Project Prioritization in Portfolio Management using Quality Function Deployment
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Abstract
Quality Function Deployment (QFD) is a system’s design method which focuses on the needs of the client. QFD assists the development team during the design stage of a system, a process, a product or a service, by translating the requirements set by the customer into engineering specifications.
QFD has its origins in Japan, where it was developed in mid-1960s under the umbrella of Total Quality Management (TQM) to enhance/support product quality design. It was not before mid-1980s when the technique was appreciated, became popular and started being applied extensively by companies in the Western world. The application of QFD is based on the development of a series of interrelated matrices with most widely used the ‘House of Quality’, which enables the prioritization of the engineering characteristics.(Image)
Nowadays QFD is a recognized power tool and its use has been expanded into other disciplines/areas as well. For instance, there are many cases where QFD is applied in construction project management for identifying customer requirements during the design phase. Moreover, QFD is used to support strategic as well as operational decision within a company.
Another interesting application of QFD is to prioritize the projects in the portfolio management of a company. Prioritizing the projects can be a challenge for a company, as people that are related to some projects and will benefit from their execution, tend to consider their projects more important and advantageous than the others. In order to avoid this kind of internal conflicts within a company, the QFD technique can be adapted and applied so that the projects will be prioritized regarding their contributed benefit to internal and external customers.
As aforementioned, in order to apply QFD in portfolio management and develop a matrix similar to the ‘House of Quality’ which will determine the prioritization of the projects, the method should be adapted.
The five steps needed for the application of the adapted QFD technique are:
- Formation of group of internal stakeholders.
- Gathering of the projects, determination of benefits the projects provide to internal and external customers and use of Analytic Hierarchy Process (AHP) to prioritize benefits.
- Determination of complexity criteria and characteristics and use of AHP to quantify the relative degree of complexity.
- Development of adapted ‘House of Quality’ matrix and project prioritization.
- Development of Benefits vs. Complexity matrix to assign people to projects.
The application example that is presented in this article describes the successful use of the QFD method in the Information Technology (IT) department of National City Corporation (NCC) in Cleveland, Ohio, to manage project priorities and project management resources.
