A project manager presents a business case for a new project, using only the projected Return on Investment (ROI) to justify the selection. A senior stakeholder challenges this, stating that other factors must be considered. What is the project manager's most appropriate next step?
Replace the ROI calculation with a non-financial method, such as a scoring model based entirely on stakeholder opinions.
Proceed with the project but agree to monitor and report on the other factors the stakeholder mentioned during execution.
Defend the use of ROI as the most important and objective financial measure for project selection.
Acknowledge the stakeholder's point and propose a multi-criteria analysis that includes strategic alignment, risk exposure, and resource constraints in addition to ROI.
This statement is correct. Project selection should not be based on a single criterion, especially a purely financial one like ROI. Best practices, as outlined in the PMP framework, advocate for multi-criteria decision analysis. This involves balancing financial metrics with other crucial factors like how well the project aligns with the organization's strategic goals, the level of risk involved, and the availability of necessary resources. By incorporating these elements, the project manager provides a more holistic and robust justification for project selection, addressing the stakeholder's valid concern.
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