![]() ![]() Consequently, there is no perfect model that covers the right criteria to be used for any type of organization when prioritizing and selecting its projects. These objectives must be aligned with the business scenario which in turn may be different for each organization. PMI’s Standard for Portfolio Management (PMI, 2008) says that the scope of a project portfolio must stem from the strategic objectives of the organization. Thus it is necessary to employ a multi-criteria analysis (TRIANTAPHYLLOU, 2002) which allows for decisions while taking into consideration the different dimensions and organizational needs altogether. That is the reason why a unique criterion or translation is not viable enough to determine which project(s) should or should not be executed. When analyzing the above table, one can observe that the different dimensions demonstrate how complex it is to come up with an exact translation for the meaning of low cost and high benefits. Since organizations belong to a complex and varying context, oftentimes even chaotic, the challenge of the aforementioned definition resides exactly in determining what are costs and benefits to any given organization. It’s important to observe that a benefit-cost relationship does not necessarily mean the use of exclusive financial criteria like the widely known benefit-cost ratio, but instead a broader concept of the reaped benefits from executing the project and their related efforts. ![]() Projects with higher benefits, when compared to their costs, will have a higher priority. When we consider the ever-changing dynamics of the current environment as we have never seen before, making the right choices based on adequate and aligned objectives constitutes a critical factor, even for organizational survival.īasically, the prioritization of projects in a portfolio is nothing more than an ordering scheme based on a benefit-cost relationship of each project. Given any specific situation, making the right decisions is probably one of the most difficult challenges for science and technology (TRIANTAPHYLLOU, 2002). One of the main challenges that organizations face today resides in their ability to choose the most correct and consistent alternatives in such a way that strategic alignment is maintained. The importance of project selection and prioritization This paper also discusses the importance and some possible criteria for prioritizing projects, and by using a fictitious project prioritization example, it demonstrates AHP in a step-by-step manner, where the resulting priorities are shown and the possible inconsistencies are determined. However, decision-making is, in its totality, a cognitive and mental process derived from the most possible adequate selection based on tangible and intangible criteria (SAATY, 2009), which are arbitrarily chosen by those who make the decisions. ![]() When looking into how organizations decide over which projects to execute, we can notice a constant desire to have a clear, objective, and mathematical criteria (HAAS & MEIXNER, 2005). AHP is one of the main mathematical models currently available to support the decision theory. The objective of this paper is to present, discuss and apply the principles and techniques of the Analytic Hierarchy Process (AHP) in the prioritization and selection of projects in a portfolio. ![]()
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