Alignment with Corporate Strategy - Case Study Example

Topic: Strategy Required to Improve Project Management Outcomes - Approved projects align with corporate strategy Introduction Background Projectmanagement plays a significantly critical role in any organization’s performance outcomes. It is not as simple as is considered in the framework of allotted resources and competing environment for producing results. As per PMBOK Guide, project management is the use of knowledge, expertise, instruments and tactics to project functions to fulfill project needs. Any project can not be accomplished without proper planning, organizing, monitoring and managing the project functions as per the projected needs (Mangano, 2008). Problem Statement Our organization is also facing problems in not managing projects within the given timeline and budget. It is very clear from the internal memorandum sent by the chairman to the senior project manager wherein he has shared his concern over declining number of such projects delivered in right time and budget although the project managers are capable of technical knowhow and follow principles based management practices. Let’s hope that ideas offered by all of us on how to implement latest project management principles and processes to better manage time and cost factors could help the our organization. Our objective is to provide inputs on effectively managing new projects through our individual ideas on why project success rate is falling down while keeping the principles of project management in view. The past experience in project management has not been remarkable. That’s why opinions of the team members have been sought by the chairman. Actually, the company is lagging behind the goals earmarked. It was expected by the top management that with the given expertise and technical hold, we will enter the global market very soon but overseas projects taken so far have not helped us in capturing foreign market; the gap between the goals and outcomes is widening. Our aim is to rework on current management theory to see that approved projects align with our organization’s strategy. Accountability needs to be determined so that in case a project fails, responsibility is fixed. A number of factors determine the success of a project. Sometimes, it is seen that dedicated support for the project is not provided by the senior members of the board. Without overall and individual level support by top brass of the organization, project starts staggering. When the project reaches certain stage, another urgent project comes by for getting attention of the project team as it has to be completed before the ongoing project. The role of the senior management becomes very crucial in the organization of the running project. The proposal will discuss such objectives in detail and offer suggestions on adherence to project processes and methodologies as per the set parameters over various project sections. Suggestions will be made on including the PM methodology into the identified PM knowledge fields and measuring the success of the project against agreed parameters. Further, an attempt will be made to capture the new project culture, crucial for the success of a project. 2. Discussion with Recommendations 2.1 Alignment with Corporate Strategy For any project, success rate depends on its alignment with the corporate strategy. At a given time, there could be many projects waiting approval. Green signal should be given to that project only which adheres to corporate strategy of the organization, not to the other project favored out of way through provision of funds and other resources (Wessels, 2008). Project portfolio management can provide the answer to zeroing-on the most urgent project to be approved by the management. Out of the different categories of projects in the organization’s portfolio such as Mandatory projects, Strategic projects, Business unit projects, Reactive projects, and Pet projects, only Strategic projects need to be prioritized as they are in alignment with a company’s mission and vision (Wessels, 2008). It requires far-sightedness on the part of top management to select such projects that follow the company’s strategy. As per the outcomes on PMI Research Conference held in Montreal in June 2005, there exists a traditional pattern over mixing of projects. The routine portfolios of companies include only 5 percent strategic projects; rest of the projects include 50 to 60 percent reactive projects, 30 percent projects cater to business unit processes, and the remaining 5 percent are pet projects (Wessels, 2008). Our attempt should be to focus on meeting and achieving “specific strategic business objectives” only to correct the wrong perspective. Our portfolio needs to be directed by strategic alignment in the choice of business unit projects and reactive projects. Pet projects need to be discarded from the portfolio if they are not strategically aligned. Only such projects need to be cleared that increase the business value to be supported through a strong business case (Wessels, 2008). A business case needs to be presented to prioritize a project on the basis of its alignment with the strategic aim of the business besides other factors including the investment capability of the project, associated risks, and the project ranking tool (Wessels, 2008). The Strategic Business Objectives and the Alignment of the Projects We need to develop a corporate level strategic plan on our goals and the steps needed to achieve them. The alignment part of a business case need to “connect the dots” in between the achievements of the project as per the company’s goals earmarked in the strategic plan and map the role of the project in getting personal goals to find out whether the projects being undertaken are part of the business strategy like if, for example, the undertaken project does not support our marketing strategy to capture new areas. Revenue earning and market expansion projects need to be prioritized in the matter of providing funding in comparison to other projects that are related to strategies that are not detrimental to the leading mission and goal of our company (Wessels, 2008). We need to follow selection criteria and define it objectively, such as: • Customer satisfaction: impression of the project on outside customers • Business outcomes: effect of project on strategic objectives • Employee satisfaction: whether the project helps in employee retention • Revenue: impact on revenue generation • Cost: whether the cost to fund the project is high or not • Longevity: duration of benefitting from the added service • Size of investment: whether large enough to create risk • Project complexity risk: whether the project is simple or not • New technology risk: choice between tested technology and new technology • Benefit risk: risk to getting projected benefits Recommendations We need to follow the guideline for prioritizing the projects in the portfolio by: 1. We should discard pet projects, which hardly offer a business case. It is a tough task that needs to be handled diplomatically as such projects add to the comfort zone of project leaders. 2. Portfolio should be the ideal place for all strategic projects. 3. We should sideline business unit projects if they are not focusing on the strategy, goal and vision of our organization. 4. We should search for reactive projects to decide whether they are creating value that is in alignment with the strategy, goal and vision, as a good number of projects, above 80 percent, can potentially fail this parameter. IT staff needs to devote more time on projects that are well aligned with our organizational goals rather than giving too much time on fixing defects. We need to come out of the just-do-it mode by fixing the resources to what is achievable and need to adhere to a project cycle that repeats process (Wessels, 2008). In brief, no project without a business case should be sponsored and supported, which does not align with corporate aims. References Mangano, Vanina., 2008. PMBOK - part 1 tutorials. Project Management Institute. Available from: http://www.vtc.com/products/PMBOKPart1/IntroductiontoProjectManagement/73681 [Accessed 29 August 2011]. Wessels, D.J., 2008. Portfolio management: aligning projects with corporate strategies and values. Management Concepts. Available from: www.managementconcepts.com/portal/server.pt?open=18...2... [Accessed 29 August 2011]. Read More