Reprioritizing Your Projects
Projects need to be properly re-evaluated for appropriate reprioritization, but in many cases that isn’t happening in an optimal fashion. Return on investment or other quantitative methods like internal rate of return (IRR), discounted present value (DPV) and profitability index (PI) are commonly employed by Project Portfolio Management Offices (PPMO) to appraise and rank projects financially. This helps decide if they are worthy to pursue and to guide resource partitioning across the project portfolio.
When businesses contemplate adding new projects or reprioritizing existing ones to meet a product requirement change or a new market challenge, allocated resources (head counts, equipment, tools, capital, materials, etc.) are redistributed--which may result in some projects being delayed or outright canceled. That will release needed assets, enabling resource rebalancing among the updated projects in the portfolio to cope with the new situation.
In either case, a PPMO would usually monetarily reweigh the projects--including scaling the new one (if it is suggested to be added to the portfolio)--to help top brass determine new project priorities that will be used to guide resource division. Although the existing projects had their returns forecasted for approvals at the beginning, market shifts and resource adjustments (due to various reasons since their
Please log in or sign up below to read the rest of the article.