LO4: Project Selection

Techniques
Learning Steps
4.1 Describe the project selection process.
4.2 Describe how projects are selected.
4.3 Discuss the characteristics of good selection tools.
4.4 Identify various project selection tools and techniques.
4.5 Analyze selection criteria to support decision making.
4.6 Describe how a simple or weighted checklist can be used to compare options and support decision
making.
4.7 Recognize other methods of project selection.

.
Describe Project Selection Process?

”
Project Selection: is the
process of evaluating,
prioritizing and choosing the
project the impalement
some of them so that
organization’s objectives can
be achieved
PMBOK 6TH Edition
Describe how projects are selected?

Need Business Project

Assessment Analysis & Starting
Case Chartered
Decision Project

Project Selection Process

Discuss characteristics of good
selection tool?
Selection tools can be:
 Quantitative (numeric KPI based e. g. profits, payback ROI etc.)
 Qualitative (non-numeric KPI based e. g. customer satisfaction etc.)
 Most often – its is a combination of both
 Tool should measure what is “really” important for organization
 It should be compatible to measure all projects on same criteria
 Tools should be simple to use across departments and knowledge base
 Project Selection Tools
We will explore
• Expert judgement
• Criteria and checklists
• Weighted criteria Use for Master Project
Project Selection Tools
Other models (we will not discuss them in details)
• Financial models
ROI
Cost Benefit
NPV (Net Present Value)
Payback period (Breakeven)
• Risk models
• Portfolio based (for example.: ensuring that portfolio is balanced b/w operational, strategic and
maintenance projects)
• Algorithms and electronic selection tools
Identify various tools and techniques
for project selection: Checklist

Pinto, Jeffrey K. Project Management : Achieving Competitive Advantage. Fourth edition. Boston: Pearson, 2016. Print.
Identify various tools and techniques for
project selection: Weighted ranking matrix

Source: Business Analysis for Practitioners, A Practice Guide by PMI

Analyze selection criteria to support
decision making
Selection Criteria:
 To agree on project selection, start by agreeing on the selection criteria.
 The criteria may be created by expert, external group or the executive team
 And then reviewed and approved by internal/external committees
 Criteria has to be approved by executive team (decision makers)

Decision Support
 Tools provide information, and information helps us make better decision
 No tool is perfect not and often together to get different perspective
 Management/executive teams can (and sometime do) ignore the tools and models
Decision support
• No tool is perfect and does not
override the decision-making
authority of management
• Often many tools are used to give
different views and perspective
and give more information to
support good decisions
The decision-making tools that you will learn here
can also be used when making life decisions,
Which school? Which car? Which job? Which
house? They can also be effectively used with
your project team or other groups when you need
to make decisions.
Weighted Scoring models
Speed
Cost Profit
to Low Risk TOTAL
Each criteria is rated on
Effective Potential a scale for each project.
Market
Rate each of these criteria from 1 -10 The scores are then
multiplied by the
Weight 3 5 5 1 weight and added to
Project A 5 3 6 10 70 get a total score for
each project.
Project B 3 7 5 3 72
Project C 7 4 7 10 86 Project A is completed
for you. Calculate the
Project D 10 3 10 8 103 rest and then check
87 your answers.
Project E 7 7 6 1 What projects would
you choose?
Project F 1 10 1 2 60

Example Calculation: Project A = (5*3) +(3*5) + (6*5) * (10*1)

Weighted Scoring models
Speed
Cost Profit
to Low Risk TOTAL
Effective Potential
Market
Rate each of these criteria from 1 -10
What if the group
Weight 3 5 5 3 decided that low risk
Project A 5 3 6 10 90 was more important to
them and raised the
Project B 3 7 5 3 78 weight to 3??
Project C 7 4 7 10 106
What projects would
Project D 10 3 10 8 119 you choose now?
Project E 7 7 6 1 89
Project F 1 10 1 2 64

Example Calculation: Project A = (5*3) +(3*5) + (6*5) * (10*3)