Prioritizing a Project Portfolio: A Field Checklist You Can Use This Week
Portfolio prioritization is the process of allocating limited resources -- budget, people, and management attention -- across a set of candidate and active projects to maximise the overall value delivered by the portfolio. It is different from project management (managing the delivery of individual projects) and from programme management (coordinating related projects). Portfolio prioritization asks: given everything we could do, what should we actually be doing, and in what order?
In 2022, most public-sector and capital-project organisations have more project proposals than they have capacity to execute. Effective portfolio prioritization is the mechanism for making rational choices about where to allocate that capacity. Here is a field checklist for conducting or improving your portfolio prioritization process.
Checklist: Scoring Each Project
Strategic alignment score. Rate each project on a 1-5 scale for how directly it advances the organisation's stated strategic priorities. Projects that cannot be linked to a strategic priority should be questioned before they enter the portfolio.
Value delivery score. Estimate the value the project is expected to deliver. For capital projects this is typically the net present value or benefit-cost ratio of the investment. For service improvement projects it may be a cost-saving estimate or a service-level improvement metric.
Urgency and time-sensitivity score. Rate each project on a 1-5 scale for the urgency of starting or completing it. A regulatory deadline or a contract commitment creates urgency; a discretionary improvement project does not. Time-sensitivity should be evidence-based, not based on stakeholder advocacy.
Resource requirement and feasibility score. Estimate the resources required to execute the project against available capacity. Projects that require skills or equipment that are not available should be rated lower until the constraint is addressed.
Risk score. Rate each project on a 1-5 scale for the consequences of project failure or delay. High-risk projects require more management attention and may need to be sequenced after lower-risk projects to protect organisational capacity.
Checklist: Managing the Portfolio
Establish a total portfolio capacity limit. Sum the resource requirements of all active projects and compare against the organisation's actual capacity. A portfolio that exceeds organisational capacity by 30 percent or more is not a portfolio -- it is a backlog of commitments that will all be delayed.
Review the portfolio at a fixed cadence -- monthly for active project status, quarterly for full portfolio re-prioritization. The portfolio review should have the authority to pause, cancel, or re-sequence projects, not just monitor them.
Track projects that have been paused or cancelled, not just active projects. A cancelled project represents a decision that should be documented and revisited if circumstances change. A paused project represents a deferred commitment that is consuming no resources but still consuming political capital.
Apply a mandatory re-evaluation trigger for projects that exceed a budget or schedule threshold. A project that is 20 percent over budget should not proceed automatically -- it should return to the portfolio review for a go/no-go decision at the revised expected cost.
XNM provides portfolio management advisory services to public-sector and capital-project clients, including portfolio design, governance, and prioritization. Reach out to XNM's program & project delivery advisory team to discuss portfolio prioritization and governance for your organisation.