Project Management in Practice

Beyond the alphabet soup of PRINCE2, MSP, MoP, PMBOK, ITIL, Agile

How do I balance competing investment priorities?


Organisations are forever grappling with the demand of competing investments that give a varying range of benefits. How do they go about prioritising these? Most organisations use business cases as a means to filter out the projects that deserve funding from the ones that have little or no merit. This then introduces a secondary problem of spending a lot of resources on going through a business case, which will never see the light of day. How do you make sure weak business cases do not get all the way before getting knocked back.

Example-ILM-Rail-Freight

Investment Logic Mapping (ILM) provides a good way to filter out some of these early investment dilemmas. This is part of the Investment Management Standard developed by the Victoria Department of Treasury and Finance in Australia. The main driver for the development of this standard was the number of complex investments that required compliance, but never articulated the benefits they were supposed to deliver.  Effectively what started as a mechanism to shape individual investments in 2004 has now matured into programme and organisation levels – including refocusing organisations and monitoring benefits.

The theory behind the standard is quite simple. Rather than a complex set of tools, it is centred around three key concepts

  1. The best way to aggregate knowledge is through an informed discussion that brings together those people with most knowledge of a subject.
  2. The logic underpinning any investment (the ‘investment story’) should be able to be depicted on a single page using language and concepts that can be understood by the lay person.
  3. Every investment should be able to describe how it is contributing to the benefits the organisation is seeking.

In Victoria it is now mandatory for most significant investments. In New Zealand the State Services Commission (SSC) mandates the use of ILM for High Value or High Risk (HVHR) projects as part of its Better Business Cases initiative. It must be remembered that ILM on its own is not the tool that will drive the investment. It is a tool to eliminate initiatives which lack merit.

I have just recently undertaken an Organisational ILM as part of a strategic review for an organisation. I have found it an excellent tool to bring out the challenges in an open forum and to agree on strategic responses. The two hour session was perfect to get enough senior leadership in one room to work through the organisational challenges. I also found it a good use of senior stakeholder time, as they are busy people and often trying to agree a course of action individually with all of them is a significant barrier to change programmes.

If you have used ILM before, I’m keen to know your experience. The only thing I had forgotten is being on your feet facilitating for two hours, while everyone else is seated discussing and having refreshments is quite tiring.

One response to “How do I balance competing investment priorities?

  1. Pingback: Are the days of MS Project numbered? | Management in Practice

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