Weighted Scoring Model
In
Business
|
Weighted Scoring Model for MYH Inc. |
|||||
|
Criteria |
Weight |
Project 1 |
Project 2 |
Project 3 |
Project 4 |
|
tie to business strategy |
10% |
90 |
90 |
90 |
90 |
|
upfront costs |
25% |
70 |
80 |
20 |
10 |
|
potential net savings |
25% |
90 |
70 |
50 |
20 |
|
realistic technology |
15% |
90 |
70 |
60 |
50 |
|
in-house expertise |
10% |
90 |
80 |
60 |
50 |
|
potential resistance |
15% |
50 |
90 |
90 |
50 |
|
Weighted Project Scores |
100% |
79 |
78.5 |
55 |
36.5 |
Using the above model, the following is a summary for presentation to the company’s management.
Calculate the price
Projects Summary for Presentation to Management
|
Project Name |
Support to business strategy |
Potential Financial benefits |
Initial assessed value ($) |
|
1.Upgrade of sales staff PCs and laptops |
Boosts morale, improves access to clients |
New contracts coming in valued at $50,000 per annum |
$150,000 |
|
2.Creation of customer website |
High customer integration, reduced turnaround time for addressing concerns |
Potential loss of dissatisfied customer business minimized by $2,000 per month |
$100,000 |
|
3.Installation of SAP financial software |
Accurate data capture, timely processing of payments |
Bad debts expected to reduce from $10,000 to $3,000 annually |
$50,000 |
|
4.Development of Intranet site |
Facilitate stronger inter staff communication |
Cost of stationery and equipment repairs to reduce by 30%, |
$25,000 |
|
Criteria |
Weight |
Project 1 |
Project 2 |
Project 3 |
Project 4 |
|
Supports business objectives |
35% |
90 |
80 |
80 |
85 |
|
Customer support |
22% |
65 |
70 |
15 |
5 |
|
Shorter implementation period |
18% |
85 |
60 |
40 |
15 |
|
Tax incentives |
25% |
50 |
60 |
55 |
40 |
|
Weighted Project Scores |
100% |
66.1 |
69.2 |
52.25 |
43.55 |
Weighted Scoring Model
Is a project management tool used to assist with the selection of projects to implement based on specified criteria. The criteria may be, for example supporting business objectives, providing customer support, time taken to implement the project and tax benefits expected among others.
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First, a criterion for project selection is identified. This is achieved through brainstorming or sending requests to project staff for proposals.
Next, weights are assigned to every criterion. The purpose of weights is to indicate importance of selected criterion. Weights can be assigned using percentages whose sum must be 100%. For each criterion, a numerical score is assigned using numbers like 0-100. The score is an indicator of the extent to which a project satisfies a criterion.
Once weights per criteria and scores are assigned, weighted scores are calculated. This is done as shown below:
Project 1: (90*35%) + (65*22%) + (85*18%) + (20*25%) = 66.1%
Project 2: (80*35%) + (70*22%) + (60*18%) + (60*25%) = 69.2%
Project 3: (80*35%) + (15*22%) + (40*18%) + (55*25%) = 52.25%
Project 4: (85*35%) + (5*22%) + (15*18%) + (40*25%) = 43.55%
Using these computations, the final process involves plotting the weighted scores on a graph. Project selection can be made by interpreting the graph. For instance, from the graph above project 2 would be the most appropriate as it has the highest weighted project score of 69.2
If the projects were to be implemented in succession, the order would be:
- Project 2
- Project 1
- Project 3
- Project 4
These computations can be prepared on an excel spreadsheet. The project team, through creation of formulas, can interchange the scores on any project they please and then analyze how the final weight behaves.
Other than percentages, weights can be established by using points. For instance, the project that meets key objectives may be assigned 10 points, if it meets some objectives 5 points and 0 points if found not to be objective oriented. In this type of model, one does not have to keep multiplying weights by scores and summing up the results. The points are simply added up.
