1.4.2 Setting Priorities

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After the needs have been identified and ideas for their coverage have been addressed, priorities have to be set.

Many organizations generate multiple proposals for various new projects; however budgetary and other constraints allow only a fraction of those efforts to occur. E.g. A municipality, may have identified needs for improvement in several different sectors such as health care, education, public transport, sanitation infrastructure etc. Usually, not all these needs can be satisfied simultaneously mainly due to shortage of resources. Not all proposed projects will have the same degree of urgency; so priorities have to be set.

Before a great deal of effort is expended on prioritizing and selecting the candidate projects, it may be useful to screen competing proposals by asking some important questions, such as:

Does the project support the organizations mission?
Does the proposed project align with the organizations strategic plan/ technical architecture?
Is there an available funding source for this effort?
Does the projects cost/ benefit analysis justify its initiation?

Unless a project is legislative (or otherwise) mandated, simply working through these questions will result in elimination of some proposals from further consideration. 

Rating and prioritizing candidate Projects is generally performed by the executive management of the organizations. The process is formal and can take place in an as-needed basis, or can be integral part of the organizational strategic/ tactical planning and budgeting process.

The prioritisation of candidate projects and the selection of one or more to be implemented could be revealed a difficult task especially in case of large complex projects. In this case, expert judgement (consultants, professional and technical associations) should be asked.

Normally, projects that:

contribute to the quality of life of the region or the whole countrys residents,
have critical impact to the operation of the organization/ market sector or the whole public administration of the country
their direct and indirect costs are traded off by the benefits of their implementation
fit with the mission and vision of an organization/ a market sector or the whole public administration of a country  
contribute to the countrys economy
contribute to the protection of environment and promote the sustainable development
are rational continuation of projects already implemented and that integrate their results and outcomes
are of low risk
promote or take advantage of the technological evolutions
make the best use of ICTs (Information-Communication Technologies) in order to improve  industrial competitiveness and address key societal challenges
enhance the knowledge and skills of the public servants
aim at the improvement of public services
improve the economic/ financial situation of an organization/ market sector 
may be eligible for financing by EU Funds or other International Organizations

are of first priority since the anticipated benefits from their implementation are overlapping the required whole life cost. 

 

One of the most common priority setting aids is the Decision Matrix. The purpose is to compare several projects (needs) against to certain criteria. Therefore, a grid with as many rows as the alternative projects and as many columns as the criteria must be drawn. Each project must be rated against each criterion, using a three (1=criterion not met, 2=criterion met, 3=criterion met very well) or five level scale (1=criterion not met, 2=criterion met poorly, 3=criterion met, 4=criterion met well, 5=criterion met exceptionally). Sometimes you will have criteria of different importance. One approach would be to weigh the criteria. For example, if there are three criteria, two of which are of equal weight but the third one is of twice importance, the weighting could be 25%, 25%, 50% respectively. In this case the above mentioned rating schemes could be applied and then each rating could be multiplied by the weight of the criterion.

 

Tool 1-3: Decision Matrix

Criteria

Projects

(1)

Mandatory requirement

(2)

Mission/ Vision/ Goals

(3)

Meeting community needs

(4)

Cost/ Benefit

(5)

Risk

(6)

Project capacity

(7)*

Project Lifetime

(8)

Funding capacity

(9)

National & EU policies

(10)

Transfer of know-how & expertise

(11)

Other

 

Total Rate

Project 1

 

 

 

 

 

 

 

 

 

 

 

 

Project 2

 

 

 

 

 

 

 

 

 

 

 

 

Project 3

 

 

 

 

 

 

 

 

 

 

 

 

……..

 

 

 

 

 

 

 

 

 

 

 

 

……..

 

 

 

 

 

 

 

 

 

 

 

 

Project v

 

 

 

 

 

 

 

 

 

 

 

 

* This criterion should be used only when comparing similar projects

 

 

The rating of the projects is performed by an individual evaluation of each project against each criterion. For each criterion a number of questions are being asked and marks are assigned to the answers given. The mean of these marks is the rate for each criterion. An indicative questionnaire for the prioritization of alternative projects is being presented below:

 

Tool 1-4: Questionnaire for rating projects in order to prioritise them

Name of Project:

 

 

Rates4 [ In case that a five level scale is selected the cells should be adapted accordingly. ]



Criteria5 [ Criteria can be added or removed according to the nature of the examined projects. ]

1

2

3

Comments

1

Mandatory requirement

 

 

 

 


Is the deliverable of the project specifically required by national or European law or regulation?

 

 

 

 

2

Mission/ vision/goals.

 

 

 

 

 

To what extent does the project fit the mission of ….. (e.g. Public Procuerment Directorate)?

 

 

 

 

 

To what extent does the project fit the vission of ….. (e.g. Public Procuerment Directorate)?

 

 

 

 

 

Does the project fit with current goals?

 

 

 

 

 

Does the project fit with emerging needs?

 

 

 

 

3

Meeting community needs

 

 

 

 

 

To what extent does the project address specific, identified local needs?

 

 

 

 

 

To what extent does the project contribute to the countrys economy?

 

 

 

 

 

To what extent does the project contribute to the residents welfare? (municipality residents, country residents)

 

 

 

 

4

Cost/Benefit

 

 

 

 


Has a high level cost benefit analysis been performed?

 

 

 

 


Is the calculated BC ratio greater than 1?

 

 

 

 

5

Risk

 

 

 

 


Does the projects impact depend on another project not yet completed?

 

 

 

 


Does the project involve risks with high probability and high impact?

 

 

 

 


To what extent are the preventive actions feasible and easy to be applied?

 

 

 

 

6

Project Capacity

 

 

 

 

 

To what extent is the need for the project documented?

 

 

 

 

 

To what extent has the project effectiveness been documented?

 

 

 

 

 

To what extent is there an appropriate technology to support this project?

 

 

 

 

7

Project Lifetime

 

 

 

 

 

To what extent is there a positive future and long range outlook for this project?

 

 

 

 

8

Funding capacity

 

 

 

 

 

Is there a possibility of being funded by EU or other donors?

 

 

 

 

9

National & EU Policies6 [ This criterion refers to the contribution of the project to National policies and priorities. ]

 

 

 

 

 

To what extent are issues like …….. (eg, public policy, education, use of new technologies, environmental protection issues etc) included in this project?

 

 

 

 

10

Transfer of know-how and expertise

 

 

 

 

 

To what extent does the implementation of the project involve transfer of know-how and expertise from other regions or countries?

 

 

 

 

11

Other

 

 

 

 

 

(it must be completed with other criteria suitable with the nature of the project)

 

 

 

 

Completed example for rating and prioritising projects with the use of the above Questionnaire and the Decision Matrix is presented in Annex 1-1.

When using such methods, it is of utmost importance to distinguish between divisible (it is possible to implement only part of the project) and non-divisible projects (the project can be implemented only in full scale or not at all). Divisible project may have different relation between costs and benefits in different implementation scales.

In case of the projects that have been ranked in low positions and so never mature to become reality for various reasons, (e.g. the political priorities shift to other topics, insufficient funds, technical difficulties, and others), it is important to keep the full documentation, as any project idea can serve as an important tool/practical example/”lessons learnt” for other projects in the future.


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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