Project Prioritization Matrix and Process

In an ideal world, organizations would have all the budget and resources they need to carry out all projects in their pipeline – and I would be happily rich. Unfortunately for all of us, we don’t live in an ideal world and organizations are always constrained in the number of projects they can deliver with limited resources. The real world calls for portfolio management and prioritization!

Project Prioritization Process
Project Prioritization Process

Why Prioritize Projects?

  • In a nutshell, in the same way project management is all about doing projects right, portfolio management is about doing the right projects, that is, the ones that align to strategy.
  • However, most of the time, resources, not strategy, determine what gets done and when and most organizations still rely on rudimentary approaches to select their projects, namely, “first-come-first-served”, “who-shouts-the-loudest”, the well-known “gut feel” or even the “eeny, meeny, miny, moe”. 
  • I’m certain there may be advantages in following your instinct but, overall, not only are those emotional, biased, and subjective approaches, they also miss consistency, transparency, and alignment. 
  • At the end of the day, you end up with nothing more than pet projects, fashionable projects with the word “strategic” on it, and a couple of projects that are not aligned to what you wanted to achieve in the first place.
  • Defining how to prioritize projects can be a daunting task (and you may even upset a person or two in the beginning). 
  • Fortunately, we’re here to suggest you a prioritization model that you can take away and use on your own.

The Prioritization Matrix

From the rigorous Analytical Hierarchical Process (AHP), to sophisticated PPM tools, and the entertaining priority poker, there are plenty of techniques out there for portfolio prioritization but perhaps the one that is more commonly used and easy to implement and tailor is the prioritization matrix. 

Project Prioritization Matrix
Project Prioritization Matrix

Identify your criteria

  • What matters to your business? Is it the return on investment? Customer satisfaction? Improving operational efficiencies? All of them? 
  • Gather your senior leadership team, discuss your strategy, and agree what criteria should projects be evaluated against. 
  • As a best practice, my recommendation would be to, at least, include ‘strategic alignment’ and the 3R’s of portfolio management – risk, resources, and return.

Establish the weight of each criterion

  • If achieving cost-efficiencies is more important than protect reputation risk, this should be made clear for all so that projects that contribute to this objective can be pursued and others that don’t can be moved to the bottom of your list of priorities. 
  • The different criteria weight should sum up 100%. 

Define the rating scale of each criterion

  • Each criterion should have a scale – usually comprising 3 or 5 levels – that defines how it can range. 
  • For instance, if the criteria in analysis is “Strategic Alignment”, then the question to ask would be “to what extent is the project aligned with our strategic objectives?”, whose answers could vary from “1 – does not align”, to “2 – aligns to a minimum”, “3 – somewhat aligns”, “4 – strongly aligns”, to “5 – fully aligns”.

Score your projects against each criteria

  • Grab your list of projects, sit your Exec team, and start evaluating each project to each criterion, scoring them using the scale previously identified. 
  • Some projects may be easier to score than others but you will soon realize that the discussion started by the prioritization exercise is what matters the most to align expectations and clarify the strategy to be followed.

Calculate the project total score

  • Simply put: just do the maths. Your project total score is a sum of the scoring for each criterion x the weight of that criterion. 
  • The higher the score, the higher the priority of the project. Simple, right? I told you so.
It’s important not to be too emotionally attached to the priorities though. Uncertainty and changing priorities are part of every organizational setting, so be agile and flexible to accommodate changes and repeat the prioritization exercise when required.

In a world where time and resources are in short supply yet high demand, to use an “everything is important” approach is unpractical, if not impossible. For projects, priorities matter and should drive your decisions.

Swapnil Wale

Written by

Swapnil Wale is an IT Professional based in Sydney, Australia with over 10 years of experience in technology and project management. He is a passionate blogger and focuses on project management and BRMS articles.


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