A pre-defined selection process should always provide a robust basis for justifying and selecting all projects.
After reading this article, you’ll be able to:
- understand the process of project selection
- describe how a project becomes part of an organization portfolio.
Project Selection: Definition
Project selection is the decision of which project to undertake via a formal process for choosing only those projects that meet:
- the organization’s strategic goals
- any set financial and non-financial criteria.
Even if most organizations still decide what project to invest in almost entirely on short-term financial benefits, it’s important also to consider long-term strategic objectives—also known as strategic planning.1
2017 “State of the CIO” survey reported a shifting focus to strategic challenges.2 The 16th annual study conducted by CIO Magazine found that commitment to strategic endeavors gained more prominence as CIO’s top priority.
Commitment to strategic endeavors gained more prominence as CIO’s top priority.
Examples of activities involved in this trend include driving business innovation (cited by 33% of CIOs in 2017 compared to 26% in 2016) and identifying opportunities for competitive differentiation ( 21% in 2017 vs. 16% in 2016).
Top managers are usually responsible for these types of business decisions. But project managers can provide valuable insight, and portfolio managers can help organizations select and analyze projects supporting strategic goals.
Selecting the Right Project
Project selection is the first task completed in a project life cycle.
Organizations often follow a detailed process for project selection. Three common steps are:
- Establishing whether all potential projects meet a predetermined cluster of criteria.
- Narrowing down the list of potential projects to an approved portfolio of projects for implementation.
- Identifying the order in which the projects are completed by conducting a score or priority assessment.
Many methods exist for assessing whether to move ahead with a project, but it is crucial that a formal, documented process is in place as guarantee that all projects are treated equally.
1 Project Management Institute (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide). 6th ed. Newtown Square: Project Management Institute.
2 IDG Enterprise (2017). State of the CIO 2017: Executive Summary. Retrieved from http://core0.staticworld.net/assets/2017/02/20/state_of_the_cio_exec-summary_2017.pdf