for Customers and profits for the business. We need to and must want to use our technology, process and people skills to make better products and generate wealth for our investors.

Emphasis is Neal’s…but I would have emphasized the same things 🙂

I wrote a comment on the post that I thought worth sharing and expanding on here.  A snippet of what I wrote is:

At a previous client of mine, I helped them come up with the following three questions for deciding whether a project gets the green light (or the red light if its already started).

1.) Is the project needed for base infrastructure? Note: These are the ‘un-sexy’ projects that must be done to ‘keep the lights on’.

2.) Does the project help us meet one of our strategic goals? How?

3.) Does the project deliver real, measurable, value to the customer? How?

Using those three questions helped my client cut back on a lot of pet projects and non-essential projects. In fact, those three questions led to the hiring of more IT staff because there was more budget available for the necessary projects.

My three questions above are simple and simplistic by design.

Too many times we tend to get wrapped around complex systems and processes, especially when making decisions about what project to fund. Too many times politics comes into play in those decisions as well.

The above three questions worked (and still work) for that client because they understood the value of simple rules and everyone in the organization (at the highest and lowest levels) believed that these rules were worth following.

I’ve seen many projects get funded because they were the pet project of someone on the leadership team…but the project had zero affect on the ability of the business to deliver value, revenue and profit.

With these three simple questions, and the fortitude to follow them, this client was able to cut back on those pet projects and focus strictly on those that were absolutely critical to the company and its clients.

By focusing more on the critical projects, a side benefit was realized for the IT group – the IT budget started to grow instead of shrink as the business realized that the money spent (wasted) on pet projects could be better spent on improving IT capabilities.  Needless to say…the CIO was happy. He was able to increase staff and implement training programs again…something he hadn’t done in many years.

All because they started asking three simple questions.

Photo credit: Art & Blue Sky By Phil Roeder on flickr

Project Selection using Decision Support & Optimization Techniques

This post is an excerpt (with slight modifications) of a recent paper titled “Project Selection using Decision Support Optimization Tools.” If you’d like to read the full paper, click here for the PDF version of Project Selection using Decision Support Optimization Tools.  The full version of the paper has full details of the LINGO model used for decision support and project selection optimization.

During good times and bad, selecting the proper projects to undertake is an extremely important activity for organizations.  Selecting the right projects  (or wrong ones) can be the difference between success and failure for most organizations.  The process of selecting projects and managing the project portfolio, formally called Project Portfolio Management, can help organizations get a grasp on their projects and the risk & benefits associated with those projects [1].

Project Portfolio management and selection has become an important part of most organization’s project management activities. By managing their project portfolio’s correctly, organizations can gather information about all projects, prioritize those projects and manage the selected projects throughout the project lifecycle.

The remainder of this paper provides an overview on project selection and describes a prototype system that can be used to optimize the selection of projects.  The project selection prototype uses optimization techniques to select the optimal number of projects based on given criteria.

[Read more…]

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