STRATEGIC SELECTION OF PROJECTS - Strategic Planning for Project Management

What a company wants to do is not always what it can do. The critical constraint is normally the availability and quality of the critical resources. Companies usually have an abundance of projects they would like to work on but, because of resource limitations, they have to develop a prioritization system for the selection of projects.

One commonly used selection process is the portfolio classification matrix shown in Figure below.

Portfolio classification matrix:

Portfolio classification matrix

Each potential project undergoes a situational assessment for strengths, weaknesses, opportunities, and threats. The project is then ranked on the nine-square grid, based upon its potential benefits and the quality of resources needed to achieve those benefits. The characteristics of the benefits appear in Figure below, and the characteristics of the resources needed are shown in Figure below.

Potential benefits of a project:

Potential benefits of a project
Characteristics of the resources needed to achieve a project’s benefits:

Characteristics of the resources needed to achieve a project’s benefits:

This classification technique allows for proper selection of projects, as well as providing the organization with the foundation for a capacity planning model to see how much work the organization can take on. Companies usually have little trouble figuring out where to assign the highly talented people. The model, however, provides guidance on how to make the most effective utilization of the average and below average individuals as well.

The boxes in the nine-square grid can then be prioritized according to strategic importance, as shown in Figure below. If resources are limited but funding is adequate, the boxes identified as “high priority” will be addressed first.

The nine-square grid in Figure below can also be used to identify the quality of the project management skills needed, in addition to the quality of functional employees. This is shown in Figure below. As an example, the project managers with the best overall skills will be assigned to those projects that are needed to protect the firm’s current position. Each of the nine cells in Figure 9–17 can be described as follows:

Strategic importance of projects:

Strategic importance of projects
Strategic guide to allocating project resources:

Strategic guide to allocating project resources

  • Protect position (high benefits and high quality of resources): These projects may be regarded as the survival of the firm. These projects mandate professional project management, possibly certified project managers, and the organization considers project management as a career path position. Continuous improvement in project management is essential to make sure that the methodology is the best it can be.
  • Protect position (high benefits and medium quality of resources):Projects in this category may require a full-time project manager, but not necessarily a certified one. An enhanced project management methodology is needed with emphasis on reinforcing vulnerable areas of project management.
  • Protect position (medium benefits and high quality of resources):Emphasis in these projects is on training project managers, with special attention to their leadership skills. The types of projects here are usually efforts to add customer value rather than to develop new products.
  • Line management project management (high benefits and low quality of resources): These projects are usually process improvement efforts to support repetitive production. Minimum integration across functional lines is necessary, which allows line managers to function as project managers.These projects are characterized by short time frames.
  • Build selectively (medium benefits and medium quality of resources):These projects are specialized, perhaps repetitive, and focus on a specific area of the business. Limited project management strengths are needed.Risk management may be needed, especially technical risk management.
  • Team leaders (low benefits but high quality of resources): These are normally small, short-term R&D projects that require strong technical skills.Since minimal integration is required, scientists and technical experts will function as team leaders. Minimal knowledge of project management is needed.
  • Part-time project management (medium benefits and low quality of resources):These are small capital projects that require only an introductory knowledge of project management. One project manager could end up managing multiple small projects.
  • Part-time project management (low benefits and medium quality of resources):These are internal projects or very small capital projects. These projects have small budgets and perhaps a low to moderate risk.
  • Part-time project management (low benefits and low quality of resources):These projects are usually planned by line managers but executed by project coordinators or project expediters.

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