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KEYPROJECTMANAGEMENTTOOLS ANDTECHNIQUES 111KEY PROJECT MANAGEMENT TOOLS
AND TECHNIQUES
There are many tools and techniques available to project
managers and their teams to assist them in all of the
knowledge areas. This section highlights just a few of
them. Consult the PMBOK Guide (PMI, 2000b),Informa-
tion Technology Project Management(Schwalbe, 2002), or
other references for more detailed information.Project Selection Techniques
Some of the most important decisions organizations must
make involve which projects to pursue. It does not matter
if a project is highly successful in meeting scope, time, and
cost goals if the project itself is not important to the orga-
nization. Therefore, organizations should develop and fol-
low a logical process for selecting and continuing projects.
Four common techniques for selecting projects include
the following:1.Focusing on broad organizational goals:Organizations
often cite broad needs, such as improving customer re-
lationships, increasing market share, and so on. Senior
managers often like to see strong financial justification
for projects, but sometimes it is sufficient to show that
projects support high-level strategies that meet broad
organizational needs.
2.Categorizing projects:Not all projects can be high prior-
ity or tied to meeting a critical corporate goal. Projects
are often started to address problems, opportunities, or
directives that arise. Projects can also be categorized
based on the resources they need in terms of time and
cost.
3.Performing net present value and other financial analy-
ses:Financial considerations are often an important as-
pect of the project selection process, especially in tough
economic times. The primary methods for determining
projected financial value of projects include net present
value analysis, return on investment, and payback
analysis. These techniques are not unique to project
management. Any financial analyst can describe these
techniques and their importance to senior managers.
Consult a good finance or project management text-
book or Web site (http://www.investopedia.com) for
descriptions of these techniques.
4.Using a weighted scoring model:A weighted scoring
model is a tool that provides a systematic process for
selecting projects based on many criteria. These crite-
ria can include factors such as meeting broad organi-
zational needs; addressing problems, opportunities, or
directives; the amount of time it will take to complete
the project; the overall priority of the project; projected
financial performance of the project; and so on.The first step in creating a weighted scoring model is
to identify criteria important to the project selection pro-
cess. It often takes time to develop and reach agreement on
these criteria. Holding facilitated brainstorming sessions
or using groupware to exchange ideas can aid in develop-
ing these criteria. Some possible criteria for information
technology projects include the following:Supports key business objectives
Has strong internal sponsor
Has strong customer support
Uses realistic level of technology
Can be implemented in 1 year or less
Provides positive net present value
Has low risk in meeting scope, time, and cost goalsNext, the manager assigns a weight to each criterion.
These weights indicate how much stakeholders value each
criterion or how important each criterion is. Weights can
be assigned based on percentages, and the total of all of
the criteria’s weights must total 100%. The manager then
assigns numerical scores to each criterion (for example,
0 to 100) for each project. The scores indicate how much
each project meets each criterion. At this point, the man-
ager can use a spreadsheet application to create a matrix
of projects, criteria, weights, and scores. Figure 3 pro-
vides an example of a weighted scoring model to evaluate
four projects. After assigning weights for the criteria and
scores for each project, the manager calculates a weighted
score for each project by multiplying the weight for each
criterion by its score and adding the resulting values.
For example, one could calculate the weighted score
for Project 1 in Figure 3 as follows:25%∗ 90 +15%∗ 70 +15%∗ 50 +10%∗ 25 +5%∗ 20
+20%∗ 50 +10%∗ 20 = 56.Note that in this example, Project 2 would be the
obvious choice for selection because it has the highest
weighted score. Creating a bar chart to graph the weighted
scores for each project allows one to see the results at a
glance. If a manager creates the weighted scoring model
in a spreadsheet, he or she can enter the data, create and
copy formulas, and perform “what if” analysis. For exam-
ple, suppose the manager changes the weights for the cri-
teria. By having the weighted scoring model in a spread-
sheet, he or she can easily change the weights, and the
weighted scores and charts are updated automatically.
Many organizations are striving to select and manage
projects better by using project portfolio management,
enterprise project management, and multiproject man-
agement techniques, all topics beyond the scope of this
chapter.Formalizing Projects With a Project Charter
Once an organization has decided which projects to pur-
sue, it is important to authorize those projects formally
and inform other people in the organizations about the
project objectives, schedule, and so on. One common tool
used for this project authorization is a project charter.
Project charters can take several forms, such as a simple
letter of agreement, a formal contract, or an organization’s
project charter format. Key project stakeholders should
sign the project charter to acknowledge agreement on the
need and intent of the project. A project charter is a key
output of project initiation.
Table 1 provides a sample of a project charter
for upgrading a company’s information technology