Project managers face multiple demands and must make tough decisions, like which projects need to be prioritized and which can be pushed down the ladder. And how do they make such calls? Should complex and sizable projects be first on the list? Or should a manager put quick-to-complete projects first? Is there a more effective way to make this call?
There is, and it’s called project prioritization. Project prioritization involves identifying the most important and value-delivering projects and prioritizing them on the project to-do list.
How do you prioritize projects? What are some real-life examples that can help you understand this tool? This comprehensive guide addresses all these and more.
Project prioritization is determining which projects or initiatives to focus on first based on their importance, impact, and feasibility. It involves making calculated decisions about how and where to invest limited time, resources, and money to maximize impact. By weighing factors like strategic alignment, potential benefits, and operational constraints, organizations can focus their efforts on initiatives that drive the greatest value.
At its heart, project prioritization is all about making strategic decisions. It involves assessing each project’s potential benefits and risks alongside other factors like long-term goals, available resources, timelines, and internal and external stakeholder needs and coming to a consensus.
In project management, there’s a fine line between project success and failure. Effective project prioritization is the key to crossing over to the project success bracket. According to a Project Management Institute (PMI) study, projects aligned and prioritized according to the company’s goals are 57% more likely to be successful. Consulting giant McKinsey shares the same thoughts. Their internal studies have reported that poor project prioritization can lead to organizations losing their touch and falling behind in the game.
Inefficient project prioritization can lead to the following:
On the other hand, effective project prioritization can help organizations focus on initiatives that generate the highest return on investment and value. Project prioritization allows companies to avoid distractions and work smarter and harder, empowering project managers to take control of their projects.
Key performance metrics (KPIs) and strategic alignment are required for successful project prioritization. Let’s explore why.
Where there is no clear alignment or connection between the organization’s strategic goals and projects, prioritization and project results suffer. The lack of criteria also makes it difficult for leaders to make judgment calls about what needs to be focused.
For there to be a harmony and sync, do the following:
KPIs provide data-driven insights, align tasks with strategic objectives, and optimize resource allocation. Carefully selecting KPIs that drive progress is crucial. KPIs should be closely aligned with overall business goals and regularly reviewed to ensure relevance and accuracy.
Key KPI categories for project prioritization include:
By monitoring these KPIs, organizations can make informed decisions, optimize resource allocation, and deliver successful projects.
There are multiple ways to prioritize projects; these are the most commonly used methods:
This prioritization method relies on the help of subject matter experts to guide the decision-making. In simpler terms, it means devising a rating scale from 1 to 5 and assigning the appropriate value to each criterion, such as risk, benefit, and feasibility.
The payback period project prioritization method focuses solely on the payback period, or the time it takes for an organization to recover the investment made in a project. Under this method, projects are prioritized based on how quickly they can return the investment.
This method uses a chart with two axes: an x-axis, which represents the scale of urgency and a y-axis depicts tasks that need to be prioritized. Some say this tool is similar to the Eisenhower matrix, but it includes more variables.
Project prioritization can be tricky, but here are our tips for using this tool efficiently and successfully:
Lock in your criteria before proceeding with prioritization. Choose metrics that reflect both immediate and future objectives, ranked by importance.
A few criteria you can consider are:
It’s also essential to be specific—for example, set a clear six-month timeline. This focused approach ensures a smooth, efficient decision-making process and helps resolve potential deadlocks. With well-defined criteria, your team can evaluate options and make informed choices aligned with organizational goals, confidently.
Use a prioritization framework to provide additional structure and a defined decision-making process. A framework, like the scoring method or project prioritization matrix, can build team consensus and guide future changes and discussions.
While all frameworks group and rank items, some go more in-depth than others. Therefore, choosing a framework that matches your prioritization goals is vital—will a simple or more complex method suit your organization’s needs?
When project priority levels are not immediately obvious or require additional insight, it’s advisable to get opinions from internal and external stakeholders. Involving relevant members will help you make informed decisions that are supported by most people.
How to decide which stakeholders to involve? Ask these questions:
The right technology can make projects more efficient and effective. A resource management solution is invaluable for streamlining project prioritization. They provide a comprehensive overview of available resources, project demands, and potential bottlenecks, enabling informed decision-making. Here's how:
Nothing is a permanent fix in projects and processes. Therefore, your prioritization framework and accompanying processes and technologies must be reviewed and adjusted. This will also prevent you from becoming complacent. By regularly reviewing your methods, you will understand if you are being most effective and productive—and diligently working towards your goals.
eRS, a resource management solution, provides a visual outlook of projects, resource usage, and financial metrics. This all-in-one tool helps you connect the dots between a project's moving parts. Managers can use the visual charts to identify bottlenecks, progress, and overall status.
What makes eRS stand out from its competitors is that it helps plan and manage projects. The software is customizable, and with a few clicks, you can go from seeing the big picture of projects to the tiny details. Features like Gantt charts, custom reports, capacity forecasting, and filters can help you prioritize projects according to your organization’s needs and goals.
Achieve better results with eRS. Don’t believe us, contact our team and get a free demo!
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