Project Prioritization Risk Demo

Most tools for project portfolio management are incapable of accurately prioritizing projects. One source of error is the lack of proper algorithms for valuing risk. Take a look at this nice demo, developed by my colleague Steve Chapel.

Requires Java Runtime Environment. Download it free here. You may need to enable Java.

Start the demo. Click New Portfolio to prioritize 30 random projects. The projects are displayed as an efficient frontier. Click any dot to see the data for the corresponding project:

Circles indicate project risk, the risk that the project may fail to deliver its promised benefits. Project risk decreases project value.

Squares indicate deferral risk is the dominant risk. Deferral risk refers to the potential for losses to the business if the project is delayed. Deferral risk increases project value.

More serious risk.

Click Adjust for Risk. Notice the dramatic impact on project priorities and portfolio value. Use Tools>Set Risk Tolerance to see the effect of changing risk tolerance.

Inadequate risk analysis is one of several reasons organizations choose the wrong projects. Use a project portfolio management tool that correctly values risk.