Sometimes we can’t start all the projects we would like to. This often happens with internal projects: how many CIOs will undertake all projects that are demanded by the heads of each department? And how many find solid reasons to explain which projects are initiated, in what order and why?
Whenever you have a hard time deciding which projects you should run, you can base your decision on the evaluation of different scenarios. Here’s an example.
An example of using scenarios
Imagine that there are three internal projects that are difficult to compare: the implementation of a new document management system (DMS), the development of a new product and the internal training of the entire sales force. And also, as we said, we do not have enough capacity to finance them all.
1. Estimation of cost and importance
The first step in setting the scenarios is to assess their cost and importance:
Suppose that the maximum budget that can be allocated to these projects is $150,000, less than the total of 170,000.
How to value a project
With ITM Platform, the value of a project depends on how much it helps to achieve a business objective. This criterion allows you to group very different projects by programs and to develop scenarios more complex than the one of this example.
Test yourself on how to generate scenarios linked to your goals with ITM Platform.
- Count Scenarios
The next thing is to know what all the alternatives are. In this case, there are 8 scenarios or possible situations considering that we can choose (blue) or discard (red) each of the projects.
- Quantify the scenarios
What is the investment required for each of the scenarios?
|0.00||$64,144.00 $||$90,091.00 $||$154,235.00|
|$15,777.00||$79,921.00 $||$105,868.00 $||$170,012.00|
As we know that the investment limit is $150,000, we can rule out the two combinations that exceed it.
- Assess the scenarios
What is the value obtained from each of them?
If we did not have limitations, of course, we would choose to launch all the projects. But in applying the financial constraints, we choose the scenario that brings the most value without exceeding budget.
Since two scenarios have been ruled out, it is necessary to choose the combination with the highest value among the remaining ones: 65% of projects 1 and 2.
Is it simple? When you try it on ITM Platform you will no longer have doubts when selecting projects.