Page 40 - DMGT521_PROJECT_MANAGEMENT

Unit 3: Strategic Management and Project Selection

3.1 Selection Process of Project Notes

An organisation might have dozens of prospective projects varying for limited resources.

3.1.1 Business Goals

This requires a selection process that maximises the efficiency of scarce business resources.
When selecting between prospective projects, assess how each project ties to the organisation’s
goals and objectives. Base selections on the value each project lends to the organisation’s strategic
plans. Review the organisation’s vision statements, mission statements and business goals against
each project’s objectives.

3.1.2 Selection Criteria

The process of evaluating individual projects or groups of projects for the purpose of choosing
which to implement might include a number of factors. When selecting among competing
project alternatives, additional project factors that might be reviewed and compared include
costs, benefits and risks. While the exact parameters of these factors might not be known with
certainty, estimates can be compared to evaluate differences.

3.1.3 Objectives Matrix

Top management might develop a matrix of objectives for projects that are expressly based on
the organisation’s business goals and strategies. Examples of objectives include improving the
corporate brand with customers, expansion into a new market and growth of market share for
a particular product or service, to name a few.

3.1.4 Achievable

A project should be assessed for realism, capability and cost. Thirty percent of all projects end
midstream and half of completed projects end an average of 200 percent over schedule and over
budget, according to a 2001 study by the Centre for Innovative Management. Unfinished projects
are a significant waste of resources. A project that costs more than double its projected budget
raises cost-benefit analysis questions.

Notes When selecting between prospective projects, assess how each project ties to the
organisation’s goals and objectives. Base selections on the value each project lends to the
organisation’s strategic plans.

3.2 Project Selection and Criteria

One of the biggest decisions that any organisation would have to make is related to the projects
they would undertake. Once a proposal has been received, there are numerous factors that need
to be considered before an organisation decides to take it up.
The most viable option needs to be chosen, keeping in mind the goals and requirements of the
organisation. How is it then that you decide whether a project is viable? How to you decide if the
project at hand is worth approving? This is where project selection methods come in use.

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