Prioritization of Projects
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We recently created an IT Steering Committee for our company to help us better in achieving the company’s strategic plan. The Steering Committee is comprised of the managers from each of the business units, the CIO, and the CFO. One of the first initiatives that came out of the first meeting was getting the IT department project portfolio under control.
Background
Upon the review of our current portfolio, we discovered that there are 100 outstanding IT projects in various states of completion. The projects are not all the same size and many of the projects are small changes to existing systems that are being accomplished outside of the normal project approval process.
Prioritizing Projects
All projects must be thoroughly considered in terms of Necessity, Opportunity, and Desirability. The business issues that the projects will address must be evaluated in terms of
1. Impact on the Organization
2. Likelihood of Occurrence
The projects that address business issues with hang organizational impact and are most likely to occur should receive initial attention from the steering committee.
Another method of prioritizing projects is according to risk. It uses classifications of “high”, “medium”, or “low” risk within categories of organizational impact, development effort, technology and organizational capability. One of the most important categories of this technique is organizational capability. Priority should be given to the projects having characteristics of:
1. Highest impact on the firm
2. Highest likelihood of occurrence
3. Lowest combined attributes of risk
4. Least resources demanded
5. Highest anticipated return
Recommendation
Base on the criteria given above and the assessment of the data provided below, I recommend giving priority to the following projects:
1. Projects that are in the final phase before turning them over to the users
These projects require the least resources. The total man-hours to complete is 300 and the project size in dollar is 50,000 to 100,000. These projects also have the highest impact on the organization, highest anticipated return and highest impact on the users.
2. Network infrastructure upgrade
This project is also vital and has a big impact on the organization and users as well. The total man-hours required is 500 and the project size in dollars is 50,000 – 100,000. This project also has a big potential to generate favorable return as it aims to improve the company’s services.
Project Size (Dollars)
Number of Projects
Life Cycle Stage
Man-Hours to Complete
Notes
Over
million
1
(CRM application)
Testing
1200
This project was outsourced to software vendor. We are involved in less than 20% of the remaining man-hours.
0,000 to
million
0
.
0,000 to 0,000
1
(Database Consolidation)
Requirements Discovery
200
The man-hours to complete are only for requirements discovery. Man-hours for the remaining project life-cycle will be estimated at the end of requirement discovery.
0,000 to 0,000
1
(Web Portal)
Code design
500
See the information following this table for an explanation of the changes for this project.
,000 to 0,000
2
Implementation
300 total
These are projects that are in the final phase before turning them over to the users.
,000 to 0,000
1
Procurement
500
Network infrastructure upgrades to support Web portal.
Less than ,000
95
Various
9500
Most of these projects are “unofficial” and consist of minor upgrades to existing applications.
Evaluation of Projects: Real Option Evaluation
The projects must be evaluated using the Rapid Application Development (RAD) Technique. The projects will be broken down into smaller deliverables, or chunks, employ elements of the real options approach. The implemented projects must be properly assed by the evaluation team. At the end of the first deliverable, the team can asses the options of whether to deploy the first part, expand it to a second part, or abandon it. If it is deployed, the organization can immediately obtain the benefits of the function provided. If the option to expand the project is selected, the evaluation team should prioritize what function will be included. After the second part is deployed, the team can again asses whether to deploy, expand, or continue with additional function. This approach has an additional benefit in that it helps manage the demand to change requirements that occurs, it should be deferred to a subsequent release. Effective prioritization of function to include in a release will provide a faster payback. This approach will provide the company with the opportunity to provide and demonstrate wins that are fast, frequent, and meaningful.
Credit:ivythesis.typepad.com
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