Proposal Justification |
Percentage of proposals reviewed that included the required financial justification.
Main Description
### Overview This metric is particular to project and product work pipelines and is about re-enforcing that proper business justification needs to be presented and considered as part of the organization’s portfolio investments decisions. A frequent but not necessarily best practice approach within organizations is to initiate projects or products that are perceived as critical -- for purposes of urgency or expediency -- without ensuring that the requirements of the portfolio review and investment process will be met. The unfortunate reality is that this frequently represents back-door entry to fund executive pet projects and bypass the need to develop and present the justification to other members of the executive team. Aside from closing the back door to the firm’s funding process, this metric emphasizes that providing proper business justification is a pivotal step to optimizing the use of funds to maximize the overall portfolio value. ### Measurement method Total number of proposals compared to total number of business justifications. ### Measurement analysis Depending on the technology in place to manage the portfolio investment process, some of this monitoring can be achieved in a semiautomatic manner through data extracts and trending, or it can be done manually through project peer reviews or project phase gate review audits. ### Examples A count of proposals with proper justification divided by the total amount of proposals: Example: 65% of proposals approved included the required business justification A dollar-value (or local currency) variant of that measure and expressed as a percentage of total investments in the project or product work pipeline: Example: 45% of total dollars invested in the strategic project work pipeline included the proper business justification
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