Have you ever felt overwhelmed by so many to-do tasks scrambling for your attention? It can be a confusing place to be.
As a project manager or a business owner, you are sometimes confronted by this daily reality. But sadly, you can only focus on one at a time.
This is where project prioritization comes in, especially if you have limited resources to execute all the tasks. This is the only way to deliver excellent results and accelerate growth in your organization.
Prioritization is an integral part of the portfolio management and project management process, and it is critical to their success.
To do this adequately, you must create a list of all your tasks, define your prioritization criteria, and identify your important tasks. Then evaluate the value of the task, and order them based on estimated effort.
This article will tell you everything you need to know about project prioritization and why it benefits your project. It will also examine effective project prioritization strategies and how you can prioritize tasks.
What is project prioritization?
Project prioritization is the process of determining which of the projects in your organization is the most urgent, crucial, and impactful.
Prioritizing projects has become one of the things project managers need to do to achieve a better outcome.
Most importantly, when you do not have enough resources to work on everything simultaneously, it becomes vital to set your priorities right.
Developing a project prioritization process will enable you to narrow down the tasks that need to be carried out to deliver the best result.
Why do you need to have a project prioritization process?
When you have a series of new and existing projects, it may be difficult to know the ones to focus on.
Here is why you need to have a project prioritization process.
👉 Check also our article and find out How to prioritize work when everything’s important?
Maximize limited resources
How do you assess the project that will deliver the most value? Project prioritization helps organizations or businesses with multiple projects to execute to allocate their limited resources appropriately.
It ensures that the resources are committed to high-value projects and are not being exhausted on less critical assignments.
An accurate report of the time spent on each project will help you estimate the cost of future projects and how you can allocate your resources adequately.
A time-tracking app will help you keep track of time and provide accurate data to help you make an informed decision.
Increases efficiency of the project manager
The project prioritization process helps to improve efficiency. When projects are categorized based on their level of importance, it will be easier for them to be managed.
It will help you select the tasks that need your urgent attention, tasks you can delegate, and those that can be removed immediately.
Strategic alignment
One of the objectives of project prioritization is to ensure a strategic alignment of all stakeholders and internal and external elements of an organization.
High ROI
When your projects align with your business objectives and overall company goal, it improves profitability and leads to a higher ROI.
👉 To check out your company’s ROI visit our page with ROI calculator to find out!
Boosts the success rate of a project
Effective project prioritization enables the project managers and team members to know the specific project to focus on one day at a time. This, in turn, minimizes error, boosts productivity, and increases efficiency.
Removal of obsolete tasks
With project prioritization, only strategically aligned projects will receive approval and full attention, while obsolete tasks will be identified and removed. But first, you need to find out the time-consuming unimportant activities your team is engaged in and remove them using time-tracking software.
Encourages team cohesion
Prioritizing projects helps to decrease stress among project teams by increasing the visibility of a project and improving team communication.
It makes it easier to assign tasks, track progress, and measure the productivity of team members when you integrate an effective time tracker with project management software.
Strengthens the commitment of team members
Value-based prioritization helps the project team understand its importance and why it has been prioritized. It will make them commit fully to the success of the project.
Because you have set clear expectations, which will help boost their productivity. Everybody will have one goal: contributing their own quota to its success.
Effective project prioritization strategies
There is a wide range of project prioritization strategies you can utilize to manage your project portfolios, and they include
Payback period
This is a straightforward project prioritization technique whereby managers can calculate how long it will take to recoup the investment they made on a project.
It is calculated using this method: Payback Period=Initial Investment ÷ Annual Cash Flow.
Thus, this project prioritization criterion is based on how quickly the project benefits will match the initial investment.
Strengths of the payback period
- The payback period is very simple to calculate and does not have many complexities.
- It helps to evaluate the reliability of a project.
- Small businesses with little funds can easily decide on the project that will pay off the most.
Weaknesses of the payback period
- It does not consider the time value of money in its calculation, the effects of inflation, and the complexity of investments.
- It does not consider the overall profit of a project; it only factors in short-term cash flow.
- The emphasis on short-term gains does not consider that a project can take longer to recoup investments but may still be a good project for the business or brand’s reputation.
Scoring model
This model ranks projects based on specific criteria such as cost, financial returns, feasibility, and risk level. The different aspects of the task are evaluated, and a numeric value is assigned to each criterion. It is usually carried out by specialists or subject matter experts.
To make the most out of this model, you must select the most crucial factors for your organization and evaluate them appropriately.
Strengths of the scoring model
- This technique allows for knowledge sharing by subject matter experts. They translate their knowledge into score-based applications. Others can learn from their decision-making process.
- This model is objective because the project prioritization criteria are defined in the scoring model. Decisions are not based on individual interpretations or personal experiences.
- Organizations can identify criteria relevant to their specific situation.
- This model is efficient because it standardizes the decision-making process.
Weaknesses of the scoring model
- This technique may not always predict what will happen in a market.
- It may be difficult to assign a numerical value to abstract concepts.
- There is a limited view of every aspect of the project. As a result, you stand the risk of overlooking an important criterion.
Project prioritization matrix
Project managers and portfolio managers use this tool to assess the task that matters the most. It requires comparing many project prioritization variables using a single comparison matrix.
To enable the team members to know which task needs their immediate attention, the projects are typically arranged in this order:
- Important and urgent
- Important but not urgent
- Urgent but not important
- Not urgent and not important
Strengths
- It is used to identify high-priority projects among multiple tasks.
- They are simple and customizable.
- It helps break down complex issues when there are numerous factors affecting decision-making.
Weaknesses
- It cannot properly evaluate tasks based on various criteria. Therefore, it cannot do an excellent job of distinguishing the most important projects from the less important projects.
- It cannot present a rank-ordered list of projects in a portfolio. It can only present a categorical ranking in a portfolio.
The MoSCoW technique
This is a four-step method used to determine essential projects for the organization.
It is an acronym that shows four categories of initiatives:
- Must-have: This represents mandatory initiatives that need your team’s attention.
- Should-have: These are essential categories, categories, but they are less vital than the first category.
- Could-have: They are not necessary to the core part of the project. Just a nice-to-have initiative.
- Will-not have: This category is for projects that are not a priority or projects that can be eliminated.
The strength of this method is that it is simple and quick to use. But the downside is that it is only suitable for less complex projects.
The Kano model
This technique is used to prioritize parts of a project during the definition stage. It is also used to prioritize features on a product roadmap according to the extent they are likely to satisfy the users.
The product management team will evaluate the high satisfaction rate against the implementation cost to determine whether adding it to the roadmap is a good idea.
The key focus of this method is the satisfaction of the end-users or the customers. Therefore, the features are categorized into two scales; satisfaction and functionality.
Strengths
- This model makes it easy to choose essential features necessary for customer satisfaction when the resources are limited.
- Organizations can understand the needs of their customers more than the customers understand their own needs.
- It is a customer-centric approach to product development.
Weaknesses
- Performing a complete analysis using this model can take time.
- It does not put into consideration the cost of building a product feature.
Net present value
This project prioritization system evaluates how much money a project will gain or lose in terms of its present value. It is used in cost-benefit analysis when it is a vital factor in determining the profitability of a project.
Strengths
- It considers the cost of capital and risk factors when making future projections.
- It can be used to determine the profitability index of a project.
- It takes into consideration all the cash flows.
- It determines the value outcomes.
Weaknesses
- This model focuses on short-term projects instead of long-term results.
- It doesn’t consider the sunk cost figures when calculating the cash flow.
- It can be challenging to estimate some costs when calculating the NPV.
- NPV is not beneficial when comparing two projects of different sizes.
- It takes an optimistic approach when making future projections.
How to prioritize projects
Prioritize your projects in these 6 simple steps
1. Create a list of all your tasks
Make a list of all the tasks you need to complete. It will help you determine how you can allocate your time.
At this stage, you do not need to write them in sequential order.
2. Define your prioritization criteria
Decide on the variables you will use in building your prioritization criteria, such as cost-benefit analysis, potential risks, resources, and project length.
3. Categorize all the urgent and important tasks
With the prioritization criteria, map out all the tasks that need to be completed urgently and the important ones.
These should be tasks that, when they are left unattended, can cause significant negative consequences for you or your business.
4. Evaluate the value of the tasks
Assess all the crucial tasks you need to attend to. Then, Identify high-priority tasks that will provide the most value to your business or organization.
For instance, sending a proposal to a potential client is a high-value task that can bring funds into your organization compared to writing down an inventory of the resources you need in the office.
This is like the eat-the-frog technique, where you tackle the most significant task first.
Using priority matrix, the tasks can be grouped into these four categories:
- Important and urgent: These are high-value and time-sensitive tasks requiring immediate attention. It may include crisis management tasks or project deadlines for clients.
- Important but not urgent: These are high-priority tasks, but they are not time sensitive. It could be meetings with your team members.
- Urgent but not important: These are time-sensitive tasks but can be performed by someone else. In this case, you should delegate them.
- Not urgent and not important: These are low-priority tasks. Either you schedule them for later in the week or eliminate them.
5. Order tasks using effort estimation
If you have multiple urgent projects competing for the same resources with clashing deadlines, you need to prioritize based on estimated effort. Simply put, you must determine the task that requires the most effort.
When faced with several high-priority, time-sensitive, and high-value tasks, start with the one that would need extra effort to complete.
You can also start with the one that may take the most time. But at the end of the day, you can decide which one to focus on first.
6. Manage your project efficiently
To align your business objectives with your prioritization strategies, you need to manage your project efficiently.
Remember that your priorities may change along the way so learn to be flexible and adaptable.
Also, keep in mind that your team is the lifeblood of your project. Therefore, you need to monitor their progress. Use a time tracking software that will give you detailed reports about their activities as well as help you track the budget and deadline.
Takeaway: Discover the project that is most valuable to your organization through project prioritization
Prioritizing tasks helps you allocate resources easily in your organization, especially when working with limited resources.
There are several prioritization strategies. The strategy to utilize depends on the specific needs of your organization.
Some of them are the Payback period, scoring model, project prioritization matrix, MosCow method, Net Present Value, and Kano method.
Whichever technique you choose, you need to manage the project efficiently because it will determine the project’s failure or success.
You need to assess the accuracy of work estimates and the effectiveness of your employees and meet your deadlines.
To get a complete report of your project activities, Sign up on TimeCamp today!