Selection Criteria for Acquisition and Divestiture Projects
Dheeraj Shrivastava, PMP
Program/Project Management Consultant
Introduction
Choosing what projects to undertake for acquisition or divestiture programs is one of the least understood and commonly mishandled activities within many Organizations. However, defining and bringing awareness to the selection process can save organizations millions of dollars. When creating projects for these programs, the process can take many steps and forms; they can involve execution of strategic initiatives, creation of new assets, termination of old processes and assets, implementation or development of technology, or general process improvement, Sharing resources. but it all starts with creating Service Agreements. They can be named as Transaction, Transition, Purchase, or an Enterprise Service Agreement. Name doesn't matter but the purpose is the same - to create small programs for a large corporate transaction.
Service Agreements and Project Mapping
Service Agreements are Legal Agreements between Acquiring and Acquired Company. <>
Project Selection
What do you know about the process you use to select your organization’s projects? Do you select the right projects and produce the best results? How do you know? Selecting and initiating projects turn strategy into action.
Done thoughtfully, the process project selection can significantly improve the organization’s ability to execute its strategy and thereby enhance its results. The Project Selection process closely relates to the key organizational
systems such as leadership, strategic planning, and process management.
There are many difficulties involved with committing the organization to adapting an objective and visible selection process. Inconsistencies in project information are one of the common reasons that organizations struggle with project selection and decision-making. Lack of information combined
with a lack of objective decision-making criteria makes it impossible to prioritize projects, resulting in large unresolved project portfolios.
When the organization finds the keys to project selection, the doors to performance excellence are opened. Finding these keys require tenacity because they are hidden at the end of a long road. An organization must become skilled in leadership and strategy, and employ a structured systems approach to make headway on this journey.
Weighted Scoring Method
Weighted Scoring is a technique for putting a semblance of objectivity into a subjective process. Using a consistent list of criteria, weighted according to the importance or priority of the criteria to the organization, a comparison of similar “products” can be completed. If numerical values are assigned to the criteria priorities and the ability of the product to meet a specific criterion, a “weighted” value can be derived. By summing the weighted values, the product most closely meeting the criteria can be determined.
This Weighted Scoring Method can be use when selecting projects or anything where we must compare one item to another.
For example, when purchasing a new car, how do you pick the one you want? You might make a list of items the car must definitely have to be considered. Then you write down additional options you’d like to have. And you leave a few spaces to note features one car has the others don’t.
After trips to the various dealers, you tally up the list of matches and buy the one which meets the list the best. While you might not be this formal, you do it mentally. You are simply weighting some features and functions of the car of higher importance than others and if a car does not meet one of those important criteria, it is thrown out of the running.
When selecting technology for your organization, you probably have a lot more money and impacts on the business involved. A wrong decision can have dire consequences.
Weighted Scoring Method for Acquisition Programs
I personally find weighted Scoring Method of project selection very useful with few exceptions (Will discuss the later in this paper) however it can be even more useful for the projects supporting Acquisition and Divestiture Programs.
For the past decade I have spend much time doing Acquisition Programs and almost all the cases I had more success with the scoring models.
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