Project Management and the OrganisationalStrategy
An ESI InternationalWhite Paper
www.esi-emea.com
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Table of Contents
Project Management and the Organisational Strategy
2
An Overview of the Strategic Management Process
3
The Need for a Project Selection and Priority System
5
Questions to be answered 5The Selection Process 7Proposals Screening
7
The Priority Team
8
Selection Criteria
8
Assessing Results
10
Summary 11
© ESI International, Inc. 2006 All rights reserved.
2
Project Management and theOrganisational Strategy
Project management is rapidly becoming a standard way of doing businessin organisations. We accomplish a considerable portion of our typical firm’seffort through projects. Projects are becoming the tools of implementingthe business strategy of an organisation. Every project in an organisationshould contribute to its strategic plan. How can we ensure this linkage? Weneed to make sure that we integrate projects within the strategic plan. Thisintegration requires a process for prioritising projects by their contributionto the plan. In this white paper, we will introduce the strategic planningprocess, how it relates to project management, and how to implement aproject selection and prioritisation process.
Project Management & Business Strategy
Project Management & Business Strategy
3
© ESI International, Inc. 2006 All rights reserved.
An Overview of the Strategic Management Process
In customer driven organisations, vision, mission, and goals are set to meet theneeds of the customers. The vision states, “What we want to become.” We need tocommunicate this vision throughout the organisation. In addition, we need to makesure that everyone in the organisation is aware of the organisation’s mission, “Whatour business is and how we go to achieve our vision.” Business goals translate thevision, and the mission into broad long-term, measurable, and tangible terms. Theobjectives answer in detail where a corporation is heading or when it is going to getthere. These objectives should set targets for all levels of the organisation. Eachlevel of the organisational objectives should support the higher-level objectives inmore detail. Table 1 depicts examples of goals, strategies and objectives.
Table 1: Examples of Business Goals and Related StrategiesBusiness Goal
Business Strategy
• Regain market sharerecently lost toGeneral Motors• Regain qualityreputation that wasdamaged because ofPinto gas tankexplosions
Company
Ford Motor Company
• Increase productivity
Burger King
• Continue companygrowth• Continue companyprofits
CP Railroad
• Resize and downsizepresent models• Emphasise use ofprogrammedcombustion enginesinstead of diesel engines• Increase peopleefficiency• Increase machineefficiency• Modernise• Develop valuable realestate holdings• Complete an appropriaterailroad merger
The development of strategies to meet these needs and goals answers thequestion of “What we need to do to achieve these goals.” It requires anextensive analysis of the internal and external environments. Based on apolitical, economic, social, and technological analysis (PEST), we analysethe external environment to identify opportunities, and threats. We analysethe internal environment looking for strengths and weaknesses such asmanagement, facilities, core competencies, product quality, technology,and financial resources. The deliverable of this analysis is a set of strategiesdesigned to best meet the needs of the customers.
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