This document discusses using capabilities analysis to prioritize projects based on business value, risk, and ability to execute. It notes that many IT projects fail to meet expectations or realize value. Capabilities analysis identifies the key capabilities an organization needs, then evaluates each capability based on business value, risk, and ability to execute to generate a "heat map" that helps prioritize projects. This technique provides a framework to objectively discuss priorities based on value, performance, and risk, and allows priorities to be adjusted easily as strategies change. Capabilities analysis has been used successfully over 10 years on over 300 projects saving $200 million.