Wednesday, January 28, 2015

How Microsoft Project Server calculates Business drivers priorities

As part of a series of articles I wrote on Portfolio Analysis within Microsoft Project Server 2013, there is another topic I was interested to understand. How Microsoft Project Server calculate business drivers prioritization.
To highlight this, I will reuse business drivers I have defined previously for my article on the EfficientFrontier:
  • Expand revenue of the Bobby Brown product line
  •  Increase product awareness among people between 13 and 18
  •  Increase the number of members of the VIP club
  • Introduction of new premium products
  • Reduce employee turn over
  • Reduction of support call waiting time

There are within Project Server 2013, two ways to prioritize business drivers:
  •  A “Calculated” method where an automatic pair comparison of each driver generates relative priority scores (the one we will see here),
  •  And a “Manual” method where users specify priority values for each driver directly.


To weight the drivers and define priority, the Analytic Hierarchy Process (or AHP) can be used. Its principle is to first decompose decisional problems into a hierarchy of more easily comprehended sub-problems, each of which can be analysed independently.
There are 7 levels of comparison:
  • Is extremely more important than
  • Is much more important than
  • is more important than
  • Is as important as
  • Is less important than
  • Is much less important than
  • Is extremely less important than

Using this method, drivers are compared two by two


At the end of the exercise, here is what we have:


To complete the matrix, let’s go back to the 7 levels of comparison:
  • Is extremely more important than
  • Is much more important than
  • is more important than
  • Is as important as
  • Is less important than
  • Is much less important than
  • Is extremely less important than

They are symmetric, 3 above “Is as important as” and 3 below. This means that if a driver A “is extremely more important than” a Driver B, then the Driver B “is extremely less important than” the Driver A. Of course, the driver A “is as important as” the Driver A J.
Here is the complete matrix:


Now is the key question, how to replace sentences such as “is as important as” by numbers, we can use to calculate the priority of each drivers.
It was quite simple via Bing (even if never find it on any Microsoft websites) to find the values of each, here they are:

Next steps is to simply replace text by values.


Now this is where it become funny, yes it is. Project Server use a statistical calculation method called eigenvectors. If, like me, this is not something you studied at school, or is not your bedside book, you might check http://en.wikipedia.org/wiki/Eigenvalues_and_eigenvectors. Was it clearer? No? Me neither J
Better option is to find either an online application to calculate them, like http://comnuan.com/cmnn01002/, or find Excel add in (I found an article on MrExcel.com where this tool is mentioned http://digilander.libero.it/foxes/SoftwareDownload.htm).
The system then normalize the eigenvectors. It calculates the sum of eigenvectors, each of them will be divided by this sum to normalize them and get the business driver priority. (E.g. Driver 1 => 0.89687/2.32503 = 38.57%).


Let’s check these results in Project Server…



Well, not so bad J

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