Small Business Blog from Atlantic Canada

I am "CA" Atreya (PMP, MBA), the author of this blog. I help businesses in Atlantic Canada achieve their BHAG successfully. You may subscribe to this blog using a feed reader (RSS).

How do you prioritize your projects?

Now that you have your business objectives that are measurable as defined by your strategy you need to look at the initiatives (programs) you need to undertake. Simply put, a program is a series of related or unrelated projects that further a certain goal.

Programs are different from your projects. Think of programs as a series of projects that leads to a desirable outcome. This desirable outcome is one defined in your business strategy. For example, if one of your strategic outcomes is to increase revenue by increasing your marketing efforts, you need to:

• Determine your product/service offerings you are going to focus on
• Determine the price points that you are going to charge
• Determine the distribution channels
• Determine the promotional channels

The above list is not exhaustive, but just gives you an indication of what project portfolio your program might consist of.

Just to drive home the point, the program is a portfolio of projects designed to achieve your organizational goal (strategy). Having a good program management also ensures your resources are prioritized and aligned.

With a program portfolio in place, you are now ready to tackle projects. Here is something you are not going to like to do: choose one project over the other. Seriously, did you expect to undertake all projects within your program within the same year? Resources are scarce – you need to come up with criteria to prioritize them. I prefer to use cash flow analysis to prioritize projects. Discounted cash flow include net present value, internal rate of return or payback period analysis. Either one will do as long as you are consistent evaluating your projects.

Here is a secret– it is only a handful of companies actually use these techniques to prioritize all their projects. Often an influential manager’s “pet project” becomes part of the project portfolio and this particular project may have a lower ROI than a project that did not make the cut. Watch out for this pitfall. Take an objective look at your projects in the pipe and evaluate them based on an objective yardstick – not someone’s “pet project”.

What you read here is not something I invented. These concepts have been there for quite a while now. But it is not the concept that will determine your success; it is the successful application of this concept that will drive your competitive advantage. Companies often plan and formulate their strategies with the best of the intentions, but woefully lack execution skills. Read more about strategy implementation.

Once you have your list of programs and projects ranked using some objective measure (like NPV, IRR or payback) you can then go on to implement your projects.

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