Education
What are the 5 Methods of Selecting Projects?
An organization has many interesting and challenging projects to work on, and it needs proper management for delivering the project on time and within budget. This is where project selection comes in, as it is about picking the right project at the right time for the organization.
The project selection methods for project managers offer a set of time-tested techniques based on sound logical reasoning to choose a project. These offer the best chances of success and filter out undesirable projects with a very low likelihood of success. It is an important concept for practicing project managers and aspirants preparing for the PMP exam.
In this article, we will understand project selection and the key methods to select a project.
What is Project Selection?
• Project selection is assessing projects to ensure that they align with the organization’s strategic objective and deliver maximum performance.
• This process helps to choose projects based on a prioritized hierarchy.
• All project selection methods are based on two criteria: Benefits and Feasibility.
• “Benefit” refers to all the positive outcomes that include all the reasons to take the project. It includes anything from economic gain to social and cultural significance.
• “Feasibility” refers to the chances of the project being a success. This process takes time and a lot of research but also clarifies the project selection.
There are several methods to select a project, depending on the main objective that needs to be fulfilled. There are 2 approaches to selecting a project: the Mathematical approach (Constrained Optimised Method) and the Comparative approach (Benefit Measurement Method).
In the sections below, we’ll be looking at the 5 kinds of comparative approaches, as they are more popular.
1. Benefit-Cost Analysis
• This method is used to discover the most cost-effective way to execute a project by estimating the costs along with benefits associated with a particular project.
• It is a simple ratio where we compare the project’s benefits to its initial cost.
• The projects with a higher Benefit-Cost Ratio or lower Cost-Benefit Ratio are generally chosen over others.
• This method is strictly for projects where we are concerned with money.
For Example:
• Suppose we have a project that generates $1,25,000 worth of benefits and costs $50,000, then the ratio would be 2.5 (can also be written as 5.2).
• This indicates that the organization will receive 2.5 units of benefit for every 1 unit of the cost they will incur.
2. Payback Period
• It is the basic project selection method in which the time frame required to repay the investment cost is calculated.
• Here we are concerned with the time taken to recover the initial expenses by neglecting the other factors like the time value of money, risks involved, etc.
• When this method is used to select the project, we’ll always look for the project with the shortest payback period.
Example:
• Suppose we have a project that costs $1 million, generating a revenue of $1,00,000 per annum. The payback period, in such a case, will be 10 years.
• If we have another project that costs $1 million and generates a revenue of $2 million per annum, the payback period will be 5 years.
• So, if the primary focus is to repay the initial investment, we always want to select the one with a lower payback period.
You can learn more about project selection methods through Simplilearn online education.
3. Discounted Cash Flow
• In this method, we take inflation into account. This means that today’s money isn’t going to have the same value in the future. For example, $50,000 won’t have the same value ten years from now.
• Therefore, it is important to consider the discounted cash flow when calculating the investment cost and ROI of any potential project.
4. Net Present Value (NPV)
• The Net Present Value refers to the difference between the project’s current value of cash inflow and the current value of cash outflow.
• The NPV is always positive, and the project with the higher NPV is preferred.
• It is better to choose NPV over the payback period as it considers the future value of money.
• However, this isn’t a method for figuring out the discounted value for the present value calculation, and also it does not provide a picture of profit or loss.
5. Internal Rate of Return (IRR)
• This method is used when we are trying to calculate the interest rate to get our net present value to zero.
• The net present value will be zero when the present value of outflow is equal to the present value of inflow.
• IRR is used for selecting the project with the best profitability; thus, the project with the higher IRR is chosen.
• IRR should not be used exclusively to judge the worth of a project, as the project with a lower IRR might have a higher NPV, assuming there is no capital constraint. The project with a higher NPV should be selected as it will increase the shareholder’s profit.
Process of Project Selection
The projects are properly evaluated based on the economic models mentioned above, and then they are finalized through any of the following processes.
• Scoring Model – Here the project selection committee will prepare a list of project criteria and score each of them according to their relevance, importance, and priority. Then a list of projects from best to worst is created and the top most project will likely be the one more beneficial and feasible to take.
• Peer Review – Here the project managers are asked for their views on what they think about which project will be more beneficial for the organization.
• Murder Board – Here we’ll have a panel with the people within the organization, who will do everything they can to poke holes in the argument, i.e., they will keep on questioning why the organization thinks that a particular project is the best to go for.
Project selection may seem simple, but it requires a lot of techniques and research to choose the best project. The project managers should be well versed with all these methods to be a helpful asset to the organization.
Education
Scaler appoints new heads for its online and offline businesses
Amar Srivastava becomes chief executive of the online business and group chief product officer; Vidit Jain takes charge of the offline schools
BENGALURU: Scaler is shuffling its top deck as the AI skilling race heats up. The Bengaluru-based tech education company has elevated two senior executives to lead its online and offline businesses, signalling a sharper push into an AI-driven market.
Amar Srivastava, previously senior vice president for product and business, has been appointed chief executive of the online business and group chief product officer. Vidit Jain has been elevated to senior vice president and head of Scaler School, taking charge of the company’s offline education units, the Scaler School of Business and the Scaler School of Technology.
The company has also recently appointed Ratnakar Reddy as head of enterprise for India and the Middle East and North Africa, with a brief to drive partnerships with governments and enterprises for AI-led skilling programmes.
Abhimanyu Saxena, co-founder of Scaler, said the promotions reflect the company’s confidence in both leaders and the direction it is heading. “Amar and Vidit have been central to Scaler’s journey, and their elevations reflect our conviction in their leadership and the direction we are shaping as a company,” he said. “With leadership now in place across the business, we remain focused on building engineers the world’s best companies want to hire. In an AI-first economy, that mission is more urgent and more achievable than ever. Our next chapter is centred on building an AI-native workforce from India, equipped to compete in a technology-driven global economy.”
Srivastava brings over a decade of experience building education-focused ventures. He previously founded Intellify and was part of the early team at Doubtnut. At Scaler, he will lead the online business with a focus on growth, profitability and expansion into new segments, while strengthening the product ecosystem across the group. He is blunt about what the AI economy actually needs. “The AI economy does not have a shortage of tools. It has a shortage of engineers who can think clearly, build reliably, and keep learning as the ground shifts. That is what we are building toward,” he said.
Jain brings more than 15 years of experience across startups and consulting, including stints at MPL and McKinsey and Company. He will oversee growth and profitability of Scaler’s offline business. His priorities are immediate and unambiguous. “The offline experience is where depth gets built, and that depth is critical in the AI era. Over the next 12 months, our focus will be on consistent growth, stronger unit economics, and delivering outcomes for students while building long-term employer partnerships,” he said.
Founded in 2019, Scaler is valued at $710 million and backed by Peak XV Partners, Tiger Global and Lightrock India. Its parent firm, InterviewBit, has featured on the Financial Times’ Asia Pacific High Growth Companies rankings every year from 2021 to 2025. On average, Scaler’s learners see a 4.5x return on investment and a salary increase of around 126 per cent.
With leadership locked in across every business unit, Scaler is betting that the next wave of global tech hiring will be won or lost on the quality of engineers coming out of India. It is a big bet. But the numbers, and the promotions, suggest the company is in no mood to hedge.
