Strategy and project selection
Models should not make the final decision, the people using the model should
Organization strategy and project selection i. I learned about organization strategy and project selection - Very important to understand linkage between project management and strategic management. - If your company change mission or strategies, every thing in company have to change too. - How to implement those strategies?, strategies change, project change, because directly link between project management and strategic management. - Strategies are very important, if they wrong, competitor can win you, - Company must have mission and vision, direction of company or picture, from vision and mission we have goals, related to strategy to reach objectives, and implement strategies, project come here, carry up projects. - We have to integrate project management, strategies, and knowledge management, automatic come together, can not use project management without SM and KM. - Project manager need to understand strategy, because of it help project manager make appropriate decisions and adjustments and can be effective project advocates. - Strategic management are responding to change in the external environment and allocating scare resource of the firm to improve its competitive position. - Process: mission, objective, strategies, and project. ii. The strategic management process: 4 activities
- Review and define the organizational mission.
- Set long-range goals and objectives .
- Analyze and formulate strategies to reach objectives. Formulate says 20% (not difficult)
- Implement strategies through projects. Implement says 80% (important, and more difficult)
iii. Project PortfolioWe need for project portfolio management system, because of almost of projects are complicated projects. We need roles criteria priorities and key issue for reduce or prevent 3 problems: implementation gap, organization politics, and resource conflicts and multitasking. - Implementation gap: misunderstanding, or lack of communication and consensus on strategy among top management and middle-level managers who independently implement the strategy. - Organization politics: project selection is based on the persuasiveness and power of people advocating the projects. - Resource conflicts and multitasking: the multiproject environment creates interdependency relationships of share resources which results in the starting, stopping, and restarting projects. We know why project portfolio management system is very useful for project management. Because - Builds discipline into project selection process. - Links project selection to strategic metric. - Prioritizes project proposal across a common set of criteria, rather than on politics or emotion. - Allocates resources to projects that align with strategic direction. - Balances risk across all projects. - Justifies killing projects that do not support organization strategy. - Improve communication and supports agreement to project goals. A critical factor to ensure the success of integrating the strategies plan with project lies in a process that is all participants clearly know, starts with top management’s directives, with projects first and integrates them with the strategic plan We have 3 types of portfolio of projects: must do (compliance) projects, operational projects, and strategy projects. - Compliance projects: must do projects. - Operational projects: needs to support current operations, these projects designed to improve efficiency of delivery systems, reduce product costs, and improve performance. TQM is operational project. - Strategy projects: directly support organization’s long-run mission, do these strategies to make project.How to select the projects? We use - Selection criteria : financial model (NPV, Payback, and IRR) and non financial criteria. - Multi-weighted scoring models : uses several weighted selection criteria to evaluate project proposals, Remark: Selection criteria need to mirror the critical success factors of an organization. Models should not make the final decision, the people using the model should. Models are tools for guiding the evaluation process so that the decision-makers will consider relevant issues and reach a meeting of the minds as to what projects should be supported and not supported. iv. Applying a selection model Project Classification - The most important criterion for selection is the project’s fit to the organization strategy. - The criterion should be consistent across all types of projects and carry a high priority relative to other criteria. - This uniformity across all priority models used can keep departments from sub optimizing the use of organization resources. - The appropriate criterion can used to evaluate their proposal.Selecting a Model - Senior management is interested in identifying the potential mix of projects. - Weighted scoring models result in bringing projects to closer alignment with strategic goals. - Using a weighted scoring approach helps project managers understand how their project was selected. - How their project contributes to organization goals. - How it compares with other projects. - Project selection is one of the most important decisions guiding the future success of an organization. Sources and solicitation of project proposals - Encourage and keep solicitations open to all sources (internal and external sponsors) - RFP (Request for proposal) to contractors/vendors with adequate experience to implement the projectRanking proposals and selection of projects
Responsibility for prioritizing
Managing the portfolio systemSenior management input
The priority team responsibilityBalancing the portfolio for risks and types of projects - to balance projects by type, risk, and resource demand. - Project portfolio matrix - Bread-and butter - Pearls - Oysters - White elephant