The Process of Project Selection

- The Whats, Whys, Whens, Hows and Whos involved -

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“The first – and usually the best – opportunity for successful change is
to exploit one’s own successes and build on them. Problems cannot be
ignored. And serious problems have to be taken care of. But to be change
leaders, enterprises have to focus on opportunities. They have to starve
problems and feed opportunities.”

Peter Drucker

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Introduction..........................................................................................................................................4.

What is Project Selection?.....................................................................................................................5.

Why Do Project Selection?.....................................................................................................................7.

When to Do?..........................................................................................................................................9.

Who Should Be Involved?.....................................................................................................................10.

A Diagram Overview............................................................................................................................11.

Defining Project Selection Criteria –
Examples, Advantages and Disadvantages.........................................................................................12.

Case Study 1 – The formation of a Steering Committee……………………………………………………………………..12.

Case Study 2 – Choosing one of two methods:
Benefit Measurement and Constrained Optimization………………………………………………………………………..15.

Conclusion...........................................................................................................................................20.

Bibliography........................................................................................................................................21.
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 One of the biggest decisions that any organization would have to make is
related to the projects they would undertake. Once a proposal has been
received, there are numerous factors that need to be considered before an
organization decides to take it up. The most viable option needs to be chosen,
keeping in mind the goals and requirements of the organization.

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 Project Selection is a process to assess each project
idea and select the project with the highest priority.
Projects are still just suggestions at this stage, so the
selection is often made based on only brief
descriptions of the project. As some projects will only
be ideas, one may need to write a brief description of
each project before conducting the selection process.

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 Selection of projects is based on:

 Benefits: A measure of the positive outcomes of the project. These
are often described as "the reasons why you are undertaking the
project". The types of benefits of eradication projects include:
 Biodiversity
 Economic
 Social and cultural
 Fulfilling commitments made as part of national, regional or
international plans and agreements.
 Feasibility: A measure of the likelihood of the project being a
success, i.e. achieving its objectives. Projects vary greatly in
complexity and risk. By considering feasibility when selecting
projects it means the easiest projects with the greatest benefits are
given priority.

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 Often one will have a number of suggested projects but not enough resources,
money or time to undertake all of the projects. The ideas for eradication
projects may have come from many sources including: the community,
funders, local and national governments and Non-Governmental
Organizations (NGOs). One will therefore need a way of deciding on a
priority order and choosing a project.
 If the organization in question has limited experience in conducting
eradications then it is recommended to concentrate on a small number of
projects, ideally one project at a time, until the people in the organization
have developed the skills and experience. It’s important to grow capacity and
build up to undertaking multiple projects at any one time. One should do the
easy projects first and, only then, work towards the most difficult and
rewarding projects. One should use the easy projects to help answer
questions/solve issues for the more difficult projects. Also, one should use the
best opportunities to learn.

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 One may have a mix of straight forward and difficult
eradication projects and does not know where to start. The
Project Selection Stage, then, will assist one by providing a
process to compare the importance of the projects and select
the most suitable project to undertake.
 By following the Project Selection Stage one will follow a step
by step objective method for prioritizing projects - this can be
used to explain to stakeholders the reasoning behind why one
selected a particular project.
 The benefits of completing the Project Selection are:
 A transparent and documented record of why a
particular project was selected.
 A priority order for projects, that takes into account their
importance and how achievable the project is.

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 Undertake a Project Selection when one has
more ideas than the number of projects one can
undertake and need to select the project that
should be given priority.
 Note: If one only has 1 project in hands, it may
still be useful to score the project against a set of
criteria to identify the strengths and
weaknesses of the project. The results may be
useful later in the Feasibility Study Stage.

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 Agency Management:
 Set selection criteria to ensure the selection process aligns with agency strategies.
 Selection processes are often run as a management initiative before the
implementing Project Manager (PM) is assigned.
 Stakeholders:
 Stakeholder participation at the start of a project creates strong community
ownership and support, and increases the chances of a successful outcome.
 Stakeholder input should be included at the ideas stage; one should consult widely
as one is developing the ideas for projects as the community will be the source of
many of the best project ideas.
 Stakeholders must be informed of the outcome of the Project Selection Stage.
 PM:
 Involving the PM in the Project Selection process will help build ownership in the
project and support a successful project in the long run.

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 Each project idea is scored against the selection criteria and a total project score is calculated. By ranking the ideas in
order of the highest score one is able to see which idea has the highest priority. This procedure gives one the ability to
take a number of possible projects and identify which project is most important to first move to the Feasibility Study
Stage. This Stage is not required if one only has one project idea. A diagram overview follows below:

(source: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection-Diagram.html)

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① Case Study 1 – The formation of a Steering Committee

 Most organizations have a formal, or at least semiformal, process to select and
prioritize projects.
 A steering committee is responsible for project review, selection, and
prioritization. It is a group of people comprised of senior managers and
sometimes midlevel managers who represent each of the functional areas in
the organization.
 Below, follows how it works:
 The steering committee requests project ideas from the business staff prior
to the beginning of the fiscal year.
 A special steering committee meeting is called to review the projects, and
a determination is made on each project as to whether it will be included
on the upcoming list of projects for the new year. Once the no-go projects
have been weeded out, the remaining projects are prioritized according to
their importance and benefit to the organization. The projects are
documented on an official project list, and progress is reported on the
active projects at the regular monthly steering committee meetings.

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 In theory, it’s a great idea. In practice, it works only moderately well.
Priorities can and do change throughout the year. New projects come up
that weren’t originally submitted during the call for projects that must be
added to the list. Reprioritization begins anew, and resource alignment
and assignments are shuffled. But again, “we’re getting ahead of ourselves”.
One should be aware that organizations usually have a process to recognize
and screen project requests, accept or reject those requests based on some
selection criteria, and prioritize the projects based on some criteria.
 Large, complex projects may be subject to further review via a feasibility
study before a decision can be made to accept the project. Feasibility
studies determine the viability of the project and help the company
determine if the product or service of the project is marketable, profitable,
safe, and doable.
 What’s the criteria? Well, project selection criteria is an input to the
project Initiation process. According to the Guide to the PMBOK, project
selection criteria is concerned with the product of the project. In other
words, selection criteria is concerned with what the product or service of
the project will produce and how it will benefit the company.

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 Selection criteria concerns every area of business from marketing to
finance to information technology to human resources. It can be subjective
or objective. Criteria for judging project selection could include financial
measurements. For example, the selection criteria might dictate that
projects must increase profits by a certain percentage in order to be
considered.
 Equally, project selection criteria might include the criteria that an
increase in market share or an increase in the public awareness of the
company or product will be enjoyed as a result of this project. There aren’t
any rules for project selection as the components of selection criteria are
up to the company, steering committee, or project review committee to
determine.
 Predetermined selection criteria, such as mentioned above, is one aspect
of project selection, but so is the individual opinion, and power, of
selection committee members. One mustn't underestimate the
importance of the authority, political standing, and individual aspirations
of selection committee members. Those committee members who happen
to carry a lot of weight in company circles, so to speak, are likely to get
their projects approved just on the fact that they are who they are. This is
sometimes how project selection works in an organization.

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② Case Study 2 – Choosing one of two methods: Benefit Measurement and
Constrained Optimization
 There are various project selection methods practiced by the modern business organizations. These
methods have different features and characteristics. Therefore, each selection method is best for
different organizations.
 Although there are many differences between these project selection methods, usually the underlying
concepts and principles are the same.
 Below is an illustration of two of such methods (Benefit Measurement and Constrained
Optimization methods):

(source: http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection-Diagram.html) 15

 As the value of one project would need to be compared against the
other projects, one could use the benefit measurement methods. This
could include various techniques, of which the following are the most
common:
 The PM and his/her team could come up with certain criteria that
he/she wants his/her ideal project objectives to meet. The PM
could then give each project scores based on how they rate in each
of these criteria, and then choose the project with the highest
score.
 When it comes to the Discounted Cash flow method, the future
value of a project is ascertained by considering the present value
and the interest earned on the money. The higher the present value
of the project, the better it would be for the organization in
question.
 The rate of return received from the money is what is known as the
IRR. Here again, one needs to be looking for a high rate of return
from the project.

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 The mathematical approach is commonly used for larger projects. The
constrained optimization methods require several calculations in order to
decide on whether or not a project should be rejected.
 Cost-benefit analysis is used by several organizations to assist them to make
their selections. Going by this method, one would have to consider all the
positive aspects of the project, which is the benefits, and then deduct the
negative aspects (or the costs) from the benefits. Based on the results one
receives for different projects, one could choose which option would be the
most viable and financially rewarding.
 These benefits and costs need to be carefully considered and quantified in
order to arrive at a proper conclusion. Questions that one may want to consider
asking are in the selection process are:
1) Would this decision help me to increase organizational value in the long
run?
2) How long will the equipment last for?
3) Would I be able to cut down on costs as I go along?

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 In addition to these methods, one could also consider
choosing based on opportunity cost. In other words,
when choosing any project, one would need to keep in
mind the profits that one would make if he/she does
decide to go ahead with the project.
 Profit optimization is therefore the ultimate goal. One
needs to consider the difference between the profits of
the project one is primarily interested in, and the next
best alternative.

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 Regarding the implementation of the chosen method:
 The methods described on the previous pages can
be carried out in various combinations. It is best
that one tries out different methods, as in this way
one would be able to make the best decision for
the organization in question considering a wide
range of factors rather than concentrating on just
a few. Careful consideration would therefore need
to be given to each project.

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 All the project selection process (es) and methods
emphasized and described along this presentation are
absolutely essential for an efficient business planning.
 It is always best to have a good plan from the
inception, with a list of criteria to be considered and
goals to be achieved. This will guide one through the
entire selection process, and will also ensure that one
does makes the right choice.

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 Internet Resources
 Defining Project Selection Criteria (Webpage)
Available from:
http://projectcmd.blogspot.pt/2009/12/defining-project-selection-criteria.html
(accessed Saturday, 18. November 2012).

 Peter Drucker Quotes (Webpage)
Available from:
http://www.the-happy-manager.com/tips/peter-drucker-quotes/

 Project Selection (Webpage)
Available from:
http://www.pacificinvasivesinitiative.org/rk/project/1_Project_Selection.html

 Project Selection Methods (Webpage)
Available from:
http://www.tutorialspoint.com/management_concepts/project_selection_method.htm

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The Process of Project Selection

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