1.6 Project Selection

Now that we have a greater perspective of projects within the organization, let us consider the process of selecting projects and the various selection methods.

Project selection is the process of evaluating and prioritizing projects that best fit the organization’s objectives. The following conditions are considered in project selection:

1. Is the project required?

2. Does the project qualify as a project?

3. Is this a standalone project or part of another project or program?

4. Does this project have the support of management and end users?

5. Is the project economically feasible?

6. Does the organization have sufficient capacity to complete the project?

Is the Project Required?

While it may seem obvious that an organization would never choose a project that is not needed, it does happen more often than one might think. One well-documented example of this is the 1989 Denver Airport baggage handling system installation that at one time was billed as the most advanced system in the world. In this infamous case study, the decision by the City of Denver to create and install a state-of-the-art baggage handling system (the required technology for which did not exist at the time) caused a two-year delay in the airport’s grand opening and cost overruns of approximately $560 million. At one point, delays cost the City of Denver $1.1 million per day. After soldiering on for 10 years, the City of Denver abandoned the system in 2005 because the $1 million per month maintenance cost exceeded the cost of a manual tug and trolley system. In the end, the airport did not need the high-tech baggage handling project.1

One common example of an unnecessary project is improvement projects that involve expensive enterprise (ERP) software systems aimed at reducing redundancy, waste, inefficiencies, disparate communication issues, mistakes, and rework. While many of these projects are successful, some never realize their intended outcome and are abandoned in favor of legacy systems that often include manual processes that are not elegantly integrated into the organization or accessible by all. For example, desktop versions of the Microsoft Office and access to a shared drive may be enough, and an expensive ERP system may not be needed.

Does the Project Qualify as a Project?

As discussed earlier in the definition of a project, some projects may be tasks that can be assigned to a single individual to complete and do not require project management resources. Evaluate the projects to decide if some projects are obsolete and can therefore be eliminated and if some projects are programs that are best served by being split into several separate, but interrelated, projects and subprojects.

Is This a Standalone Project or Part of Another Project or Program?

Upon review by the Project Management Office (PMO) or senior management (in smaller organizations), it may be determined that the project is best served by being part of another project or included in an existing program.

Does This Project Have the Support of Management and End Users?

In the case of the Denver Airport baggage handling system, the airlines assumed that they would be taking care of their own baggage handling, as they did for all other airports. As end users of the system, they were not consulted in the decision to install a state-of-the-art baggage system. Had they been consulted at the outset, perhaps the failed project could have been avoided.

As detailed earlier regarding ERP systems, because there are so many end-user stakeholders, each with different needs, it is sometimes deemed not feasible to include end user stakeholders in the up-front evaluation and planning of a project. The cost of not actively including end users in major ERP rollouts, or any change-causing initiative, is institutional resistance. End users can be internal or external. If the end users do not support the project and its change, then they will resist its outputs and outcomes, and such initiatives will likely be usurped, causing the project to fail.

Similarly, senior management and project sponsors also need to support the project for it to succeed. In Topic 2, you will learn that the main reason for project failure is lack of support from senior management or a project sponsor. Management and end users are bookends to all projects; both need to be active participants in and supporters of relevant projects. If these bookends are not solid in their visible support, investment in the project and project success are at risk.

Is the Project Economically Feasible?

Economic feasibility is an analysis of a project’s cost and revenues used to determine whether the project is logical and possible to complete.2 To determine this, a Business Case for the project concept is developed. The Business Case will be introduced in the Initiating phase in Topic 6. In the end, it was determined that the Denver Airport baggage system was not feasible; its cost outweighed the benefits that were achieved by a less expensive solution (tug and trolley system). To determine economic feasibility, quantitative analysis is performed. Such methods are explored in the next section.

Does the Organization Have Sufficient Capacity to Complete the Project?

Consider these four factors of project capacity:

1. Is senior management committed, and does it have the resolve to prioritize and complete this project? Is this support clearly communicated to the organization?

2. Are end users in support of the project?

3. Does the company have the capital to fund this project to its completion and support it beyond completion to achieve its strategic outcome?

4. Does the organization have the human and technological resources available to complete the project?