Business value as the measure of all things.
The „Business Value“ assessment focuses on the most essential criteria for deciding on project proposals. Project proposals include, for example, ideas for new business, product optimisation or care & maintenance – all ideas are evaluated according to their importance for the business using the same criteria.
This method provides a simple but comprehensive evaluation procedure to keep track of all projects in a transparent way – sorted by the phases in the funnel.
The better beats the good.
This also means that newer, better project proposals can “overtake” existing ones simply because they are more valuable to the business: “The better beats the good“.
To do this, one must be prepared to remove proposals that have been downgraded in this way from the portfolio funnel if they have little chance of advancing.
Such go/no-go decisions are often difficult for companies, but are very important for optimising business value by focusing on the best projects.
Everything is relative.
All assessments are not absolute (danger of false accuracy), but relative to each other.
The criteria can be adapted and expanded – fewer criteria are better than too many and they should be disjunctive. It is important to agree on a common, binding and stable catalogue of criteria within the company.
Additional weightings can also be used to assign points, depending on their importance for the business model.
In the end, people make the decision – the numerical values of the assessment are only a tool for the decision-makers. As long as it can be plausibly explained, a “manual override” can also trump the calculated scoring. However, if this happens frequently, one should consider whether one has the right criteria.