Topic Definitions #
Methods for Evaluating Ideas in Project
Introduction to Idea Evaluation
Expert Evaluation
What is Expert Evaluation?
Expert evaluation involves analyzing how promising, realistic, or useful an idea or project is. They assess technical feasibility, economic viability, risks, and expected outcomes. Their assessments stem from experience, industry knowledge, and foresight of possible outcomes.Why are Expert Evaluations Important?
- Expert evaluations provide valuable insights when teams cannot quantify ideas. Experts fill data gaps and offer qualitative judgments. Although subjective, their assessments are often accurate because of experience and contextual understanding.
- Expert evaluations help teams with limited data or complex decisions. Experts’ insights accelerate decisions and guide teams toward successes or risks. Balancing expert evaluations with quantitative data ensures a comprehensive assessment.
Project Idea Evaluation Methods #
Now, let’s explore some popular evaluation methods that help achieve these goals.
Impact and Effort Evaluation #
Teams can analyze ideas based on two primary factors: impact and effort evaluation.
Voting #
A democratic decision-making process is the foundation of voting. Team members select and vote for the ideas they find most important and promising for implementation. This approach is especially useful when considering the perspectives of multiple stakeholders or experts.
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Pairwise Comparison
Participants compare ideas in pairs and choose between two alternatives. Repeated comparisons establish overall priorities.
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MaxDiff Analysis
Participants identify the most and least preferred ideas, forming a preference gradient that highlights high- and low-value concepts.
Applying these methods allows to evaluate and prioritize ideas objectively.
Impact Mapping #
Teams can use Impact Mapping to visualize how business goals connect to specific actions and outcomes, clarifying the factors that influence project success. This method enables them to focus on actual business needs, identify key actors and their actions, and predict how their behavior may shape project outcomes.
The image above shows the following steps to apply the Impact Mapping method:
“Who?” — Identify Key Actors:
“How?” — Analyze the Impact:
- The following step is to answer the question “How?” , — how can the behavior or actions of the actors influence the business goals? It’s important to identify both the positive and negative impacts of each action on goal achievement. The diagram shows how actors’ actions are linked to different levels of impact.
“What?” — Determine the Deliverables:
Expected Monetary Value (EMV) #
The Expected Monetary Value (EMV) method evaluates different execution scenarios by applying probabilities and monetary estimates. This approach helps teams assess the potential costs or benefits of implementing an idea while considering possible risks and their likelihood.
Formula for calculating Expected Monetary Value (EMV):
Where:
- P {\scriptscriptstyle 1} is the probability of each outcome occuring (from 0 to 1);
- V {\scriptscriptstyle 1} is the monetary value or benefit of each outcome.
To calculate EMV, teams multiply the probability of each outcome by its corresponding monetary value and sum the results. This formula helps estimate the expected financial impact of an idea, considering both potential benefits and associated risks.
Teams often represent the EMV method using a decision tree, which follows these steps:
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1. Define the Decision (Decision Node):
The first step is to define the decision that needs to be made. In the example shown, it’s “Should we build a new plant or renovate the existing one?”.
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2. Define Scenarios and Probabilities (Probability Node):
Next, for each decision option, possible scenarios are outlined. For example, a “strong demand” scenario (with a 60% probability) or a “weak demand” scenario (with a 40% probability). Each scenario has a likelihood associated with it.
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3. Calculate Costs for Each Scenario:
For each scenario, the potential cost or benefit is calculated. In the example, building a new plant would result in an $80M profit under strong demand or a $30M loss under weak demand.
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4. Calculate EMV (Expected Monetary Value):
Ideas with low impact and high effort. These tasks are not worth the investment and typically should not be pursued.
Where:
- P {\scriptscriptstyle 1} is the probability of each outcome occuring (from 0 to 1);
- V {\scriptscriptstyle 1} is the monetary value or benefit of each outcome.
In the example, the EMV for building a new plant is $36M, while for renovating the existing plant, it’s $46M.
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5. Choose the Best Option (End of Branch):
The final step is to choose the option with the highest EMV. In this case, renovating the plant is more favorable, as its EMV ($46M) is higher than that of building a new plant ($36M).
The EMV method, combined with decision trees, is a powerful tool for risk analysis and making optimal decisions under uncertainty.
Weighted Shortest Job First (WSJF) #
Teams prioritize tasks using the Weighted Shortest Job First (WSJF) method. This approach evaluates tasks based on business value, time criticality, and their potential to reduce risks or create opportunities. By comparing these values to the task size, teams establish a priority queue for execution.
WSJF formula:
Where:
- Business Value: How important the task is to the business or users.
- Time Criticality: How urgent it is to complete the task soon.
- Risk Reduction or Opportunity Enablement: How much the task helps reduce risks or opens new opportunities.
- Job Size: The estimated complexity or effort required to complete the task.
Where:
- B V – Business Value: How important the task is to the business or users.
- T C – Time Criticality: How urgent it is to complete the task soon.
- R or O – Risk Reduction or Opportunity Enablement: How much the task helps reduce risks or opens new opportunities.
- Job Size: The estimated complexity or effort required to complete the task.
Steps for Applying WSJF:
1. Define Task Metrics:
Evaluate each feature or task based on metrics such as business value, time criticality, and risk reduction or opportunity enablement. In the table provided, these values are scored from 1 (low) to 10 (high).
2. Assess the Task Size:
Evaluate the complexity or size of the task (Job Size) on a similar scale. A higher score means more effort or time is needed to complete the task.
3. Calculate the Priority:
For each task, calculate the priority by dividing the sum of business value, time criticality, and risk reduction by the task size.
For example, for “Feature A”:
WSJF = {10 + 1 + 1 \above{1pt} 1} = 10And for “Feature D”:
WSJF = {1 + 8 + 10 \above{1pt} 8} = 1,254. Rank Tasks by Priority:
Rank the tasks by their WSJF score: the higher the value, the higher the priority. In the example, Feature A gets the highest priority with a score of 10.
This method helps focus on tasks that deliver the highest value in the shortest possible time, with minimal effort.
RICE (Reach, Impact, Confidence, Effort) #
Teams use the RICE framework to prioritize features or tasks based on four key factors: Reach, Impact, Confidence, and Effort. This method ensures that the most valuable tasks receive priority while considering the cost of implementation.
RICE Formula:
Where:
- Reach:
How many people or segments will be impacted by this feature or task? This factor is usually represented as a number of users or affected entities over a defined period. - Impact:
How strongly will this feature or task affect the user or the business? This is usually rated on a scale from 1 (minimal impact) to 5 (massive impact). - Confidence:
How confident are we in the accuracy of the reach and impact estimates? This is expressed as a percentage. - Effort:
How many resources (measured in person-months, for example) are required to complete the task? A higher score indicates a larger effort.
The RICE score helps project managers focus on tasks that provide the most value with the least effort.
Steps to Apply the RICE Method Using the Example in the Image:
1. Define the Feature or Task:
List the features or projects that need to be prioritized. In the image, the list includes:
- Biometric Authentication
- Stripe Pay Integration
- Shopify Ecommerce Cart
- API Dashboard
2. Evaluate Each Feature Across the Four RICE Factors:
Reach:
- Estimate how many users or stakeholders the feature will affect. In the image, Biometric Authentication has a reach of 81 users, while API Dashboard affects 43 users.
Impact:
- Rate the impact on a scale from 1 to 5. In the example, Biometric Authentication has a maximum impact score of 5, while Stripe Pay Integration has a slightly lower impact score of 3.
Confidence:
- Provide a confidence percentage to show how sure you are about the accuracy of your reach and impact estimates. Biometric Authentication has 75% confidence, whereas Shopify Ecommerce Cart has 50%.
Effort:
- Rate the effort required to implement the feature on a scale of 1 to 5. A lower score indicates less effort. In the image, Biometric Authentication has a relatively low effort score of 2, while API Dashboard has a higher effort score of 3.
3. Calculate the RICE Score:
- Apply the formula for each feature:
- For example, for Biometric Authentication, the calculation would be:
- For Stripe Pay Integration:
4. Rank the Features by RICE Score:
- After calculating the RICE scores, rank the features from highest to lowest. In the image, Biometric Authentication ranks the highest with a RICE score of 152, indicating that it should be the top priority, followed by Stripe Pay Integration (35), Shopify Ecommerce Cart (29), and API Dashboard (14).
The RICE method allows you to focus on the most important functions, ensuring the most efficient use of resources. This method allows you to balance the impact of an idea and its implementation, taking into account resource costs.
MoSCoW (Must, Should, Could, Won’t) #
The MoSCoW method is a task prioritization approach that categorizes tasks into four groups based on their importance to the project:
Step 1: Simple Task Distribution Using MoSCoW
The image below illustrates a simple task distribution using the MoSCoW methodology, without the use of buffers. Each task is categorized as follows:
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Must Have:
These tasks occupy no more than 60% of the total effort, and they are essential for achieving the project goal.
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Should Have:
Tasks that should be completed but are not critical, typically occupying around 20% of the effort.
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Could Have:
Additional tasks that can be completed if there are resources available, taking up around 20% of the effort.
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Won’t Have:
Tasks that will not be included in this cycle.
This approach clearly allocates time and resources based on task importance, with no mention of buffers.
Step 2: Detailing the Approach with Buffers
The image below
provides a more complex workflow, showing how buffers are used during the Planning Phase and Execution Phase:
In this phase, 60% of the resources are allocated to “Must Have” tasks.
- External organizations or individuals who provide materials, equipment, or services for the project.
In the execution phase, “Must Have” tasks remain the top priority, and the project cannot be completed without them.
The remaining tasks can be completed if time and resources allow, utilizing the buffer.
This flowchart demonstrates the importance of having a buffer to manage unexpected delays or additional tasks.
Step 3: Example of Feature Allocation Using MoSCoW
The image below presents a matrix where project features are distributed according to the MoSCoW categories.
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Must Have:
Mobile app integration and API for third-party integrations are critical tasks that must be completed.
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Should Have:
User profile customization is important but not critical to project success.
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Could Have:
Multi-language support can be added if resources are available.
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Won’t Have:
The dark mode feature will not be implemented in this cycle.
This approach enables the team to concentrate on the most critical tasks, ensuring efficient allocation of effort and resources based on priority.
By applying various evaluation and prioritization methods, project teams make well-informed decisions that consider impact, effort, risks, and long-term value. Selecting the most suitable methods based on project specifics, goals, and available resources is essential for success.
