Contemporary methods for evaluating complex project proposals

Abstract

The ability to evaluate project proposals, assessing future success, and organizational value is critical to overall business performance for most enterprises. Yet, predicting project success is difficult and often unreliable. A four-year field study shows that the effectiveness of available methods for evaluating and selecting large, complex project depends on the specific project type, organizational culture, and managerial skills. This paper examines the strength and limitations of various evaluation methods. It also shows that, especially in complex project situations, the decision-making process has to go beyond the application of just analytical methods, but has to incorporate both quantitative and qualitative measures into a combined rational judgmental evaluation process. Equally important, the evaluation process must be effectively linked among functional support groups and with senior management in order to strategically align the project proposal and to unify the evaluation team and stakeholder community behind the mission objectives. All of this requires leadership and managerial skills in planning, organizing, and communicating. The paper suggests specific leadership actions, organizational conditions, and managerial processes for evaluating complex project proposals toward future value and success.Keywords: Project evaluation and selection; Project management; Team leadership; Technology; Decision making; Rational; Judgmental Challenges of determining potential for future successPredicting project success has never been easy. The long list of prominent project failures, ranging from product developments to government social programs, from computers to pharmaceutical, and from public transit to supersonic transport, reminds us of this reality (Cicmil et al. 2006;Gulla 2012;Lemon et al. 2002;Standish Group 2013). Many projects do not live up to their expectations or outright fail even before their technical completion in spite of careful feasibility analysis during their proposal or selection stages (El Emam and Koru 2008;Shore 2008). Obviously, the ability to evaluate project proposals and assess future success and organizational value is critical to overall business performance. In fact, few decisions have more impact on enterprise performance than the resource allocations for new projects (Shenhar et al. 2007). Virtually, every organization evaluates, selects, and implements projects. Whether these projects are product developments, organizational improvements, R&D undertakings or bid proposals, pursuing the 'wrong' project not only wastes company resources, but also causes the enterprise to (1) miss critical alternatives, (2) perform less agile in the market place, and (3) miss opportunities for leveraging core competencies. Yet, in spite of pressures to avoid these high-cost errors, predicting project success is difficult, and existing models are often unreliable. Especially in today's complex and changing business environment (see 'Today's Complex Project Environments' section), the pro...

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