Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
The Project Selection Process (“Doing the Right Thing)
After the completion of this unit, students can:
• Use project selection funnel as a strategic tool and establish project goals
• Generate and evaluate options for achieving project goals using financial analysis, as well as team-based methods such as
advantages-disadvantages, factor rating, force-field analysis, SWOT analysis and Pareto Priority Index.
• Describe the importance of a sponsor-initiated project charter and a charter
• Work with a team to establish a clear, shared understanding
• Define project deliverables and associated performance measures
Topic Outline
•The Project Selection Process
•Project Drivers: Problems and Opportunities; Causes of Problems and Opportunities
•The Project Goal and Options for Achieving the Goal
•Project Portfolio
•Project Initiation Elements
•The Project Communication Plan
•The Project Team: Understanding Contractual Relationships
•From Project Charter to Project Initiation Document
Project selection is an integral part of a company's process for choosing a project with the highest priority to
accomplish. Projects and project completion can be important in transforming a company. Selecting the right
project could create a better return on investment for a company, increase efficiencies, shorten time-to-market
and lead to successful project delivery.
What is project selection?
Project selection is the evaluation of project ideas to help decide which project has the highest priority. It's an
important part of project portfolio management (PPM), which is a process used by project management
organizations (PMOs) and project managers to analyze the potential return on undertaking a project.
Once project managers receive project ideas or proposals, they often go through a process to assess and select a
project that will move forward. Typically, when project managers select a project, they may consider the
following factors: Co-Re-Be-Ti-Ri (Cory B..
1. Costs
2. Resources
3. Benefits or ROI
4. Time to complete the project
5. Risks associated with the project
Why is project selection important?
Project selection is important because companies want to make sure projects they invest in are safe and will
yield benefits and good returns. The process of project selection can analyze new opportunities and help justify
the decisions for making needed monetary investments. Companies may have several project opportunities to
invest in, but because they can't invest in all projects, they are often selective.
How to select a project
Here are some steps you can take to select a project:
1. Make sure the project fits the company's strategy
Discuss with all stakeholders whether a project you're considering fits into the company's overall business
strategy. You can work together to identify where a project may meet a single organizational goal or multiple
goals, and whether they are short-term or long-term goals.
2. Understand your company environment
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
It's important to be you're aware of your organizational environment and understand your company thoroughly.
Consider asking yourself the following questions:
➢ What are the company's key business drivers?
➢ What are the company's strengths and weaknesses?
➢ Does the company have limited resources?
➢ If the company has resource limitations, where is it lacking?
3. Consider and analyze historical data
When you perform your analysis, consider previous experiences and refer to past information or historical data
as much as possible. Regardless of the outcome of a prior project, there are environmental and organizational
factors that likely influenced the outcome. Find out whether there are changes to those factors, and discuss them
with company executives or project stakeholders.
4. Decide who will be the project champion
It's important to ensure a project has a designed champion or owner to make sure the project stays on track and
proceeds smoothly and efficiently to completion. The project champion is often a high-level employee or
executive with an interest in the project and excellent communication skills to work with everyone involved
with the project.
Project selection methods
There are several methods you can use to help you decide which project to select. These include:
1. Cost-benefit analysis
Before you take on a new project, you can perform a cost-benefit analysis to assess all the potential costs and
income that your organization might generate from the project. The result of the analysis may uncover whether
the project is workable or if the company should consider another project.
2. Payback period
Another method you can use is the payback period, where you determine the time to recover the cost of an
investment. For instance, if you project you will spend PhP300, 000 to execute a project and expect it will
generate revenue at the rate of PhP30,000 per year, your payback period would be 10 years.
3. Discounted cash flow
A discounted cash flow (DCF) analysis allows you to estimate the money your company would receive from an
investment or project, adjusted for the time value of money. The time value of money presumes that a dollar
today is worth more than a dollar tomorrow because you have invested it. For instance, with a 5% annual
interest rate, PhP1 in a savings account will be worth PhP2.12 after a year. Likewise, if you delay a PhP1
payment for a year, its present value is 95 cents, as you can't transfer it to your savings account to earn interest.
In order to perform a DCF analysis, it's important for a company to:
➢ Make estimates about future cash flows
➢ Make estimates about the ending value of the project
➢ Determine an appropriate discount rate for the DCF model
➢ Opportunity costs
➢ Opportunity costs refer to alternative benefits the company may realize when choosing one alternative
over another. Putting opportunity costs into consideration allows you to weigh the benefits from
alternative courses of action and not just the current choice or path being considered in the cost-benefit
analysis. By factoring in all options and the potential missed opportunities, a company's cost-benefit
analysis is more in-depth and allows for better decision-making.
4. Ranking method
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
Ranking is a simple approach that ranks the projects on a scale according to their importance. The benefit of
the ranking method is its quick approach that enables you to identify top priorities. It works effectively when
there are limited criteria to assess and it's easy to evaluate the factors involved. Before you assign rankings, it's
important to ask yourself questions such as:
➢ What's the rate of return for this project?
➢ What are the qualitative and quantitative benefits to the stakeholders?
➢ How do efficiencies improve if the company executes this project?
➢ Does the company have the capability and capacity to execute the project?
5. Scoring model
The scoring model works when there are several selection criteria to consider and projects being compared are
very different. Instead of choosing one or two criteria, the scoring model considers one to two groups of factors,
such as risk, return on investment (ROI), benefits and strategic alignment. Besides assigning a rating to each
criterion, you give weight to each group. For example, the risk may have a factor of 0.75, whereas benefits may
have 1.5. You then compute the weighted score to arrive at the final project score.
6. Analytic hierarchy process
The analytic hierarchy process (AHP) combines subjective elements with mathematical models to give a
more holistic approach than other methods. The AHP method works with several selection criteria by pitting
every two criteria against each other, which decreases the likelihood of biases and errors. After this "apples to
apples" type of comparison, you can normalize the values and compute the weighted score. The AHP's strong
reliance on quantitative strategies is its strength, as it converts an abstract problem into numbers and gives
transparency to the reason behind your decision.
The Project Selection FUNNEL
The process of selecting projects is sometimes shown as a "funnel." A funnel is enormously wide at one end
and very narrow at the other. Because of the restricted financing, the funnel is narrow rather than wide. As a
result, an organization's goal is to sift through a huge number of possible projects such that just a few are
chartered.
Risk v. Issue
(sakit)
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
(prevention) (treatment)
How Problems, Opportunities & Directives Can Drive the Project Selection Process
Project selection takes place in every type of business or organization. Project managers decide which
proposed projects to take on and develop and which ones to set aside or discard based on a variety of factors.
Problems, opportunities and directives have a significant influence on the project selection process.
A. Problems
Project selection is often driven based on the needs or problems in an organization. For example, if a
company is facing a revenue decline because a product is under-performing in a given market, that becomes
a problem for the company. A project related to increasing marketing efforts, stepping up advertising and
promotional opportunities or revamping the product might become a priority project because it can help
solve the problem of revenue shortfall. Likewise, if a company needs to hire more employees to keep pace
with demand for its product, but doesn’t have the physical office space to accommodate new workers, the
project of expanding office space might become a priority because it solves the problem of workspace
scarcity.
B. Opportunities
When opportunities arise that have the potential to have a positive effect on a business or organization, fast
action is often required to take advantage of the circumstances. In this instance, an opportunity that presents
itself might drive the selection of a project to the top of the list. For example, if a company has been
considering launching a new product line and has project plans on the back burner, an opportunity to buy
product components at a significantly reduced price makes elevating the project’s status a compelling option.
C. Directives
Directives are strong requests or orders typically issued by a decision-maker in a business or organization.
When a decision-maker issues a directive for a particular project to be selected, the project usually rises to the
top of the list to accommodate the boss. For example, consider what would happen if a business decides to
undertake the project of adopting a charity to support during the holidays. If the company’s CEO sits on the
board of a particular charity and issues a directive that his charity be the one selected, this request will likely
drive the project selection to favor the boss’ charity over any other ones being considered.
D. Other Project Drivers
Other factors that can drive the project selection process include available financial resources, available
staff support, deadlines, cost projections and contractual obligations.
How to Set Your Project Goals?
Setting accurate and realistic project management goals is essential to ensure a hassle-free execution. Why?
Let’s take the example of New Coke that was introduced in 1985 to get a clearer picture:
So, in 1985, Coca-Cola introduced “New Coke”. They did their research and changed the drink
formula to make it taste better, or so they hoped. Initially, the drink was welcomed by the target
audience, but within a few weeks, the product selling margins dropped tremendously. People started to
boycott the brand and eventually, the product was discontinued in July 2002. Now, what went wrong?
The new formula was introduced to save the company about $50 million in production. So, the
company wanted to reach short-term goals without realizing the long-term consequences. Obviously,
the failure caused them more than the hypothetical savings.
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
So, what do we learn?
Prioritizing short-term goals is important, but it is also essential to keep in mind the long-term growth and
make sure decisions and goals are met accordingly. According to a recent KPMG study, only 33% of
organizations tend to deliver projects that meet their original goals and objectives. So, it is really important to
know how to set your project goals.
Project Management Goal Setting Guide: 5 Steps to Remember
Everyone in your team must have a clear idea of project goals. From goals for project managers to individual
team members, everyone needs to be on the same page. For that, there needs to be a defined process in place.
The best way to set project goals is by following these five steps:
Step 1: Identify your Goals
Step 2: Define S.M.A.R.T Goals
Step 3: Create an Action Plan
Step 4: Set Plan Into Action
Step 5: Monitor Project Execution
Step 1: Identify your Goals
Identification is the first step in the project goal-setting process. Without identifying your project goals,
nothing can be determined. So, how does one identify project goals?
Simply identify what is important. When undertaking a project, it is essential to have all three parties –
clients, managers, and team members – on the same page. Then, it is important for everyone to have a
discussion and identify what is to be achieved during the project and what’s the end goal. As a result, every
person involved in the project will understand what needs to be done and will be able to plan an effective
strategy.
Step 2: Define S.M.A.R.T Goals
Next step is to define the goals you have identified. There are multiple methods you can use, but the best way
to define project goals is the S.M.A.R.T goal method. It covers all aspects required to achieve what is
required in a particular project. It stands for:
Specific: What do you wish to achieve?
Example: Increase search engine traffic by 20%
Measurable: How will you make sure you achieve your wish?
Example: revamp high-quality blogs and add 20 new backlinks to increase SEO visibility
Achievable: Can your wish be achieved in the available resources and time?
Example: Get SEO and content team on board to achieve the goal
Realistic: Is the wish realistic, can it actually be achieved?
Example: Analyze whether the set numbers can be achieved in the defined timeframe
Time-bound: In how much time do you want to complete your goal?
Example: Increase search engine traffic in 2 months
SMART Goal: We are aiming to increase search engine traffic by 20% within 2 months. Our SEO
and content team will work together to revamp high-quality blogs and 20 new backlinks.
Step 3: Create an Action Plan
Once you have set your project goals, the next step is to create an action plan. You know what to do, but how
are you really going to get everything done?
➢ When creating an action plan, you need to think about:
➢ Who needs to be a part of the project?
➢ What will individual team members be working on?
➢ What will be the short-term tasks to achieve the ultimate goal?
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
➢ What will be the set deadlines for the timeline?
Once you have the answers to all these questions, it is essential to document all the data and ensure you have
a clear idea of how the defined goal will be achieved.
Step 4: Set Plan Into Action
After creating an action plan, the next step to set the plan into action! This step usually includes:
➢ Assigning tasks to individual team members
➢ Setting deadlines for each task
➢ Providing resources to make sure everything is executed in time
Step 5: Monitor Project Execution
The last step in the goal-setting process is monitoring project execution. Imagine you have set your
S.M.A.R.T goal, created an action plan, and assigned tasks to the relevant team members – is that all? No! It
is crucial for project managers to monitor project execution and make sure everything is on track. This not
only ensures that quality standards are met, but it also makes sure all the deadlines are met hassle-free,
without any confusion.
Both project execution and client relationships go hand-in-hand because when you execute planned project
activities in an appropriate manner, odds of securing desired deliverables improve significantly. It lets you
keep clients’ trust and loyalty for ages, which, in turn, gives your business invaluable stability.
Summary Questions:
Now that you have a little idea about how to set your project goal, let us cover a few basic questions asked
around project goals:
Q1. What are the goals of a project?
Project goal can be defined as the desired outcome one wants after completing a project. Goals must have a
time goal, resource goal, and performance goal.
Q2. What are the five steps to setting a goal?
The six steps to setting a goal are identify your goals, define S.M.A.R.T goals, create an action plan, set plan
into action, and monitor project execution.
Q3. What are some examples of professional goals?
Some good goals to set includes improve work performance, strengthen work relationships, train yourself to
gain knowledge, etc.
Project portfolio management
Project portfolio management is the centralized management of one or more project portfolios to achieve
the strategic objectives of the business. Project portfolio management connects strategy and implementation
and is typically led by the Project Management Office (PMO).
Project portfolio management and project management efforts do not operate in a vacuum. They are by nature
intricately tied to other facets of the business and, in many cases, to other applications.
For example, companies often integrate project portfolio management software with enterprise resource
planning (ERP) systems, enterprise architecture applications, or other corporate applications, such as
financial systems. The project planning office often coordinates with the legal, finance, and human resources
departments to link their respective systems and applications where appropriate.
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
Project initiation: The first step to successful project management
Project initiation ensures that you lay a strong foundation for a new project. It’s the first of five project
management phases.
“Let’s start at the very beginning, a very good place to start.”
Project initiation vs. project planning
During the project initiation phase, you define your project at a high level in order to demonstrate its business
value. Once you secure buy-in from key stakeholders and prove that your project is feasible, you then move
on to the project planning phase. That’s when you define your specific objectives, deliverables, and project
roadmap in more detail.
Why does the project initiation phase matter?
Starting a new project is exciting, but it’s important to make sure your initiative will actually add value before
jumping into the planning phase. That’s where project initiation comes in—it offers a structured approach to
demonstrate your project’s business case and prove that the work you’ll do is feasible. Project initiation also
ensures that you loop in stakeholders early on, so you can secure essential resources, gain visibility for your
project, and prevent costly roadblocks down the road.
Project Communication Plan
In project management, one of the most effective ways of keeping stakeholders and teams aligned is through
the use of a communication plan.
Why effective communication matters
Effective communication matters because breakdowns often occur when goals are not aligned, emails get
lost, and the right tools aren’t created.
One PMI survey found that 30% of respondents identified “poor communication” as the primary reason for
scope gap and project failure. And, considering the cost of failure, it’s no wonder a communication plan is
necessary for every project you launch.
What is a project communication plan?
A project communication plan is an agreement between collaborators and stakeholders that outlines what,
when, and how information will be shared at key intervals. Information like status updates, task-related
questions, and meeting details should all be included in this written guide. The goal is to define and
streamline team communications as much as possible.
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
Why is a communication plan important in project management?
A communication plan is important in project management because it helps get stakeholders, clients,
freelancers, and team members all on the same page.
Communication plans fail if there is excessive discussion around the project or the scope of each interaction
(like detailed copy notes versus big picture suggestions) isn’t defined. These issues can have a significant
effect on deadlines and budgets.
A project communication plan also establishes professional boundaries. For example, your stakeholders
may want to limit their interaction to email, whereas your freelancers may be comfortable with texting when
the conversation is time-sensitive.
What goes into a good communication plan in project management?
Here’s what every good communication plan in project management includes:
➢ A contact sheet with collaborator roles and relevant contact information that highlights project phase
owners
➢ List what needs to be communicated throughout the project, like meeting updates and content
outlines
➢ Include the five Ws of virtual communication (who, what, where, when, why) for each major
communication type
➢ Highlight good things to know regarding formality, personal pronouns, or special requests from
collaborators
➢ Create a schedule of events for any pre-planned phone calls, virtual status meetings that actually
work, and digital check-ins
➢ Designate status update types, where they will be located, and who will update them
➢ Assign reviewers to tasks that require them
➢ Define the communication method, date/time, and frequency of each major communication type
➢ Communication
What Is a Project Initiation Document (PID)?
A project initiation document (PID) is used to define the project thoroughly. It’s similar to a project charter
but more [Link] the project initiation document is the last part of the project initiation phase, it can
be looked at as the basis of the project plan that occurs in the next stage.
What Should Be Included in a Project Initiation Document?
1. Project Definition
To begin, the project initiation document briefly summarizes the project and goes into a short description of
the following.
Purpose: The reason for the project, whether that’s a new product, filling a market niche, etc.
Goals & objectives: Define the goals, long-term outcomes, and the objectives, short-term outcomes,
of the project.
Success criteria: Explain how you’ll measure the project to determine if it’s successful or not.
Assumptions & constraints: List what you assume is true and what you’ve proven true in terms of
what can impact the project.
2. Business Case
The business case is the document that justifies the project. It’s similar to what’s discussed in the project
definition but goes into greater detail. It’ll define such things as the benefits of the project, its cost and risk,
etc.
3. Project Scope
This is where you outline everything that must be done to complete the project, including defining its goals,
constraints and workflow management.
4. Project Budget
Here’s where you’ll make the most accurate estimation of project costs possible. This is done through a
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
number of different techniques, as you want to be as close to the actual cost as you can to avoid losing
money. Therefore, use expert opinions, historical data and break down the project into tasks and estimate the
costs associated with those tasks to get your budget.
5. Project Timeline
Having all your deliverables, activities and tasks listed will help you schedule the project. Each task should
have a beginning date and an ending date. Then you’ll want to place the tasks on a visual timeline so you can
see the entire project laid out on one page.
6. Project Breakdown
To avoid accidentally overlooking a task in your project timeline, use a work breakdown structure. This is a
hierarchical tree chart with the final deliverable on top and all the other deliverables that get you there
branching down from there. Knowing all your deliverables will help you determine all the tasks necessary to
produce them.
7. Resource Plan
Resources are all the things you need to execute the project, which includes your team, equipment, materials,
etc. This document will list all those resources, how much of each you need and when you’ll need them. This
effort will be coordinated to be as efficient as possible.
8. Risk Plan
Risk is inherent in all projects, whether positive or negative and must be accounted for. The risk plan will
identify these risks and what to do with them if they become issues in the project. You’ll want to assign a
team member to respond to them and set a priority, impact and likelihood of occurrence.
9. Change Management Plan
Change is another given in a project, which is where the change management plan comes into play. It creates
a process to manage those changes so they can be reviewed and approved or rejected. If approved, the plan
will also detail how the change will be communicated and implemented into the project.
10. Project Team Roles & Responsibilities
➢ Define project deliverables and associated performance measures
This document will define the roles and responsibilities of everyone involved in the project. It’ll also explain
who to report to and who on the team will answer any questions the team member might have. This will be
clearly communicated to everyone prior to starting the project.
11. Project Controls
To keep projects on schedule, managers must monitor their progress and performance. Project controls are
used to ensure the project aligns with its plan and budget, performs as expected and meets quality standards.
12. Communication Plan
Stakeholders need to be kept informed, but they don’t need to get into the weeds of the project. The
communication plan defines who needs to know what, how frequently they should be updated and what is
their preferred method of getting data. The communication plan can also incorporate keeping everyone on the
project team informed as well.
How can you strengthen relationships with project teams and external partners?
As a project leader, you know how important it is to build strong relationships with your project teams and
external partners. These relationships can enhance collaboration, communication, trust, and performance. But
how can you strengthen them in a practical and effective way?
1. Know your stakeholders
The first step to strengthening relationships is to identify and understand your stakeholders. Stakeholders are
anyone who has an interest or influence in your project, such as team members, sponsors, clients, suppliers,
end-users, and regulators. You need to know their roles, expectations, needs, preferences, and potential
issues. You can use tools like stakeholder analysis, stakeholder mapping, and stakeholder engagement plan to
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Professorial Lecturer: The Project Selection Process
Dr. Domingo T. Balse, Jr, LPT Lecture Notes
help you.
2. Communicate clearly and frequently
The second step to strengthening relationships is to communicate clearly and frequently with your
stakeholders. Communication is the key to establishing trust, transparency, and alignment. You need to
communicate the project goals, scope, progress, risks, issues, and changes. You also need to listen to
feedback, concerns, and suggestions. You can use tools like communication plan, status reports, meetings,
emails, and surveys to help you.
3. Appreciate and recognize contributions
The third step to strengthening relationships is to appreciate and recognize the contributions of your project
teams and external partners. Appreciation and recognition can boost motivation, morale, and loyalty. You
need to acknowledge the efforts, achievements, and challenges of your stakeholders. You also need to
celebrate the milestones, successes, and learnings of your project. You can use tools like thank-you notes,
awards, rewards, and testimonials to help you.
4. Manage conflicts and expectations
The fourth step to strengthening relationships is to manage conflicts and expectations with your project teams
and external partners. Conflicts and expectations are inevitable in any project, and they can damage
relationships if not handled well. You need to address conflicts constructively, respectfully, and timely. You
also need to manage expectations realistically, proactively, and flexibly. You can use tools like conflict
resolution, negotiation, mediation, and change management to help you.
5. Collaborate and co-create
The fifth step to strengthening relationships is to collaborate and co-create with your project teams and
external partners. Collaboration and co-creation can foster innovation, creativity, and ownership. You need to
involve your stakeholders in the planning, decision-making, problem-solving, and delivery of your project.
You also need to leverage their skills, knowledge, and perspectives. You can use tools like brainstorming,
workshops, prototyping, and feedback loops to help you.
6. Build rapport and trust
The sixth step to strengthening relationships is to build rapport and trust with your project teams and external
partners. Rapport and trust are the foundation of any successful relationship. You need to show genuine
interest, respect, and empathy for your stakeholders. You also need to be honest, reliable, and accountable for
your actions. You can use tools like icebreakers, social events, personal stories, and feedback sessions to help
you.
References
1. Brown, Karen. A and Hyer, Nancy Lea (2010); Managing projects: A team-based approach; InternationalEdition, McGraw-Hill.
2. Kumar, V. S. (2009). Essential leadership skills for project managers. Paper presented at PMI® Global Congress 2009—North America, Orlando, FL.
Newtown Square, PA: Project Management Institute.
3. Lester, Albert (2007); Project Management, PlanningandControl; 5thEdition, Elsevier.
4. Project Management Institute (PMI) (2013); A Guide to the Project Management Body of Knowledge (PMBOK®), 5thedition.
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