Saturday 4 December 2021

Methods of project evaluation

Many of today's projects in companies, regardless of the size of the organization, industry and structure, are selected and initiated in isolation from each other, without taking into account their mutual influence and overall strategy. 


What are the risks of such an approach to the implementation of projects? Without using project evaluation methods, a company may face competition for resources, including human and technological resources, as well as conflicts in setting deadlines and goals. It is even possible that the implementation of some project will negatively affect other areas of the business.

Often, each department strives to assign the highest priority to its projects. But if an organization does not have a huge amount of resources or time and sets itself clear enough goals, projects cannot be equally priority. There are methods of evaluating projects and prioritizing that have already proven to be effective.

Involvement in planning at the strategic level

The first thing a program, project manager, or portfolio manager should do is to participate in planning at a strategic level. In contact with the management, achieve a complete understanding of the directions of business development, the deadlines set and the situation as a whole. Any details will be useful here.

Several strategic planning sessions may be required, during which valuable information will be gleaned to help you make informed decisions about programs, portfolios and projects. You can consider this as drawing up a plan that allows not only to outline the desired goals, but also to outline ways to achieve them. It's important to make sure you're on the right course.

Identification of the driving forces of the project

The importance of projects can be determined by various factors.

Projects are initiated in order to create or expand something, fulfill certain requirements, eliminate barriers, reduce risks, overcome existing or potential problems, increase turnover, obtain previously unavailable opportunities and simply streamline processes. 

Talk to management and try to find out which of the following driving forces contribute to the implementation of each proposed project:

  • competitive advantages;
  • cost reduction and financial benefits;
  • increase of operational efficiency, improvement of processes;
  • legislative, legal, tax factors;
  • quality improvement;
  • risk reduction;
  • opportunities for business growth.
  • Quantifying Strategic Values

Ask management to discuss the projects in question to assess their impact and determine the desired impact. This will help to better understand and calculate their strategic value, current and long-term impact, as well as the estimated benefits of each project. The risks of delaying the start of projects should also be carefully weighed. Perhaps some projects of high strategic value and with numerous additional benefits were not included among the high priorities of the analysis of legal, tax and legislative criteria.

Identify factors that affect the success of projects

Other factors to consider include project payback, budget funds, availability of resources, timelines, and existing dependencies and constraints. Budgets and deadlines are almost always limited, making it impossible to plan for all projects at once. Some of them have to be postponed because they depend on the successful implementation of other projects or on other reasons beyond the control of the enterprise.

Create a matrix of assessments and priorities

Having summarized all the information received from management and other sources, create a matrix of assessments and priorities that allows you to build a rating of projects based on the formulated criteria. Use weighting factors (e.g. 1 to 5, where 1 is very low, 2 is low, 3 is medium, 4 is high, 5 is very high) that characterize the importance of each criterion to accurately prioritize each project.

Verifying the correctness of the results obtained

Once all the criteria have been taken into account and the priorities of the projects have been determined, check everything again before proceeding with their implementation. The expectations of all stakeholders need to be clarified. 


This will allow management to make the desired adjustments or confirm its agreement with the conclusions you have made.

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