Annual Planning Process: Project Evaluations

The second step in the annual planning process is project evaluation.

Part two of a series.

In order to arrive at an objective and thoughtful decision about project investments, the project management office must lead the organization through a structured process of assessing, analyzing and scoring projects.

There are many methods and tools available to assist with this exercise.

Here are some best practices to consider when taking on project evaluation:

Define and Implement a Project Evaluation Process

Before starting the evaluation process, meet with senior executives to review the road-map. The goal should be to:

• Identify strategic drivers that are shaping organizational strategy.
• Define variables that key stakeholders consider important when assessing project candidates.

This step not only helps confirm that you are headed in the right direction, but it also helps senior management commit to the process before communicating it to project stakeholders.

1. Establish Evaluation Criteria

Develop criteria to score against all projects. That way you’ll have a quantitative way to express and measure organizational attributes that are deemed important.

Interview senior management to understand their priorities, such as:

• Importance of how internal departments interact and share information.
• Sensitivity towards impacting external relationships with customers and business partners.
• Tolerance toward risk and change.

2. Define Scoring Methodology

Not all criteria are equally important. Many organizations have weighted each criterion on a 10-point scale to define the balance between their short-term and long-term objectives, and external and internal focus areas.

3. Communicate Process

The successful implementation of a project evaluation process requires good documentation and communication. Standardize the process by creating a procedural document and templates that describe the project goals, scoring methodology, roles and responsibilities, and workflows.

To ensure an effective roll-out of the process and help maximize stakeholder buy-in, conduct information-sharing sessions where you review the procedure documentation, walk-through completed examples of the template to fully illustrate the process, and communicate the timeline.

Analyze Project Evaluation Results

The primary objective in this step is to organize and analyze the qualitative and quantitative evaluation results across multiple dimensions. Here are some of the recommended analyses and points of view:

1. Alignment to Business Strategy

It’s critical to evaluate the project’s level of alignment with strategic priorities:

• Directly rate alignment to priorities and assign a score to measure against each criterion.
• Use soft benefits and hard benefits as the means to describe the extent of the alignment.
• Avoid co-mingling “lights-on” projects or compliance, regulatory or legal projects.

Sometimes operational leaders struggle to see the connections and alignment. The PMO can provide coaching to assist and ask questions that can lead to answers on whether a project is necessary or not. 

2. Cross-project Inter-connectivity

So you’ve completed the strategic alignment analysis for each project as a stand-alone effort. Now a different picture emerges when you evaluate projects together:

• Evaluate a project holistically to unlock hidden value and find connections.
• Look for dependencies or conflicts to minimize delivery risk and wasted effort.
• Identify projects that can be combined to bring efficiencies to the surface.

3. Organizational Impacts

In the project intake step, you should have collected estimates for the work involved by critical resources. Now it’s time to analyze the impact on the organization – both the resources required to execute the projects and employee groups impacted by the projects:

• Create a view of the consolidated resource demand needed to deliver the project portfolio against the available capacity.
• Analyze the net impact on regions, business units and client segments as a result of the collective people, process and technology changes expected.

After the project candidates have been analyzed and organized into an integrated portfolio, the PMO can bring this information to the organization’s decision-makers for final debate and approval.