Project Selection Procedures: A Cross-Industry
The art and science of selecting projects is one that organizations take extremely seriously. Firms in a variety of industries have developed highly sophisticated methods for project screening and selection to ensure that the projects they choose to fund offer the best promise of success. As part of this screening process, organizations often evolve their own particular methods, based on technical concerns, available data, and corporate culture and preferences. This list gives you a sense of the lengths to which some organizations go with project selection:
The Royal Bank of Canada has developed a scoring model to rate its project opportunities. The criteria for the portfolio scoring include project importance (strategic importance, magnitude of impact, and economic benefits) and ease of doing (cost of development, project complexity, and resource availability). Expected annual expenditure and total project spending are then added to this rank-ordered list to prioritize the project options. Decision rules are used (e.g., projects of low importance that are difficult to execute get a “no-go” rating).
Exxon Chemical‘s management begins evaluating all new project proposals in light of the business unit’s strategy and strategic priorities. Target spending is decided according to the overall project mix portfolio. As the year progresses, all projects are reprioritized using a scoring model. As significant differences between projected and actual spending are uncovered, the top management group makes adjustments for the next year’s portfolio.
Have any of you been involved with changing a company’s strategic direction? It could be a small mom and pop store, a corner cafe or a large Fortune 500 corporation.
Once again, if you have never been directly involved, please pick an example where you would like to add strategic direction to a company or store.
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Also posted onApril 10, 2020 @ 9:16 am