The way that projects are managed and executed
has a direct relationship to organisational success because everything that people do in a business should be linked back to
its strategy. A strategy is a plan of action that allows a long-term goal to be
achieved. If a project fails, then this costs the organisation time and money.
The organisation will not achieve its short-term goals, and this will prevent
it from achieving its longer-term goals – or it will at least slow it up. Considering
this thought process then it makes sense that projects are managed according to
a strategy, and that this strategy is aligned with the corporate strategy. Here
we will consider the relationship between the project strategy and the
corporate strategy and portfolio and program management.
How the Corporate Strategy Impacts on the Project Strategy
The
project or program strategy will be informed by the corporate strategy. This
allows the business to implement its overall strategy. Since strategies are
usually developed at the upper echelons of the organisation, these will cascade
down to lower levels, to be managed and delivered through portfolios, programs
and projects. This occurs in a hierarchical and systematic manner. If performed
well, there will be cohesion, visibility and an effective means of
communication. Communication is important, since without it there may be
difficulties for the project team in understanding what they are doing and why.
Without this, there can be project management failure.
Within
a solid framework and with good communication, project strategy can be managed
dynamically. But what is the project strategy? In most cases, the project
strategy typically refers to all aspects of the project lifecycle. Usually,
clear review points are decided on to make sure that the project is being well
managed. If it is not, then optimisation can occur, as the project strategy
continues to develop.
When
the organisation’s senior management team devise the corporate strategy, they
decide what they are going to do, and how to achieve it. Running projects is
often a major component of how they are going to go about delivering the
strategy. It is all very well having a finely-polished mission statement
presented on the company website, and a thorough five-year plan documented, but
without action, nothing happens. As noted earlier, the word strategy means
having a plan of action. Putting aside the five-year plan and failing to take
any action will usually mean that the strategy is not delivered, and long-term
goals do not get met. Steps must be taken to ensure that processes are in place
to deliver projects and achieve goals. This requires that a number of
activities occur. First, it must be decided what projects would be needed to
deliver the strategy. There will usually be various projects needed, but not
sufficient resources to complete all of them at the same time. Resources are
precious. The senior management team must communicate the priorities and assign
resources to these.
A
clear direction must be provided by the senior management, and a business owner
is assigned to ensure that the project stays on track to help the business
achieve its strategy through the project strategy employed. The Project
Management team will then report to this business owner. The project or program
manager thus has a critical role in impacting strategy delivery and achieving
organisational goals. If the PMO runs the project efficiently and effectively,
with good communication throughout then there is a greater chance of the
strategy being achieved, and long-term results being delivered.
Project
management is usually a core process within the overall business enterprise
model. Programs and projects allow the organisation to effect change in a
managed and controlled way. It is worth noting that in many cases, companies
consider that program management implies the management of business benefits,
as well as the idea of product or brand. This distinguishes it somewhat from
project management.
How Project Management Tools and Principles Help Advance Business Strategy
Project management
tools and principles are important in effectively advancing business
strategy. This is because they help the people working on the project to stay
on track and align with the overall vision. As part of the project strategy,
projects must be properly defined, with a clear scope and related to corporate
goals and strategies. From there, Gantt charts and other project tools help
track who needs to be doing what and when, so that milestones can be delivered
in a timely manner. Controlling changes to the project is also important to
keep it on target. If senior management requires a major change in scope at the
last minute, a change control process helps because it assesses what the impact
of the change will be in terms of time and cost. This can then be communicated
effectively back up the hierarchy so a decision can be made regarding what is
most important – delivering on time and to budget or including this change.
This helps with effective strategic decision making. Portfolio management is
often of fundamental importance for project and program prioritisation, as well
as for resource allocation.
It
is also important to realise that value management is a key aspect of project
strategy. Value management works to ensure that value is being created through
undertaking the project. Meanwhile, risk management is also deployed to ensure
that all risks to the project strategy (and consequently the overall corporate
strategy) are identified, assessed, understood and mitigated. With continuous
review and change it is possible to ensure that the project strategy works to
deliver the most value possible, with risks well managed.
In
short, if a project is to be successful, it will be run according to a project
strategy that is clearly aligned with the overall corporate strategy. These
links will be communicated and understood, and the organisation will have
checks and balances in place to ensure the project is managed such that it can
deliver.
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