- The Importance of Project Initiation
- The Purpose of the Project Charter
- The Timing and Importance of the Project Manager Assignment
- The Value of Project-Selection Methods
- Using Expert Judgment for Project Initiation
- Management by Objectives
- The Relationship to Planning Activities
- Project Selection Accounting Concepts
- Exam Prep Questions
- Need to Know More?
This chapter is from the book
This chapter is from the book
This chapter is from the book
The Value of Project-Selection Methods
Outside of the project charter, the other topic that is greatly emphasized by PMI within the Initiating process is project-selection methods.
PMI feels strongly that organizations should have a formal process for deciding projects to sponsor and for ensuring that projects are supportive of the organization's strategic objectives. In many organizations, some type of senior management steering committee or Program Management Office (PMO) performs this project-evaluation and -selection process.
Project-selection methods are the techniques used to execute this process, and they are organized into two major categories: benefit measurement methods and constrained optimization methods.
The project-selection method(s) used by an organization should be relevant to the objectives of the company and its managers and should be consistent with the capabilities and resources of the organization.
NOTE
Project initiation is the first of many processes where PMI expects organizations to leverage historical information (such as past project-selection decisions and past project performance) when authorizing a project or the next project phase. Although this seems like common sense, the issue here is that in the "real world" the collection of reliable project data is rarely done; therefore, it is not a common practice in many organizations today.
Two General Types of Project-Selection Methods
The two methods of project selection are benefit measurement (comparative approach) and constrained optimization (mathematical approach). Table 3.1 summarizes the key points of these two method types.
CAUTION
The exam will require you to know the methods of project selection, their main differences, and examples of each.
Table 3.1 Project-Selection Methods
|
Method Type |
Examples |
Notes |
|
Benefit measurement (comparative approach) |
Scoring models, cost-benefit analysis, review board, economic models. |
Benefit measurement is the most common approach. |
|
Constrained optimization (mathematical approach) |
Linear programming, nonlinear programming, integer programming, dynamic programming, multi-objective programming. |
Constrained optimization makes use of math models and complex criteria and is often managed as a distinct project phase. |