Prioritising Projects or Work Packages

When deciding which projects or work packages to prioritise, it is essential to evaluate the expected benefit each initiative delivers relative to the cost or effort required. To ensure meaningful comparisons, initiatives should be of a similar scale—compare tasks with tasks, work packages with work packages, or projects with projects. Large initiatives should be broken down into smaller, comparable deliverables before prioritisation.

Method for Prioritisation

1. Define the Objective and Time Frame
   Clearly state the goal you want to achieve (e.g., reduce heat loss by a certain percentage) and the relevant time horizon. Decide whether the cost of delaying the initiative (lost value over time) is significant for your context.
2. Estimate Benefits and Costs
   Quantify the expected benefit of each initiative using consistent units (e.g., percentage reduction in heat loss, monetary value, or other relevant metrics). Estimate the cost or effort required, such as euros, person-days, or resource usage.
3. Calculate a Priority Score
   • If time is not explicitly considered, calculate a simple benefit-to-cost ratio:$$\text{Priority Score}=\frac{\text{Estimated Benefit}}{\text{Estimated Cost}}$$​A higher score indicates a better return on investment and thus higher priority.
   • If the timing of benefits matters (i.e., delaying the project causes lost value), use the Cost of Delay (CoD) concept:$$\text{Cost of Delay (CoD)}=\text{Value lost per unit time of delay}$$Then calculate the Weighted Shortest Job First (WSJF) score:$$\text{WSJF}=\frac{\text{Cost of Delay}}{\text{Duration of the initiative}}$$WSJF=Duration of the initiativeCost of Delay​Prioritise initiatives with the highest WSJF scores.
4. Sort and Prioritise
   Rank initiatives from highest to lowest based on the chosen priority score. Consider additional factors such as dependencies between initiatives, resource availability, risk, and whether initiatives can be executed in parallel.

Example

Suppose you have three initiatives aimed at reducing heat loss in your home, with the following estimated benefits and costs:

Initiative	Benefit (Heat Loss Reduction %)	Cost (€)	Priority Score (Benefit/Cost)
A: Replace windows	30	10,000	0.0030
B: Insulate attic	30	2,000	0.0150
C: Upgrade heating	10	15,000	0.00067

Sorting by benefit per euro spent, the order is: B (Insulate attic), A (Replace windows), C (Upgrade heating).

This indicates insulating the attic provides the greatest heat loss reduction per euro invested. If the timing of benefits is critical (for example, if immediate heat loss reduction is more valuable as winter is coming), estimate the value lost per month of delay for each initiative and divide by the expected duration to calculate WSJF scores for prioritisation.

Important Considerations

• Consistency in Benefit Measurement: Ensure benefits are measured consistently across initiatives. Decide whether to use absolute or relative changes and over what time period. Converting benefits into monetary terms can improve comparability when benefits differ in nature.
• Resource Constraints and Dependencies: High priority scores do not guarantee feasibility. Consider resource availability, dependencies between initiatives, and risks before finalising the prioritisation.
• Iterative Review: Priorities should be revisited regularly as new information becomes available or circumstances change.