Following on from the last post, Overview on securing continued project funding. In this post I want to cover the tool that a PMO or organisation can use to help prioritise project demand when the demand far exceeds the supply and / or budget.
Challenge – too much project demand
Not unless you work for an organisation where there is so much cash that budgets are not an issue. In most cases, there will be too much project demand compared to the available budget.
Even if there is sufficient budget, there is then the added complication of what I call “doability”. What this means is, if you are given all the budget you have requested, can you really identify, interview, recruit and activate the required resources? Can the organisation take the amount of proposed change (you may not be the only person transforming the organisation)?
So if you can pass the “doability” test but you do not have enough budget, then the demand will have to be prioritised.
What is project prioritisation?
Very simply, it is the process of prioritising the different projects using an agreed criteria. The outcome being a prioritised list of projects that goes from the most important based on criteria to the least important.
Examples of criteria that an organisation can use vary but can include:
Mandatory V Discretionary
Regulatory V Business
Inflight V New
New V Enhancements
The list goes on and you can mix and match the options / criteria to suit the needs of your organisation. However, it is typically the regulatory or mandatory driven projects that will receive priority. Usually as it will enable an organisation to continue to operate in a given market and will keep the executives out of jail!
Too much demand for Regulatory / Mandatory projects
This is where it gets tough. What do you do if you have gone through the prioritisation process and all you are left with is the “must do” projects? They are all regulatory. Then the organisation has some really tough decisions to make.
The approach to try and address this is to use the approach of forced rankings. This is where you get every person / area to prioritise all of their regulatory / mandatory projects from most important to least.
Now of course there will be complaints that they are all equally important. This is why the sponsors need to agree a forced ranking as, even within the list some projects will have a higher impact if they are not done.
The PMO is well placed to set the rules for forced rankings and then ensure that every area complies and plays fairly!
As part of the forced ranking, it is important to capture a clear explanation on what is the impact if the project is not completed in the next time period. This will help assess the impact of not doing a given project.
WARNING: The PMO should always review, challenge and test the reason as, some sponsors or project managers try to “game” the system and the impact is either not as drastic or only a small part of the proposed project is actually mandatory. It is important to flush this out as projects that really need to be completed may lose out!
What if they refuse to force rank?
A good question. The sponsor states all are equally important. Then ask them to simply list the projects in alphabetical order if there is no way to decide. It is surprising how many will not do this and provide a forced ranked list.
Summary
While a blunt tool, using forced ranking is effective when tough decisions need to be made. It allows for the proposed projects to be ordered based on drivers in a non-emotive way.
