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Strategic Resource Allocation - There's an App for That!

By Dan Jodarski

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Psychology journalist Malcom Gladwell may have put it best in his book, Blink: “There can be as much value in the blink of an eye as in months of rational analysis.”

Every organization at some point has too many projects and not enough time, people, or budget to do them all well, so it makes sense to employ some form of Project Portfolio Optimization (PPO). But you have to be careful not to use your valuable and limited resources too extensively on project selection efforts, or you may wind up with a lot of strategy and not many results. To attack this problem head on, I recommend a simple but defensible approach to portfolio management. Back of the envelope calculations likely won’t cut it, but a spreadsheet and basic algebra could have you covered. The same logic used in those calculations can be encoded in a simple app.

Big Sky's project allocation app prototype takes four simple inputs for each project:

project allocatoR input

Amount- The cost of the project in dollars. This could be documented in a formal proposal or estimated based on similar past projects.

ROI- The estimated return on investment as a percentage. Again, this may be a robust statistical estimate or the project value could be a guess based on the understanding of subject matter experts. Learn more about calculating ROI for process improvement projects here.

Criticality- The degree to which the project is critical to the organization’s mission, on a 1-10 scale

Mandated- A checkbox indicating if the project is mandatory.  This may be based on policy compliance requirements, or your assessment of if your boss considers a particular project a "must-do".

Given the inputs, the app produces a suggested strategic resource allocation in percentage of effort that is recommended to be applied to each project under consideration. Some projects may receive a zero if the algorithm determines they are not worth pursuing.

project allocatoR report

Click the link below to give the prototype a try and let us know what you think! At the very least, you'll get a sense of how simple resource allocation and project selection can really be.

Try the App!