Priority in project management
Prioritising projects is one of the most important skills for any organisation running projects. It is important to align strategic objectives with project plans, quantify added value, assess costs and resources. Also, balance the volume of projects undertaken with the ability to deliver them. In this article we will now look at what priority means. Why prioritisation is important and how to classify your projects effectively.
Reporting the priority
In project management, the word priority means the urgency and importance of a task or project. Project managers use priority to determine who is responsible for each task and when to expect results.
Priority is determined by a number of factors, including the time and money spent, the resources available and needed, and company-specific needs. Project managers need to weigh and compare these factors to determine priorities.
Reporting high and low priority
A high priority means that something is particularly important and should be given priority over other tasks in project planning. In the order of priority, these tasks usually contribute most to the strategic objectives and promise promising results in terms of both resources and return on investment.
Low-priority projects are those with lower rates of return or excessive resource requirements, or where there are ideas within the company that better support higher-priority goals.
Why is prioritisation important in projects?
Prioritisation can ensure that resources are allocated correctly based on project needs. By prioritising tasks, time and money spent on less urgent and important tasks can be minimised.
Priority can also be given to the projects themselves, i.e. to those that will actually pay for themselves.
Improving the prioritisation process and selecting projects that better support organisational objectives will have the following benefits:
- Increasing project success rate - Good prioritisation ensures coordination of projects and fewer mistakes.
- Higher return on investment (ROI) - Projects that are better aligned with business objectives deliver more value - not just money - to the organisation.
- Better quality of project applications - By identifying strategic objectives, initiatives will be aligned with them.
- Remove outdated projects - A structured project prioritisation process ensures that only well-coordinated projects are approved and outdated projects are identified in advance.
- More efficient resource allocation - A good prioritisation process will allow the portfolio to be properly sized. Resources can then be allocated more efficiently.
How do we prioritise projects?
The process of prioritising projects is essential to ensure that the criteria remain consistent across the portfolio and meet the specific needs and objectives of the organisation.
Now let's look at how we can prioritise projects effectively.
1. Setting targets and indicators
In order to establish appropriate priority levels in projects, it is first necessary to define the overall strategic goals of the organisation or team. Some companies prioritise projects based solely on their financial value, while others may prioritise other types of values.
For example, you might prioritise an internal project that will improve the efficiency of your company's operations. Or even a customer project that is important in terms of mission and social values.
Depending on the goals to be achieved, we can provide some metrics that form the basis for prioritisation.
Targets and metrics help you decide which projects are priorities in terms of team resources and time. For example, you might imagine that financial benefit is the top priority, and innovation is a next priority. In other words, projects that generate high profits are prioritised over projects that develop innovation, even though both are considered important.
2. Set up a scoring system
The scoring system is an excellent way to prioritise. It can be used, for example, to determine whether a project currently underway is worth pursuing.
It should be designed so that the highest priority gets the highest score and the lowest priority gets the lowest score.
3. Comparing values and resources
In addition to the financial or strategic benefits of projects, it is also very important to consider resources. Some projects may have huge benefits, but they also have huge resource requirements.
Even if it is a high-priority project, it may not be worth the investment if all the company's resources have to be used and other projects are sidelined. Likewise, a low-value project may achieve a higher priority if it requires minimal resources and a quick return on investment.
4. Assessing the risk of projects
When setting priorities, it is also worth considering the risks, the chances that the team may not be able to deliver the project. Or that costs will be higher than planned, or that more staff may be needed.
It is useful to compare the risk with the potential value of the project when establishing the ranking.
Some high-priority projects may also have a high level of risk, which can affect whether we really want to invest our resources in them.
5. Assessing the level of urgency
One of the most important aspects of prioritisation, especially for projects already on the roadmap, is to review their urgency. Review the current deadlines and prioritise according to which tasks are due to be completed in the near future.
Estimate how long it will take to complete each project and, based on the due date, determine the latest possible start date for each project to meet the deadline.
These dates can form the basis for prioritisation between projects of similar importance and value.
6. Taking personal preferences into account
It may also be the case that a project is of roughly equal importance in terms of strategic objectives and deadlines. In such a case, individual preferences may be decisive. Our personal working style can determine the ranking.
For example, one project is more challenging, requires more attention and organisation, which we put before an easier project.
7. Balance between high and low priority tasks
Project balance also plays a big role. This can be achieved by having the right mix of high-value and simple projects.
If only high-priority projects are chosen, the team can quickly become overloaded. However, if more varied and sometimes lighter tasks are undertaken, the workload can be more balanced.
8. Rejection of projects
Part of the prioritisation process involves rejecting projects that do not fit into the priority strategy.
If a project is judged not to be worthwhile because it requires too many resources, a firm decision must be taken to reject it. This frees up time for higher priority projects.
9. Make changes if necessary
As targets and timetables often change, so too may the need to adjust the rankings. It is therefore important to be flexible and ready to respond to any requests from company managers or customers. While these changes are for the success of the team, short-term adjustments to priorities can have long-term benefits.
Project prioritisation techniques and processes
Now let's look at some ways to effectively prioritise your project work.
The priority matrix is a simple tool to help you identify the most important projects on a list. The matrix can be as simple as a 2×2 square that measures urgency and importance. It can also be a larger matrix that compares a number of variables.
MoSCoW is an acronym that stands for "Must have, Should have, Could have, Won't have". MoSCoW is also a prioritisation matrix that ranks options into four categories. It is a variation of the traditional priority matrix.
- M - This is a must: These are priorities without which the project cannot succeed and will lead to failure.
- S - If possible, this should be given: This includes those points that provide real value and/or their importance contributes to the achievement of the objectives. In the traditional priority matrix, this corresponds to the 'important but not urgent' category.
- C - Maybe, if nothing else is affected: These are good to have, but can be removed from the priorities if necessary. Mostly convenience requirements.
- W - No time, but we plan to do it in the future: Although it is excluded for now, it can still be used in the future.
According to the Kano model, the features available in the final product determine the customer's satisfaction with the project. So, let's identify the features that provide a high level of satisfaction to the end user and rank these projects.
The payback period is the time it takes to recover the cost of an investment. When calculating the payback period, take into account both ongoing costs and potential revenues. Although a project with a shorter payback period may be preferable, the duration of the project and the potential for ongoing returns must also be taken into account. This is a simple method that focuses on cash flow and does not take into account potential risks or obstacles.
Scoring models assign a numerical value to projects based on criteria predefined by decision-makers. Higher scores correspond to higher priority projects.
Story mapping is the process of creating a hypothetical map of the user's experience of a product. It helps to highlight the features of the product that the user is most likely to interact with and which are therefore most important.
Analytical hierarchical process
The analytical hierarchy process determines the priority of projects through a series of pairwise comparisons between projects. For each project, it generates a numerical score based on the criteria that best fit the company's needs. Higher scores correspond to higher priority projects.
Net present value
The net present value compares the current costs of the project with the return on investment. It takes into account the possibility of discounted cash flows but ignores a number of non-financial variables.
If you also think it is important for you to achieve better results in your project work as a project manager and to continuously improve your competences, please have a look at our current our training courses for project managers!