Establishing an expected value

Most projects do not require rigorous financial justifications such as Return On Investment (ROI) or Net Present Value (NPV) analysis. However, a qualitative review of each project can give you an idea of the overall project value and risk.

The Expected Value step in the

project lifecycle utilizes a questionnaire to estimate the risk-adjusted value of a given Project relative to other Projects in your organization. This relative value is called the expected value of the Project. The values are used to create the Project Portfolio Value Analysis Chart in the Analysis component of (see Results-of-the-analysis).

The consistency of the questionnaire ensures that the calculations are applied uniformly to the Projects in the portfolio and can, therefore, serve as a consistent basis for relative evaluation.

Each question in the questionnaire is given a weight. Also each answer within a question is given a weight. These weightings are determined at the time of configuration of the software for your organization. A weighted score is derived each for business value and probability of success. These values are used to plot this project in the Expected Value Chart. These scores are multiplied together to determine an overall Expected Value score.

To establish the expected value of a Project, the software asks questions that fall into two categories, Business Value and Probability of Success. Probability of success includes risks for a project. Your system administrator can configure these questions and the categories according to the particular criteria that your business uses to evaluate project value and risk.

To calculate the Project's Business Value and Probability of Success Scores

1. On the Project Details window, click the Expected Value step below the Definition phase.
    The Expected Value section appears and displays answers to questions about the criteria used to evaluate business impact and success probability. The questionnaire is displayed here only after you have answered the survey questions once by using the Edit button. 

   Warning

   Note

   If an administrator modifies the questionnaire after the questions have been answered and saved, a message on this screen advises you that an older version of the questionnaire was used. Any inactive questions are marked with an asterisk (*). To answer the questions in the current version of the questionnaire, edit the questionnaire as described in the next step.

2. To answer the questions displayed in the questionnaire, on the Expected Value title bar, click Edit.
    The Expected Value for Project window displays the current version of the questionnaire, for example:
   
   
   
3. For each question, select the option button beside the answer that best reflects your evaluation of the Project.
    The software uses your answers to calculate Business Value and Probability of Success scores for this Project. These Project scores are then used to conduct the value analysis on the portfolio.
4. Click Save.