|
Choose a Tool with Best Practice Project Valuation
Project valuation is the key to project portfolio management (ppm). You need to be able to reliably estimate the value derived from candidate projects to be able to prioritize them.
Avoid tools that:
- Rank projects based solely on financial metrics, such as NPV or ROI—they undervalue projects becaue they ignore non-financial project benefits
- Reference pseudo-scientific methods like "balance" or "alignment"—the concepts may sound reasonable, but they do not represent defensible project-selection techniques
- Fail to consider the costs and risks of not doing projects—the value of a project is the difference in the values obtained if the project is, versus is not, conducted
- Evaluate only all or nothing project choices—a tool that can evaluate alternative project versions (e.g., different scopes, funding levels) will generate greater insight
Look for tools that:
- Are based on mathematically defensible valuation methodologies, such as multi-attribute utility analysis
- Use industry and project-specific logic to evaluate projects using metrics that fit your business
- Account for risk and uncertainty
- Provide flexibility to change the project valuation model as you learn and refine your ppm processes
- More recommendations
|
|
 |
You don't need a six-figure ppm tool for the above. We provide low-cost, custom tools by incorporating industry-specific valuation models into our existing Excel ppm
platforms.
Contact us for more information.
|
