Strategy Execution Blog

Project Prioritization – a hot topic

Posted on

We’re having a number of discussions with customers and prospects around project prioritization. Although this is by no means a new concept, it is getting a lot of attention right now. The reasons for this are fairly obvious – there’s not a lot of resource available in most businesses to waste on projects that are not going to deliver focused benefits that are clearly linked to the company strategy. This post will explore the related issues.

Project prioritization and strategy

Very few organizations have the luxury of committing to a range of projects without having an effective way of prioritizing these. One could argue that this issue is more likely to be experienced by organizations who are relatively immature in their operational excellence or strategy execution journey. We’re not necessarily finding that. As companies continue to look to cut waste, improve efficiencies and improve the effectiveness of their strategy processes, project prioritization has become a hot topic. Essentially, the challenge is to make the right decisions for project investments with regards budget and resource allocation as well as alignment with and support for strategy. Effective project prioritization requires the establishment of a governance structure to ensure adherence to an agreed policy and process for prioritization. Often, a prioritization matrix is used to rank projects. What we’re seeing now is that the alignment with the strategy and demonstrated impact on the achievement of strategic objectives are the most critical factors for project selection. Of course, most organizations will choose different criteria within their prioritization matrix, but strategic alignment is critical.

It’s important to realize that the filtering process should start with idea generation for projects. Even at this early stage, ideas need to be filtered and evaluated by a clear set of criteria so that those that are not going to have sufficient impact on the business success will never come to life. Importantly, a prioritization matrix does help to take some of the emotion out of the process. It also provides a consistency in related decision making that should become respected – if not immediately, then over time. Of course, project prioritization also means that tough decisions have to be made. This might include closing down a high profile project if it is not delivering or no longer directly supports the strategy.

In practice the process often filters in increments. A large number of prospective projects can be quickly excluded based on the agreed criteria. This provides sufficient time and focus for the evaluating team to then discuss the remaining contenders in greater depth and to take a deeper dive into the benefits and resources required. The ability of the i-nexus solution to fully support complex organizations through this process is another reason for the growing demand for the solution.