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Basically you have:
--Maintenance projects: no roi, no npv, no strategic plan
--Transformation projects: high risk
--Growth or improvement projects: roi, npv, etc.
But to consider these projects, a lot depends on the moment in which the business is:
Grow in position
Medium-high profit but high alignment
They must add value to "things" that support the strategy
They are justified by the "what happens if it is not done?"
Withdraw from the market
Invest in an orderly exit
Sergio has provided categories of projects and measures for evaluating them.
Other factors include:
1. The market & competitive pressures within that market
2. Office politics and personal agendas (i.e. who screams loudest)
3. Availability of resources specifically required for those projects
4. Strategic direction of the organization in terms of its objectives and roadmaps
Kiron and Sergio mentioned criteria I think are valid.
In a recent engagement, set 5 criteria to evaluate projects for selection:
- ROI (most projects less than 2 years, otherwise NPV would be used)
- Compliance / legal requirement
- strategic relevance (link to strategic goals)
- landscape fit (changes to architecture / infrastructure needed)
- resource fit (do we have the capability and capacity)
each of them assessed by the initators on a scale of 1-10 and then added. The assessment is public, hence others can (and do) challenge the judgement.
I would always add 'pet project' to the list, but those in the room do not like to be pointed out.
Every project should be a solution to a problem. So, what you are asking is how do you prioritize the problems that need solutions. As noted in previous comments it depends on the current status of the corporation/organization and its vision/mandate. My first priority would be compliance/legal as this could pose a shut-down scenario; next would be the need to maintain current levels of operations; followed by best investment opportunities (ROI).
Generally one would go from risk mitigation (threats) to enhanced opportunities.
At a high level, one could thing on the following terms:
- Medium long term planning
- Business growth
- Operational continuity
There are surely more aspects to consider, but those give a good starting point.
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