The initiation phase sets the tone for the rest of the project.
In the interest of time, many project managers often breeze through the selection process. However, if you don't employ and adhere to formal project selection methodologies, you'll find that your shortcuts actually cost you time rather than saving it. Here are two examples from past consulting engagements that illustrate my point.
A case of misalignment
A poor selection process can leave a project's manager, team, and even the stakeholders questioning why the project was ever considered in the first place. That was the case for an application development effort that was necessary to provide a specialised business service for a manufacturer. The project was well-defined, authorised, funded, and delivered on time and within budget.
The project sounds like a success; however, the developed application was never used because senior management decided to discontinue the specialised service. The project's cost was fairly substantive and was recorded as a loss for the organisation.
A key element to project selection and prioritisation is to ensure that the project candidate is in alignment with organisational plans. Many organisations initiate formal alignment reviews for projects, comparing the benefits and outcomes with the organisation's mission and values. Some organisations extended this to also include a balanced scorecard assessment.
A case of poor ROI
Some project managers allow senior management to authorise projects without conducting a formal financial analysis to gauge the project's profitability potential. Even if there is a formal financial analysis, a common mistake is to skim over the document in an attempt to speed up the project prioritisation process. This is common in the case of senior managers' "pet" projects.
An example of this occurred on an ERP project to automate the processing of exchanging order/fulfillment information between two departments. The project sponsor, a senior organisation leader, intuitively concluded that a development project was justified to replace the manual paper processes involved. Unfortunately, a detailed financial analysis wasn't performed prior to project authorisation. Then, during the project planning phase, the project manager realised that the payback period would be much longer than he anticipated, resulting in the project being cancelled.
This example illustrates two important points. First, you should always include a financial analysis in prioritisation processes even if the analysis is incomplete or cursory due to limited available information. Second, you should revisit this justification during the project to ensure its validity and take appropriate action. There are times when it's valid and even desirable to cancel a project.
Following a methodology
Each situation requires different handling, so you may find that you need to slightly modify the methodology you use for each project. For instance, one project may require that you get up to speed on a new technology regardless of the cost, while another project may not cost as much but would take up too many resources during a given time.
The important part is that you devise a formal methodology during each initiation phase and stick to it. It will also serve as a record of what steps you took to arrive at your project selection phase.
Scott Withrow has more than 20 years of IT experience, including IT management, Web development management, and internal consulting application analysis.
