Project selection is very important to effectively apply Project Portfolio Management (PPM) . For this reason, it is worth exploring the essential tools and techniques to choose the right projects for the portfolio. It is also useful to say that having an official process to set project priorities could not be enough for the success of a portfolio.
Methods and tools
Over the years, experts have identified the methods and tools for project portfolios selection. For instance, Taylor (2006) states that any model should have six attributes:
- ease of use
- ease of computerization
Meredith and Mantel (2009) share guidelines for choosing a selection model. In addition, they suggest to use the following categories to classify the required information:
- administrative and miscellaneous factors
Moreover, some other experts talk about the importance of the techniques, tools and methods for project selection and PPM. What they say can be summarized in three main points:
- To select projects, organizations use a combination of tools and techniques.
- Organizations usually use financial methods and sometimes they are not able to implement the best portfolios.
- To implement portfolios with good performance organizations prefer strategic approaches to financial methods.
Techniques and tools for project selection are also useful to evaluate quantitative and qualitative indicators for projects and programs.
Using the appropriate methods and tools for project portfolio selection is important. At the same time, it is also crucial to pay close attention to some other aspects that can influence the development of project portfolio. For instance, organizations need to pay attention to the competitions for resources and the temporary nature of projects.
Following are the results of a study aimed at determining the most popular assessment tools to achieve the three main objectives of PPM (Cooper, 1997):
- Value Maximization: Expected Commercial Value (ECV); Scoring Models; Productivity Index (PI).
- Balance: Bubble diagrams; Visual Models; Most Popular Dimensions: Risk vs. Reward, Ease vs. Attractiveness, and Breakdown by Market, Project Type, and Product Line.
- Strategic Direction: Scoring Model, Strategic Buckets, Strategic Check.
Keep in mind
To choose the right projects organizations need to use a combination of tools and techniques. Many are the methods and tools that companies can use for project portfolio selection. To create high-performance portfolios companies should prefer strategic approaches to financial methods.