Quản trị kinh doanh - Chapter 3: Organisational strategy and project selection

CHAPTER 3Organisational Strategy and Project SelectionLearning Elements3.1 Further develop and understand the importance of the methods that define and align an organisation’s project activity.3.2 Understand the features of portfolio management systems and the role of a typical Project Management Office (PMO).Learning Elements (cont)3.3 Be able to identify what information and support a PMO should be providing to your project environment.3.4 Understand the project manager’s responsibilities in relation to supplying information to a PMO.Why Project Managers Need to Understand Strategy Project managers must respond to changes with appropriate decisions about future projects and adjustments to current projects.Project managers who understand their organisation’s strategy can become effective advocates of projects aligned with the firm’s mission.Common MistakesFocusing on problems or solutions with low strategic priority.Focusing on the immediate customer rather than the whole market place and value chain.Overemphasising technology that results in projects that do not fit the strategy or customer need.Trying to solve customer issues with a product or service rather than focusing on the 20% with 80% of the value.Engaging in a never-ending search for perfection only the project team really cares about.The Strategic Management Process: An Overview Key stagesDefine and review the organisational mission, vision and values.Set the organisation’s strategic objectives.Analyse the strategic objectives and identify the ‘ideal’ investment mix.Implement strategies through portfolios, programs and projects.Stage 1Define and review the organisational mission, vision and valuesThe mission identifies ‘what we want to become’ or the raison d’être.A written mission statement provides focus for decision making when shared by organisational managers and employees.Stage 1 ToolsSWOTPESTELPorter’s 5 ForcesBlue Ocean StrategyStrategy MapsBalanced Scorecard2–9Stage 2Set the organisation’s strategic objectivesStrategic objectives translate the organisation’s mission and vision into specific, concrete, measurable terms. Strategic objectives set targets for all levels of the organisation.Remember SMARTA!Stage 2 (cont)Stage 3Analyse the strategic objectives and identify the ‘ideal’ investment mixThe portfolio of investments identified in support of the strategic objectives is a result of a complex process.This potentially involves business managers, program managers and other subject-matter experts.Stage 3 (cont)The business case includes:Strategic alignment criteriaDefinition of the business problemBenefits identification and analysisOptions analysis, do-nothing option, deferred option and three other optionsBusiness risk analysisFunding summaryMilestone summaryStage 4Implement strategies through portfolios, programs and projectsImplementation answers the question of how strategies will be realised, given available resources, equipment, change tolerance and a host of other factors. Stage 4 (cont)These factors include:1. Completing tasks requires allocation of resources2. Authority, responsibility and performance – the organisation’s structure3. Planning and control systems must be in place4. Motivating project contributors will be a major factor for achieving project success5. Prioritising projectsThe Need for an Effective Portfolio Management SystemProblems in implementing include:The implementation gapThe organisation’s politicsResource conflicts and multitasking.Benefits of Portfolio Management SystemsA Portfolio Management SystemSelection CriteriaFinancialBCRNPVPaybackNon financialTo make it difficult for competitors to enter the marketTo develop an enabler product, which by its introduction will increase sales in more profitable productsSelection Criteria (cont.)Checklist modelsThe most frequently used method in selecting projects has been the checklist. This approach basically uses a list of questions to review potential projects and to determine their acceptance or rejection. Selection Criteria (cont.)Multi-weighted scoring modelsA weighted scoring model typically uses several weighted selection criteria to evaluate project proposals. Weighted scoring models will generally include qualitative and/or quantitative criteria. Multi-weighted Scoring Models (cont.)Selection Criteria (cont.)Pair-wise criterion (Analytic Hierarchy Process)Nominal Group Technique (NGT)Applying a Selection ModelContinued on next slideApplying a Selection Model (cont)Project Portfolio Management (PPM)Benefits include:Strategic alignment across project portfoliosBetter collaboration across organisational silosImproved decision making and accountabilityStreamlined PMO processes and templatesImproved organisational productivityKey TermsAnalytic Hierarchy Process (AHP)Benefit Cost Ratio (BCR)bottom-upimplementation gapinnovation processinvestment business casemissionNet Present Value (NPV)Nominal Group Technique (NGT)pair-wise criterionpayback modelportfolio management Continued on next slideKey Terms (cont) priority system priority team/project portfolio office Project Management Information Systems (PMIS) Project Portfolio Management (PPM) systems project sponsor sacred cow SMARTA strategic objectives strategic planning top-down vision