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Figure 2-2 Project funding model.

Figure 2-2 Project funding model.

The company's available funds budgeted for new product development, in this case $20,000,000, are then allocated to each strategic objective based on its priority and the estimated costs of projects in that area. Below candidate new product projects are listed with their estimated costs, 1-3.

Each project is now compared to each objective to see which projects support which objectives, using percent as an indicator. Based on a scale of 10, each project is aligned with objectives it supports in proportion to their relative importance. In project 1, it supports objectives 01 and 03. But it supports objective 01 more than it does objectives 03, so 01 gets a .6 and 02 gets a .4. To develop the project score, this figure is multiplied by the priority ranking of the objective it supports, producing its composite score. Project 1 was multiplied .6 by .1 for .06 and .4 by .2 for .08, for a total score of .140, which shows on the right column as the score for project 1.

If the objective is to fully fund each project, you can see that these three projects are fully funded, drawing from each strategic objective fund as appropriate.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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