Presentation on theme: "Project Selection and Portfolio Management (Which project should be supported?) (How can we manage simultaneous projects?)"— Presentation transcript:
Project Selection and Portfolio Management (Which project should be supported?) (How can we manage simultaneous projects?)
Project Selection Selection models (or guidelines) help managers pick winners from a pool of projects. Screening models are numeric or nonnumeric and should have: Realism: reflect constraints and organizational goals Capability: widely useable, robust Flexibility: easy to modify Ease of use: useable by many organizational members Cost effectiveness Comparability
Numeric or not Numeric models: –Objective, external values –Subjective, internal values Nonnumeric models: –Rely on qualitative data
Screening & Selection Issues (sub-issues in Table 3.1) Risk – unpredictability to the firm Commercial – market potential, financial issues Internal operating – changes in firm operations Additional – image, patent, fit, etc. All models only partially reflect reality and have both objective and subjective factors imbedded.
Checklist Model A checklist is a list of criteria applied to possible projects. Requires agreement on criteria Assumes all criteria are equally important Assumes that there are only a few number of criteria Checklists are valuable for recording opinions and encouraging discussion.
Simplified Scoring Models Each project receives a score that is the weighted sum of its grade on a list of criteria. Scoring models require: agreement on independent criteria agreement on weights (relative importance) for criteria a score assigned for each criteria Relative scores can be misleading!