Project Prioritization using Weighted Scoring

Question

In building a simple spreadsheet to help prioritize, I am trying to use weighted scoring for Value, Effort, and Cost. Each initiative has a value between 1-5 for each measure, with 1 being the least and 5 being the highest.

The weighting for Value should affect the score positively, while the weighting for Effort and Cost should affect the score negatively.

Inititiave 1: Value = 2, Cost = 4, Effort = 5, Priority = ?
Inititiave 2: Value = 3, Cost = 2, Effort = 1, Priority = ?
Inititiave 3: Value = 2, Cost = 2, Effort = 3, Priority = ?

Any thoughts on how best to approach the positive and inverse negative scoring?

Answer 1

Add up both the favorable criteria values and the unfavorable criteria values separately and then divide the favorable sum by the unfavorable sum. Then sort.

For example:

Fav criterion 1 = 7 Fav criterion 2 = 6 Fav criterion 3 = 2

Total fav = 15

Unfav criterion 1 = 8 Unfav criterion 2 = 3 Unfav criterion 3 = 7

Total unfav = 18

15/18 = 0.83

Do this for each initiative and then sort.

You can also put a weight for each of the criteria so that you can get additional precision in your analysis.

Just to make sure I am clear: Favorable I mean beneficial to the project; unfavorable means costs and risks. You can keep it at that level--benefits, costs, and risks--or you can decompose and score lower level criteria. Decompose if you really need to get very precise. Otherwise, it's a lot of effort that does not necessarily change your priority schema.

Example:

Answer 2

In case you will work with more than 10 initiatives such approach won't work. It has not so much variables and values.

To build a good ranking system for your own situation: try to add more variables with wide range of values. As an example: number of affected users. So the final value for 5 users and 5 mln users could be dramatically different. Just make a small investigation of your domain field, competitors...which metrics are critical and valuable.

Also, adding an importance factor for each variable will take a significant role as a defining part of the ranking system.

And for

Any thoughts on how best to approach the positive and inverse negative scoring?

For example, you are prioritizing according to the final score number (bigger - more prioritized).

In that situation you need to add more value for valuable (positive) variables (5 is the higher value) and less value for "negatives" (1 is the highest cost).

Using such approach the max total score for the most valuable item with the highest cost will be 6.

For the the same valuable but with lowest cost score will be 10. So it will have higher priority.