Tips on Step 3 - Evaluate Options (Evaluation)
The purpose of the Identification Step 2 was to uncover
all of the potential work that should be considered for the portfolio in the coming
year and beyond. In many cases, this may have been the result of brainstorming
exercises. In any case, this step should have cast as wide a net as possible to
include all of the work that could possibly be in this year's portfolio.
Now let's assume that all of the potential work for the coming year has been identified. No doubt you already know that it is more than you can handle and that some, perhaps much, of the proposed work will not be authorized. So now you need to start the process of scaling back so that you can bring forward only those components that are of the most importance and value. In later steps, you will be prioritizing work from most important to least important. However, at this point you may have nothing more than a name and brief description and you may or may not have cost information perhaps based on historical numbers.
Remember that one of the purposes of portfolio management is to make sure that, after mandatory work, only work with the highest value and best alignment will be authorized. While you may have some sense of the value of some of the work, you need solid information to go on if you are to compare the merits of the various work initiatives, establish linkages and priorities, and plan out the work for the year.
So this step becomes a matter of cutting work before prioritizing the remainder. For this you need to ensure that, at a minimum, you have a Value Proposition. Any item that does not have a Value Proposition, or better, should be cut now - unceremoniously!
The merit of calling for a Value Proposition is that it is a relatively simple document involving minimal effort to create and at least provides for the allocation of sufficient resources to create a proper Business Case or beyond. In other words, you have inserted a Value Proposition stage into the project life span. This may be very appropriate for potentially medium to large projects.