Stakeholders have various motivations within a single organization, and they are sometimes at odds. That means competition in project prioritization. How do you know which are the right projects to move forward?
When you prioritize and communicate your approach successfully, you will achieve alignment and make better decisions based on which projects matter most. Strong project prioritization is good for everyone: your team, your stakeholders, and your organization. Poor prioritization or lack thereof is bad for morale, project success, and your business goals. A lack of clear priorities is one of the top three challenges impacting successful strategy execution, according to Gartner.
But how do you prioritize projects successfully?
Here, we will discuss actionable prioritization techniques and strategies, tools to simplify the process, and best practices for consistency. We will also look at project prioritization examples in the real world.
What is Project Prioritization?
Project prioritization is exactly what it sounds like: the process of ranking projects based on their importance, value, and alignment with organizational goals. It’s essential to consider project priority and use a variety of established techniques to ensure you’re maximizing efficiency and resources and deriving tangible benefits from your projects.
Why Project Prioritization is Essential in Portfolio Management
Using prioritization methods in a portfolio context is invaluable. In a project portfolio, you must ensure that every project aligns with organizational goals. But not all initiatives are equivalent or need to be addressed at the same time. Moreover, as anyone who has managed complex projects simultaneously knows, changes to scope, timelines, and resources will happen. With prioritized projects, everyone from stakeholders to individuals knows where to focus, or refocus, their efforts.
With so many moving pieces, you must use prioritization models and methods to manage multiple projects at once. That way, when change inevitably occurs, everyone is aligned and can make better decisions based on which projects matter the most. Resource managers can shift staff to help a project or resolve a bottleneck, project managers can collaborate with each other to ensure that timelines don’t conflict, and individuals know where their time is adding the most value.
Aligning Project Prioritization with Strategic Goals
Let’s say you’re spearheading digital transformation at your organization. This is a huge undertaking that involves numerous projects. The larger strategic goal is to usher your organization into the modern era, ensuring greater efficiency, compliance, and cost savings, and better serving your consumers. How can you reach your overarching objectives? By prioritizing the smaller projects that contribute to them.
The main purpose of project prioritization is to align it with your strategic goals. By ensuring that the various projects within your portfolio contribute to your objectives, you’ll keep the focus on your most valuable projects. That way, you’ll achieve better resource allocation, safeguard project timelines, and avoid common project pitfalls like overallocation.
There are three main steps involved in this:
- Define Strategic Goals: Clarify organizational objectives and vision.
- Link Projects to Goals: Map each project to one or more strategic goals.
- Prioritize Projects that Drive Goals: Rank projects based on their alignment with top strategic goals.
Each project and portfolio will have its unique subtasks and steps. However, this general outline will inform most initiatives.
4 Signs of a Broken Project Prioritization Process
Failing to understand all the projects you and your team members are juggling and their impact on your larger goals is one of the biggest rookie mistakes you can make as a leader. If you’re unsure of whether you have a project pipeline that needs fixing, take a look at these signs that your prioritizing techniques are lacking or in need of repair:
- Frequent Project Delays: Projects often miss their deadlines, indicating misaligned priorities.
- Resource Overload: You or your team members are consistently over-allocating key resources.
- Misalignment with Strategic Goals: Projects don’t align with the organization’s vision or objectives.
- High Project Failure Rates: Many projects aren’t delivering expected results.
- Too Many Conflicting Needs: Projects that depend on other projects aren’t linked or accounted for properly.
Resolving these problems requires identifying the root cause and beginning the troubleshooting process, outlined in detail below.
Steps to Start Prioritizing Projects in a Portfolio
Prioritizing projects in a portfolio is a multistep process that involves alignment with objectives, strong communication, and careful execution. Here’s how to prioritize multiple projects.
Step 1: Define Portfolio Objectives
A lack of clear goals and vision is responsible for 37% of project failures. That’s why you must initiate the prioritization process by establishing goals for your portfolio, such as growth, cost efficiency, or customer satisfaction. By taking this step, you’ll ensure that project prioritization aligns with your organization’s strategic direction.
Step 2: Identify and Engage Key Stakeholders
Which stakeholders should be part of the prioritization process? Determine whether executives, project managers, department heads, and/or others should be involved. Account for external stakeholders as well, such as customers or constituents. Once you know who the stakeholders are, start engaging them earlier to gain balanced perspectives and achieve alignment.
Step 3: Establish Strategic Alignment for the Process
Facilitate a shared understanding of how project prioritization supports your broader business strategy. By establishing strategic alignment for the process among stakeholders, you will minimize conflicting priorities and foster buy-in.
Step 4: Define the Scope of Prioritization
Specify the projects, departments, and budget areas that are included in the project scope. This will help you keep the process focused and manageable.
Prism PPM submitted requests and datapoints used for prioritization.
Step 5: Set Clear Evaluation Criteria
Evaluation criteria are essential for determining the success or failure of the overall project and its components. Consider factors such as:
- Strategic Value: How well does the project align with your strategic goals or mission?
- ROI (Return on Investment): What is the projected financial return?
- Risk Level: What is the risk associated with the project?
- Urgency: Does this project have a time-sensitive deadline?
- Resource Requirements: Are the necessary resources available?
- Dependencies: Is this project a driver for strategic work, and what are the consequences of deprioritizing it or not completing it at all?
Step 6: Assign Weights to Each Criterion
These criteria aren’t equally important. Assign different weights to each criterion based on what you value most in your organization. For example, perhaps ROI is a high priority for you. In that case, you should assign it a higher weight than the other items on the list.
Step 7: Choose a Prioritization Framework and Scoring System
Select a prioritization framework such as MoSCoW or a weighted scoring model to rank your projects. Prism PPM’s customizable BVA tool can also assist in project prioritization; new projects are scored based on criteria like financial impact and given a weighting. Use a consistent framework and scoring method across portfolios to ensure that your prioritization approach is objective and structured.
Prism PPM business value scorecard used for comparison and prioritization.
Step 8: Score Each Project Against Criteria
Score each project based on how well it meets each criterion. Multiply each score by the weight you’ve assigned it before adding up the totals for a total score that reflects each project’s priority level.
Step 9: Rank and Validate the Prioritized List
Rank each project based on these total scores. Present the list to stakeholders, review the projects together, and collect feedback. From there, you can make any adjustments to finalize the prioritization of your portfolio.
Step 10: Communicate and Execute the Plan
Communicate the finalized list with all relevant teams, outlining the next steps for the highest-priority projects. Assign teams to various projects and begin executing top-priority initiatives, ensuring ongoing visibility among team members and stakeholders.
Effective Frameworks and Models for Project Prioritization
There are several existing prioritizing techniques for streamlining your workflows. Here’s how to prioritize projects using an established framework:
MoSCoW
The MoSCow acronym stands for:
- Must have
- Should have
- Could have
- Won’t have
This prioritization method refers to what you need to successfully complete a project.
Eisenhower Matrix
The Eisenhower Matrix categorizes projects based on urgency vs. importance. Using the project prioritization matrix, you divide your tasks into four boxes based on these dimensions. Then, you can determine which projects you must address immediately (DO), which you can schedule for a later time (SCHEDULE), which you should delegate to someone else (DELEGATE) and which can be removed from your to-do list (DELETE).
RICE
The RICE model helps rank projects according to their potential reach and impact. The acronym stands for:
- Reach
- Impact
- Confidence
- Effort
Project managers perform calculations related to each item listed above to rank projects or processes within a project to determine next steps.
Weighted Scoring Models
For a flexible approach to project prioritization, use weighted scoring models. These models involve assigning levels of importance (weights) to projects. Using a numerical value or score, you can quantify the relative importance of each project and rank them accordingly.
Project Prioritization Matrix
A project prioritization matrix is a visual tool used for comparing projects across multiple criteria. These criteria, such as impact vs. effort, are plotted on a grid so decision-makers can quickly identify high-priority projects that provide maximum impact with minimal effort. The Eisenhower Matrix is one type of project prioritization matrix.
Addressing Resource Constraints in Project Prioritization
One of the main challenges in project prioritization is resource constraints. How can you resolve this problem?
Challenges of Resource Constraints
Many businesses have resource limitations, such as limited staff, budget, or time. These constraints all impact project prioritization, and recognizing them is essential to avoid overcommitting and ensuring that high-priority projects receive the required resources.
Strategies for Managing Resource Constraints
These strategies will help you manage resource constraints and ensure you have everything you need to prioritize projects effectively.
- Capacity Planning: Assess current resource availability to determine feasible project commitments and adjust priorities accordingly.
- Resource Leveling: Evenly distribute workloads across projects to prevent resource overload and ensure steady progress on high-priority tasks.
- Resource Forecasting: Anticipate future resource demands and adjust project priorities proactively to maintain alignment with capacity.
Tips for Balancing Resources Across Projects
These steps will help you balance and allocate resources to prioritized projects, ensuring that high-impact projects have the necessary support without straining your organizational capacity:
- Evaluate and research the scope of the projects.
- Determine which resources are currently available and which ones are missing.
- Evaluate where resources are being overextended or overutilized.
- Delegate team members to the projects or tasks that best leverage their skill sets.
- Use project prioritization tools like Prism PPM to evaluate and visualize resource allocation needs.
- Communicate extensively.
- Collect data about how you are expending your resources.
- Monitor your resources and adjust your strategy accordingly.
- Be realistic about the resources you need and how you will use them.
- Always be aware of the state of your resources.
Best Practices for Consistent and Effective Project Prioritization
Establish a Regular Review Process
Schedule regular times to review your project priorities. Having a consistent review process ensures that prioritization is aligned with evolving business goals and resource availability. These reviews will allow you to gather feedback from stakeholders and adjust your project rankings as needed.
Leverage Visual Tools for Transparency
Use visualization tools, such as dashboards or project prioritization matrices, to give stakeholders clear visibility into the prioritization process. This transparency fosters accountability and encourages stakeholder engagement.
Engage Stakeholders Continuously
Keep stakeholders apprised of your efforts throughout the prioritization process. Regular check-ins and feedback loops help maintain alignment and ensure that all perspectives are taken into account. This leads to more informed prioritization decisions.
Document Lessons Learned
After completing each prioritization cycle, reflect on and document insights and lessons learned. This documentation will serve as a valuable resource for improving future prioritization efforts and avoiding previous mistakes.
Encourage Adaptability
Foster a culture that embraces adaptability in project prioritization. Encourage teams to be flexible in their approach and pivot quickly in response to changing organizational needs or unexpected challenges.
Utilize Metrics for Continuous Improvement
Define KPIs related to project outcomes and resource utilization. Continue to analyze these metrics to evaluate the effectiveness of the prioritization process and make data-driven adjustments to your prioritization process.
Prism PPM: The Essential Tool for Project Prioritization
Prism PPM enhances project prioritization, offering a variety of features to help you track, manage, and automate the process from start to finish.
Our platform adapts to a variety of project management philosophies and methodologies, including Agile, Waterfall, or hybrid approaches. Through resource management, real-time reporting, tracking and visibility, and scoring and ranking features, you can customize your project management prioritization strategy and adjust as your needs evolve.
Conclusion
Not all projects in a portfolio or program are equally important. Still, each project must be considered and given the attention it needs to succeed. Project prioritization is critical for ensuring your projects align with your objectives and helping you meet your strategic goals, as well as ensuring that everyone involved knows where they should be directing their efforts.
Explore Prism PPM’s platform to see our built-in features for effective and efficient project prioritization and portfolio management.