Case Study – Portfolio Scoring Model - Western European Bank

This case study focuses on a Western European subsidiary of a large multinational banking and financial services corporation. While the subsidiary operates only in a medium-size European country, the parent organization is present in dozens of countries and serves millions of customers.

The subsidiary in question has managed to survive the financial crisis relatively unscathed, but still had certain performance issues including stagnant income numbers and even a slight dip in 2012.

As a result of these issues the senior management decided to analyze and prioritize their projects as well as to better align them with the company strategy for the next three to five years.


Considering its previous challenges the executive management team developed the following strategy:

  • 50% of the future “simple” sales should be offered online in order to cut operating costs
  • 100% of future simple services should be offered online, again, in order to cut the operating costs
  • All of the products and services offered should be described using “easy language” in order to improve transparency and understanding
  • All of the products and services introduced by the global headquarters should undergo product nationalization in order for them to conform to local laws and standards
  • The bank wants to become a top employer in the country

The Scoring Model

The senior management team has agreed on the following scoring model for the company project proposals (see also Table 1):

  • NPV
  • Payback
  • Strategic fit
  • Technical project risk
  • Customer impact (importance for customer)
  • Employee impact (potential decrease in the headcount)

Table 1

Selection Criteria

Points Awarded (Maximum possible 60)


61 points


1 point

5 points

10 points



NPV < €1 Mil

€1 Mil < NPV < €5 Mil

NPV > €5 Mil

Yes, if less than 0 for new products and services

No, for “Stay-in-business” projects


P > 3 years

2 < P < 3 years

P < 2 years


Strategic fit

Fits 1 of the criteria

Fits 2-3 of the criteria

Fits 4-5 of the criteria


If does not fit any of the criteria

Technical Risk

Known technology

Somewhat unknown technology

Completely unknown technology


Customer impact (Market Attractiveness)


(few customers require such product or service)


(some customers require such product or service)


(many customers require such product or service)


Employee impact

Many employees may be laid off

Some employees may be laid off

No or few employees may be laid off



First category added to the model was the Net present Value of the proposed projects. Projects with an NPV less than one million euros would get a score of one point; the proposals with an NPV between one and five million euros would get a score of 5 points, and finally, ventures whose NPV promises to exceed five million euros get ten points.

An interesting discussion happened regarding the “Kill” designation for this category. Initiallly the management designated this variable as a “Kill” category. In other words, if the proposed venture had a negative NPV, it would be automatically removed from the projects list without any further consideration. However, once the facilitator mentioned that this decision effectively removed all future IT upgrade projects, the decision was reconsidered. It was decided to designate this category as “Kill” for all new product and services projects, but keep it as a “no-kill” for maintenance ventures.

Payback was the second variable added to the model in order to promote projects that would fully recover their costs sooner rather than later.

Strategic fit was an obvious candidate for addition to the model. In order to impose some measurability on this category, the management decided to award one point to the proposals that fit at least one of the strategy criteria, five points to the ventures including between two and three of the strategic criteria, and ten points to the projects including between four and five strategic priorities. This particular category has been designated as a “Kill”.

Technical project risk has also been added to the variable mix in order to promote projects involving familiar technologies and to “penalize” ventures including unknown platforms and “know hows”.

The fifth category called “Customer Impact” has been designated to measure the attractiveness of the new product or service to the customer base. After having a very long debate regarding the measurability of this category, we finally decided to go with the following scheme:

  • Low - few customers require such product or service – 1 point
  • Medium - some customers require such product or service – 5 points
  • High - many customers require such product or service – 10 points

Finally, the executives insisted on adding a fifth category they called “Employee Impact” since they were seriously concerned regarding possible negative impact on the reputation of the bank. Therefore, project proposals that could potentially lead to significant layoffs, would get a rating of one point, while projects leading to small and no layoffs would get five and ten points respectively.

All of the above implies that a project candidate in this model could get a maximum score of sixty points and a minimum of six points. The executives also discussed at length the “Joker project” concept, i.e. the project proposals that score low on a proposed model, but may have a potential breakthrough impact on the company business. The executive team has decided to award a default sixty one points to such proposals thus taking them to the very top of the rank-ordered proposals list. In order for a project candidate to receive the “joker” rating it had to be approved by the CEO of the company.


About the Author

Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting is an internationally acclaimed expert and speaker in the areas of project/portfolio management, scope definition, process improvement and corporate training. Jamal Moustafaev has done work for private-sector companies and government organizations in Canada, US, Asia, Europe and Middle East.  Read Jamal’s Blog @

Jamal is an author of two very popular books: Delivering Exceptional Project Results: A Practical Guide to Project Selection, Scoping, Estimation and Management and Project Scope Management: A Practical Guide to Requirements for Engineering, Product, Construction, IT and Enterprise Projects.