Enterprise information technology departments often struggle to prioritize the projects assigned to them. Companies have trouble aligning individual projects with their business’ overall objectives: In many cases, certain tasks are prioritized simply because they were assigned by a powerful person within the organization, irrespective of whether or not the project is an urgent priority. Prioritizing tasks on a reactive basis isn’t good for a company’s overall health. In fact, it often results in IT teams getting stuck in an incessant “hamster wheel” of work, with no way to tie the completed work to overall business objectives. Without systems to prioritize the right IT projects and tie technology initiatives to specific business objectives, much of the work being done by IT is often viewed as misaligned with core business initiatives and therefore a waste of time, effort, and dollars. In order to facilitate a better workflow, reduce costs, and better identify and prioritize low-risk, high-reward projects, it is useful for an enterprise to prioritize technology initiatives according to a standard scoring system. How Leading Organizations Are Benefitting from Scoring & Prioritizing Tech Initiatives that Are High Strategy, High Return & Low Risk “Research by MIT and others has demonstrated that a strong governance model is a key differentiator between companies that get the most from their investments in IT and those that don’t.” - Forrester Research What Does Scoring & Prioritization Mean? Numerous companies are now using scoring and prioritization methods in an effort to reduce operating expenses and streamline the company’s objectives. For instance, Gartner recently referenced a large, US-based conglomerate that not only scores and prioritizes initiatives, but bases the compensation of its employees directly on the outcomes of such projects. This innovative approach results in projects that directly meet the company’s stated objectives and rarely run over budget. Implementing a scoring and prioritization process can bring significant advantages to any organization, such as: Ensuring that work that directly drives toward business goals is the highest priority for the IT team• Confirming that projects currently in the pipeline align with the objectives of the business Freeing resource capacity from irrelevant work, which optimizes resources for high-priority strategic projects Eliminating IT’s tendency to reactively prioritize work requests based on politically-driven decision-making “Most IT departments already have a process in place for work requests,” said George Shaheen, a sales consultant at Innotas. “By simply adding one more step to this process where the request is scored based on a generally accepted scoring framework, the IT department can properly ensure that the highest scoring work, which is best aligned with business goals, is picked up for execution.” A Three-Step Framework for Approaching Scoring & Prioritization Step #1 - How to Categorize Potential Projects IT decision-makers often have difficulty measuring the value of potential projects. Judging value according to a project’s predicted financial return is not recommended, as this perspective would deprioritize many of the technological innovations that enterprises need to further scale their companies; rather, consider adapting a criteria scale, based on Gartner’s five-perspectives methodology : I. Strategic alignment - How well does the IT investment strategy align with the long-term goals of the business? II. Business process impact - How much would the initiative force the company to change existing business processes? III. Technical architecture - How scalable, resilient, and simple to integrate with existing technology are the databases, operating systems, applications, and networks that would be implemented? IV. Direct payback - What benefits does the initiative have in terms of cost savings, access to increased information, or other advantages? V. Risk - How likely is it that the initiative will fail to meet expectations, and what are the costs involved? Step #2 - How to Build Scoring Models In addition to determining criteria for categorizing projects, it’s also essential for organizations to determine a methodology for scoring. There are several models to choose from: I. No range and unweighted Under this model, a project receives one point for each criterion met, and projects will be chosen based on the total number of points. In this model, however, all criteria are assumed to be of equal importance, and it does not allow companies to determine to what extent criteria points are met. II. Range and unweighted This model differs from the previous example in that, rather than receiving zero or one point for each criterion, the project is scored on a range (i.e., from one to five). This option provides a more detailed analysis of how projects fit with corporate goals. III. Weighted scoring In addition to scoring criteria on a range, this option provides a weighted score for each criterion to determine how important each consideration is to the organization overall. This scoring model provides a more comprehensive look at how well a project fits the company’s priorities. When creating weighted scoring models, companies should break down the importance of the top priorities of the business to determine how much value to assign to each one, adding up to a total of 100 percent. As a company refocuses its objectives over time, the weighting calculations may be modified to fit with the organization’s current goals. In determining a ranking score for each criterion, businesses can build charts that clearly define each numerical value’s role, from zero (“does not meet objectives”) to the highest value (i.e., five or 10), which is reserved for projects that closely align with the company’s goals. Step #3 - How to Prioritize Projects Based on Plotted Scores Once a company has determined a scoring methodology and taken the time to rate potential projects according to a set of criteria and their weighted values, executives must then prioritize upcoming projects based on values such as the project’s relevance to overall strategy, potential return on investment, and the amount of risk involved. High-strategy, high-return, low-risk projects will generally be seen as high priority, but it may be more difficult to determine prioritization order for projects with less certain outcomes. In such situations, it may be helpful to use visual modeling tools. Several visual modeling options include: I. A bubble chart that illustrates strategy (x-axis), return (y-axis), and project size (bubble size) - See example below. II. A bubble chart that illustrates strategy (x-axis), risk (y-axis), and return (bubble size) III. An organized list sorted by overall score, from high to low Project Prioritization Matrix Template Implementing a scoring and prioritization system for new IT projects is a simple process, as a recent use case from Innotas illustrates. According to the model, the first step is for company decisionmakers to collectively develop a framework — or multiple frameworks that apply to different types of projects — that can be used to score proposed projects and identify those of the highest priority. Innotas categorizes its scoring criteria based on a set of defined objectives that align with the company’s long-term goals: 1. BusinessObjectives: • to increase customer satisfaction and retention • to build a best-in-class workplace • to expand into new markets • to foster environmental responsibility 2. Project Type Discretionary: • creates a strategic market advantage for future prospects • enables Innotas to run the business more effectively • improves the efficiency of the IT department Non-discretionary: • regulatory/compliance-based • operational continuity A Case In Point: A Use Case for Scoring & Prioritizing IT Projects • mandatory maintenance and repair 3. Project Size (Small, Medium, or Large) • cost • project duration • employee time involved Each criterion’s score is then weighted according to how well it fits each of five scoring categories, which closely correlate to Gartner’s methodology: 1. Strategy (25%) - the initiative’s alignment with longterm strategy 2. Financial (25%) - the financial benefits that the initiative can deliver 3. Technology (20%) - the initiative’s alignment to existing enterprise technology 4. Process (15%) - the initiative’s alignment with existing or future business practices 5. Delivery (15%) - the likelihood that the initiative will fail or underperform Scoring & Prioritization Example Conclusion: Efficient, Aligned IT Operations through Scoring and Prioritization Progressive executives and IT managers are now adding scoring and prioritization systems as a new step in the work approval process, ensuring that all new projects are scored and prioritized prior to final approval. “By implementing a process like this, you can ensure the right work gets picked up for execution based on how well it drives toward business objectives,” said Shaheen of Innotas. When proposed projects receive scores below a company’s cut-off line, it’s advisable to halt or decline these projects. The company should instead analyze its budgets to execute more work that directly aligns with the company’s short- or long-term goals. It’s crucial for company leaders to revisit the scoring values and criteria on a regular basis to ensure that the scoring system can adapt to keep up with the company’s changing priorities. After making modifications to the framework, leaders can re-analyze current and upcoming projects to ensure that they are still in line with the enterprise goals. By “drinking its own champagne” and applying its own scoring and prioritization system for its own internal business, Innotas has focused its resources on projects that fit its clearly defined objectives, while reducing time and money spent on initiatives that don’t align with company strategy. By following a similar approach, organizations of all kinds can create a more efficient workflow, reduce IT operational costs, and guarantee that their IT initiatives are always closely aligned with their goals.