Project Ranking is used in project portfolio management (PPM) for selection of the most valuable, worthy and impactful projects which an organization needs to get focused on (the foremost projects to be completed through concentrating business resources at them). Project Ranking method is used when a company has a portfolio of concurrent projects which compete between each other for the available business resources: hence a company needs a wise direction on allotting these resources to prevent their waste at some low-gain projects or tasks. The ranking of the projects in a portfolio is usually performed via determining and comparing their ROI (Return on Investments) rates.
There are the following techniques to rank the projects:
- Benefit measurement (in the most cases one of the three following methods is chosen):
- Cost-benefit analysis (cost-revenue comparison);
- Weighted scoring models;
- Cashflow analysis: payback time, Internal Rate of Return (IRR), Net Present Value (NPV);
- Constrainted Optimization: a complex method used for ranking large projects;