Outside of the project charter, the other topic that is greatly emphasized by PMI within the Initiating process is project-selection methods.
PMI feels strongly that organizations should have a formal process for deciding projects to sponsor and for ensuring that projects are supportive of the organization's strategic objectives. In many organizations, some type of senior management steering committee or Program Management Office (PMO) performs this project-evaluation and -selection process.
Project-selection methods are the techniques used to execute this process, and they are organized into two major categories: benefit measurement methods and constrained optimization methods.
The project-selection method(s) used by an organization should be relevant to the objectives of the company and its managers and should be consistent with the capabilities and resources of the organization.
Two General Types of Project-Selection Methods
The two methods of project selection are benefit measurement (comparative approach) and constrained optimization (mathematical approach). Table 3.1 summarizes the key points of these two method types.