How to Prioritize Projects Using Bubble Chart Pro
You can also see the video "Project Ranking Using Bubble Chart Pro PLUS" by clicking here.
Project prioritization is a critical step in selecting which projects to start, continue, or stop. A value-maximizing and clearly understandable project ranking system is an essential part of a Project Portfolio Management system. It should be based in sound, quantitative, and modern decision-science.
Bubble Chart Pro PLUS and Bubble Chart Pro OPTIMAL include a SMART (Simple Multi-Attribute Ranking Technique) project prioritization system that was developed by researchers from MIT, Harvard, and the University of Southern California. This system allows you prioritize your projects in a way that integrates your key project data into a single value score that is clear, understandable and rigorously defensible.
All you have to do is decide what project criteria or attributes are most important to your business and then weight each one by assigning values of relative importance to them. Here’s how easy that is to do in Bubble Chart Pro:
1) In an un-prioritized portfolio, notice that all the project scores in the “Value Scores” column are “0:”
2) We’ll start by clicking on the top of a selected column to open the Attribute Form. In the example below, we have selected the attribute “Profit”. We are going to choose “Profit” as our most important attribute, so we’ll assign it a weight of “1000” and we're going to move the slider to adjust the value (utility) curve to bias the attribute to higher profit projects. With this curve setting, the value score increases faster as profits get higher.
3) After we save it, notice how the value score immediately appears in the “Value Score” column. Because we have only assigned a weight to a single attribute, the value score rank order of the projects is identical to the ranking the projects by "Profits":
4) Next, we’ll click on the top of column “Cost” to open its Attribute Form. We are going assign “Cost” a weight of 800, meaning that “Cost” has 80% of the influence in the value score as “Profit” in our model. We’re also going to check the “Lower Values are Better” check box because lower cost projects are better that higher cost projects. Next, we'll assign a weight of 400 to "Resources" and check the “Lower Values are Better” checkbox becuase lower resource requirements are better than higher requirements. We'll keep the straight-line curve for these attributes.
5) Notice how the Value Scores have automatically recalculated based on the addition of the weighted attributes “Cost” and "Resources" and how they are no longer ranked just by profit. Now the value scores reflect the weighted contribution of all three attributes:
6) We’ll continue on making the following assignments as shown in the forms below indicating that “Probability of Success” will have 75% of the influence in the value score as “Profit,” and “Strategic Value” will have 50% of the influence in the value score as “Profit”:
7) And we’re done! Now we can see the Value Score for each project and we can sort them by value score by clicking at the top of the Value Score column to see them in prioritized order.Now the value scores reflect the weighted contribution of all five attributes:
8) By clicking on the [Calc.] button in the button-bar at the top of the form (above), we can see the contribution that each attribute makes to the total value score . These numbers are called the “normalized weighted values,” and each project’s value score represents the sum of these individual values. Projects with 0's are the projects with the least attractive values for that attribute (such as highest cost or lowest profit). Clicking the [Actual] button returns to the attribute data view.
9) It is often easier to see this kind of data in charts, and Bubble Chart Pro has them built-in so you can make them in a couple of clicks. The stacked bar chart below displays the contribution of each normalized weighted attribute to the total value score, and the length of the bar reflects the total value score:
10) The percent normalized stacked bar chart below displays the percent contribution of each normalized weighted attribute to the total value score, and the length of the bar reflects 100% of the total value score for each attribute:
11) The attribute data stacked bar chart below displays the raw data of each attribute:
Now you can use these “Value Scores” in your bubble charts! In the chart below, we can see that the most attractive projects are the largest bubbles in the upper right quadrant (higher value score, lower cost, higher profit) while the least attractive projects are in the lower right quadrant (lower value score, higher cost, lower profit):
10) So you can see that the SMART prioritizer in Bubble Chart Pro is a fast and powerful way to prioritize your projects and visualize the results. We recommend starting with a small group of projects to try different weighting combinations so you can develop a set that prioritizes the small group close to the way you would do it manually. Then you can have confidence in the ranking when you add more projects.