Project Selection

- The Whats, Whys, Whens, Hows and Whos involved -The Process of Project Selection11The first and usually the best opportunity for successful change is to exploit ones own successes and build on them. Problems cannot be ignored. And serious problems have to be taken care of. But to be change leaders, enterprises have to focus on opportunities. They have to starve problems and feed opportunities. Peter Drucker2Introduction..........................................................................................................................................4.

What is Project Selection?.....................................................................................................................5.

Why Do Project Selection?.....................................................................................................................7.

When to Do?..........................................................................................................................................9.

Who Should Be Involved?.....................................................................................................................10.

A Diagram Overview............................................................................................................................11.

Defining Project Selection Criteria Examples, Advantages and Disadvantages.........................................................................................12. Case Study 1 The formation of a Steering Committee..12.

Case Study 2 Choosing one of two methods: Benefit Measurement and Constrained Optimization..15.

Conclusion...........................................................................................................................................20.

Bibliography........................................................................................................................................21.

3Table of Contents3One of the biggest decisions that any organization would have to make is related to the projects they would undertake. Once a proposal has been received, there are numerous factors that need to be considered before an organization decides to take it up. The most viable option needs to be chosen, keeping in mind the goals and requirements of the organization.4Introduction4(source: "Project Selection Methods", found at: http://www.tutorialspoint.com/management_concepts/project_selection_method.htm)Project Selection is a process to assess each project idea and select the project with the highest priority. Projects are still just suggestions at this stage, so the selection is often made based on only brief descriptions of the project. As some projects will only be ideas, one may need to write a brief description of each project before conducting the selection process.5What is Project Selection?5(source: "Project Selection", found at: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection.html)Selection of projects is based on: Benefits: A measure of the positive outcomes of the project. These are often described as "the reasons why you are undertaking the project". The types of benefits of eradication projects include:BiodiversityEconomicSocial and culturalFulfilling commitments made as part of national, regional or international plans and agreements.Feasibility: A measure of the likelihood of the project being a success, i.e. achieving its objectives. Projects vary greatly in complexity and risk. By considering feasibility when selecting projects it means the easiest projects with the greatest benefits are given priority. 6Often one will have a number of suggested projects but not enough resources, money or time to undertake all of the projects. The ideas for eradication projects may have come from many sources including: the community, funders, local and national governments and Non-Governmental Organizations (NGOs). One will therefore need a way of deciding on a priority order and choosing a project.If the organization in question has limited experience in conducting eradications then it is recommended to concentrate on a small number of projects, ideally one project at a time, until the people in the organization have developed the skills and experience. Its important to grow capacity and build up to undertaking multiple projects at any one time. One should do the easy projects first and, only then, work towards the most difficult and rewarding projects. One should use the easy projects to help answer questions/solve issues for the more difficult projects. Also, one should use the best opportunities to learn.7Why Do Project Selection?(source: "Project Selection", found at: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection.html)One may have a mix of straight forward and difficult eradication projects and does not know where to start. The Project Selection Stage, then, will assist one by providing a process to compare the importance of the projects and select the most suitable project to undertake.By following the Project Selection Stage one will follow a step by step objective method for prioritizing projects - this can be used to explain to stakeholders the reasoning behind why one selected a particular project.The benefits of completing the Project Selection are: A transparent and documented record of why a particular project was selected.A priority order for projects, that takes into account their importance and how achievable the project is.8Undertake a Project Selection when one has more ideas than the number of projects one can undertake and need to select the project that should be given priority.Note: If one only has 1 project in hands, it may still be useful to score the project against a set of criteria to identify the strengths and weaknesses of the project. The results may be useful later in the Feasibility Study Stage.9When to Do?(source: "Project Selection", found at: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection.html)Agency Management:Set selection criteria to ensure the selection process aligns with agency strategies.Selection processes are often run as a management initiative before the implementing Project Manager (PM) is assigned.Stakeholders:Stakeholder participation at the start of a project creates strong community ownership and support, and increases the chances of a successful outcome.Stakeholder input should be included at the ideas stage; one should consult widely as one is developing the ideas for projects as the community will be the source of many of the best project ideas.Stakeholders must be informed of the outcome of the Project Selection Stage.PM: Involving the PM in the Project Selection process will help build ownership in the project and support a successful project in the long run.

10Who Should Be Involved?

(source: "Project Selection", found at: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection.html)Each project idea is scored against the selection criteria and a total project score is calculated. By ranking the ideas in order of the highest score one is able to see which idea has the highest priority. This procedure gives one the ability to take a number of possible projects and identify which project is most important to first move to the Feasibility Study Stage. This Stage is not required if one only has one project idea. A diagram overview follows below:

(source: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection-Diagram.html)

11A Diagram Overview

11(source: "Project Selection", found at: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection.html)Case Study 1 The formation of a Steering Committee

Most organizations have a formal, or at least semiformal, process to select and prioritize projects. A steering committee is responsible for project review, selection, and prioritization. It is a group of people comprised of senior managers and sometimes midlevel managers who represent each of the functional areas in the organization.Below, follows how it works:The steering committee requests project ideas from the business staff prior to the beginning of the fiscal year.A special steering committee meeting is called to review the projects, and a determination is made on each project as to whether it will be included on the upcoming list of projects for the new year. Once the no-go projects have been weeded out, the remaining projects are prioritized according to their importance and benefit to the organization. The projects are documented on an official project list, and progress is reported on the active projects at the regular monthly steering committee meetings.

12Defining Project Selection Criteria Examples, Advantages and Disadvantages(source: "Defining Project Selection Criteria", found at: http://projectcmd.blogspot.pt/2009/12/defining-project-selection-criteria.html)13In theory, its a great idea. In practice, it works only moderately well. Priorities can and do change throughout the year. New projects come up that werent originally submitted during the call for projects that must be added to the list. Reprioritization begins anew, and resource alignment and assignments are shuffled. But again, were getting ahead of ourselves. One should be aware that organizations usually have a process to recognize and screen project requests, accept or reject those requests based on some selection criteria, and prioritize the projects based on some criteria.Large, complex projects may be subject to further review via a feasibility study before a decision can be made to accept the project. Feasibility studies determine the viability of the project and help the company determine if the product or service of the project is marketable, profitable, safe, and doable.Whats the criteria? Well, project selection criteria is an input to the project Initiation process. According to the Guide to the PMBOK, project selection criteria is concerned with the product of the project. In other words, selection criteria is concerned with what the product or service of the project will produce and how it will benefit the company.

14Selection criteria concerns every area of business from marketing to finance to information technology to human resources. It can be subjective or objective. Criteria for judging project selection could include financial measurements. For example, the selection criteria might dictate that projects must increase profits by a certain percentage in order to be considered.Equally, project selection criteria might include the criteria that an increase in market share or an increase in the public awareness of the company or product will be enjoyed as a result of this project. There arent any rules for project selection as the components of selection criteria are up to the company, steering committee, or project review committee to determine.Predetermined selection criteria, such as mentioned above, is one aspect of project selection, but so is the individual opinion, and power, of selection committee members. One mustn't underestimate the importance of the authority, political standing, and individual aspirations of selection committee members. Those committee members who happen to carry a lot of weight in company circles, so to speak, are likely to get their projects approved just on the fact that they are who they are. This is sometimes how project selection works in an organization.

15Case Study 2 Choosing one of two methods: Benefit Measurement and Constrained Optimization

There are various project selection methods practiced by the modern business organizations. These methods have different features and characteristics. Therefore, each selection method is best for different organizations.Although there are many differences between these project selection methods, usually the underlying concepts and principles are the same.Below is an illustration of two of such methods (Benefit Measurement and Constrained Optimization methods):

(source: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection-Diagram.html)

(source: "Project Selection Methods", found at: http://www.tutorialspoint.com/management_concepts/project_selection_method.htm)16As the value of one project would need to be compared against the other projects, one could use the benefit measurement methods. This could include various techniques, of which the following are the most common:The PM and his/her team could come up with certain criteria that he/she wants his/her ideal project objectives to meet. The PM could then give each project scores based on how they rate in each of these criteria, and then choose the project with the highest score.When it comes to the Discounted Cash flow method, the future value of a project is ascertained by considering the present value and the interest earned on the money. The higher the present value of the project, the better it would be for the organization in question.The rate of return received from the money is what is known as the IRR. Here again, one needs to be looking for a high rate of return from the project.

17The mathematical approach is commonly used for larger projects. The constrained optimization methods require several calculations in order to decide on whether or not a project should be rejected.Cost-benefit analysis is used by several organizations to assist them to make their selections. Going by this method, one would have to consider all the positive aspects of the project, which is the benefits, and then deduct the negative aspects (or the costs) from the benefits. Based on the results one receives for different projects, one could choose which option would be the most viable and financially rewarding.These benefits and costs need to be carefully considered and quantified in order to arrive at a proper conclusion. Questions that one may want to consider asking are in the selection process are:Would this decision help me to increase organizational value in the long run?How long will the equipment last for?Would I be able to cut down on costs as I go along?

18In addition to these methods, one could also consider choosing based on opportunity cost. In other words, when choosing any project, one would need to keep in mind the profits that one would make if he/she does decide to go ahead with the project.Profit optimization is therefore the ultimate goal. One needs to consider the difference between the profits of the project one is primarily interested in, and the next best alternative.

19Regarding the implementation of the chosen method:The methods described on the previous pages can be carried out in various combinations. It is best that one tries out different methods, as in this way one would be able to make the best decision for the organization in question considering a wide range of factors rather than concentrating on just a few. Careful consideration would therefore need to be given to each project.

All the project selection process (es) and methods emphasized and described along this presentation are absolutely essential for an efficient business planning.It is always best to have a good plan from the inception, with a list of criteria to be considered and goals to be achieved. This will guide one through the entire selection process, and will also ensure that one does makes the right choice.20Conclusion(source: "Project Selection Methods", found at: http://www.tutorialspoint.com/management_concepts/project_selection_method.htm)Internet Resources

Defining Project Selection Criteria (Webpage) Available from: http://projectcmd.blogspot.pt/2009/12/defining-project-selection-criteria.html (accessed Saturday, 18. November 2012).

Peter Drucker Quotes (Webpage) Available from: http://www.the-happy-manager.com/tips/peter-drucker-quotes/ (accessed Saturday, 18. November 2012).

Project Selection (Webpage) Available from: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection.html (accessed Saturday, 18. November 2012).

Project Selection Methods (Webpage) Available from: http://www.tutorialspoint.com/management_concepts/project_selection_method.htm (accessed Saturday, 18. November 2012).

21Bibliography