Observed in Practice: 5 Reasons to Prioritize Projects by Ranking Rather Than Multiple Criteria
Multiple criteria approaches for prioritization are based on problem disaggregation. The approach focuses on structured analysis by scaling and ranking disaggregated values (the criteria). Consensus is developed by stakeholders working through the various values associated with the project. It is the most popular method for prioritizing and building consensus related to capital project prioritization.
Ranking Approaches can take various forms based on the Theory of Choice. Preferential voting methods by ballots are utilized to complete a ranking. Plurality, Borda Count and Pairwise Comparison are the three ranking methodologies commonly used.
Multiple criteria approaches are often selected over ranking approaches because multiple criteria approaches are numeric and appear to be more scientific.
Mature organizations often see it differently. There are five reasons that many mature organizations prefer ranking methods over multiple criteria methods.
5. Scores (points, values) generated in multiple criteria approaches do not correlate to dollars.
4. Multiple criteria approaches require a lot of preparation time.
3. It is difficult to decide who to include (or who to leave out) and how to weight their opinions with multiple criteria approaches.
2. Multiple criteria approaches require a lot of time – much, much more than ranking approaches.
1. Regardless of the scores, we will do the projects preferred by the executive team, anyway.
Ranking approaches and multiple criteria approaches typically arrive at a similar result with respect to a prioritized list. Our typical recommendations are:
Start with the more straightforward and time-efficient ranking approaches
Migrate to a hybrid approach using both ranking and multiple-criteria approaches
Evaluate the tradeoffs of each method through several years of prioritization
Settle on one approach (most mature organizations will choose ranking approaches) as the norm
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