the smart pms blog http://thesmartpms.posterous.com Most recent posts at the smart pms blog posterous.com Mon, 16 May 2011 18:36:00 -0700 The Value of Project Management in the New Millennium http://thesmartpms.posterous.com/the-value-of-project-management-in-the-new-mi http://thesmartpms.posterous.com/the-value-of-project-management-in-the-new-mi

Conrado Morlan, EzineArticles.com Basic Author

Technology in the first decade of the second millennium supplied a large variety of project management tools targeted to Project Management Offices (PMO) and Project Management professionals.

Some organizations opted to use those tools under the traditional approach to training, improving processes and project or followed guidelines to achieve the Organizational Project Management Maturity Model (OPM3).

Despite the availability of technological tools and best practices, the reality was that many projects were unsuccessful under the traditional approach because either they exceeded project budget or did not meet the proposed schedule. As a consequence business goals were not achieved.

The traditional approach to project management may consider projects as independent units and its success or failure is based on metrics usually associated with financial ratios. A new approach is being adopted by organizations in which projects are no longer independent units but are tied to the business strategy. This may sound simple, although there is no framework or best practice available to apply the new approach.

The organizations are looking to become more competitive, efficient and profitable and they will need a business and project management experts working together to attain the business goals. Both, business and project management experts will work towards the integration of projects into the business strategy.

Under the new approach, new metrics to define project success or failure need to be in place. Project must deliver benefits to the organization and budget or schedule variations may be justified by slight changes in the business strategy. There will be no room for projects originated in functional areas if they are not aligned to the business strategy. Project managers and their teams must become more strategic and take responsibility to deliver results during and at the end of the project.

What is the value for the organization to aligning projects and business strategy?

According to a research study published in 2008 conducted by Athabasca University and sponsored by the Project Management Institute, there are tangible and intangible benefits for the organization when projects are aligned with the business strategy.

The research was conducted in more than 60 organizations around the world and had the cooperation of more than 45 researchers who conducted over 400 interviews. The research results showed that among the tangible benefits the organizations:

  • Saved money and resources
  • Increased profitability
  • Retained customers
  • Increased market share

Among the intangible benefits, the organizations:

  • Attained strategic goals
  • Improved corporate culture
  • Innovated
  • Improved quality of life of their community

The research highlighted that intangible benefits have a direct relationship with the maturity level of project management. Project financials and financial metrics were not available or were not provided by the surveyed organizations.

As a practitioner who had the opportunity to work under both approaches, you may experience that under the traditional approach your role as project manager was more challenging and functional areas' resistance to change was higher. When projects are aligned to business strategy, the majority of the functional areas are engaged and willing to participate in the project to produce the expected benefit and achieve the business goals.

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Mon, 15 Nov 2010 18:43:00 -0800 Strategic Project Management as a Tool to Achieve Competitive Advantage http://thesmartpms.posterous.com/nogallery-strategic-project-management-as-a-t http://thesmartpms.posterous.com/nogallery-strategic-project-management-as-a-t

Strategicplanning

Current business trends force companies to find the right mix to become more efficient and agile; these two elements are important to achieve competitive advantage, which will result in increasing market share, revenue or efficiency. 

For years, companies around the world have look for how to achieve competitive advantage through a traditional project management approach, this operational approach covers functions and operational controls, which include strict controls on schedules, budgets and resources. The results of these projects have not produced the expected benefits and competitive advantage even when operational controls were met. 

On the other hand, some innovative companies seeking to dominate their business sector are practicing an alternative project management approach and opt for an evolutionary process that will take them from an operational approach to a strategic approach. Under this new perspective, projects will be used as the mean to achieve real business objectives that support business strategy.

Research studies (Brown and Eisenhardt 1998) have confirmed that projects aligned with business strategy will be the foundation to take advantage over their competition and achievement of business objectives. The results suggest that companies choosing to adopt the new approach will require commitment at all levels in order to change the project management paradigm and establish the new way in which projects being undertaken will be aligned to business strategy and reach business goals.

Under this new approach, projects must be dynamic, flexible and capable to adapt to possible changes in strategy or external factors. The project environment, although “mobile", must not lose sight that business objectives should be meet as established at project inception. This new approach should not change the project’s attribute of temporality.

Companies adopting the strategic approach to project management must change the project selection process and establish a "competimeter" which contains project selection criteria as follows:

"Follow the race" is aimed to improve operations and achieving results in the short term. These projects usually allow the company to maintain its market position

"Winning the race” is designed to improve efficiency or effectiveness and the main objective is to increase market share

"Changing the rules of the game" is designed to create a new product or service that will make the company distinct from the others and strive towards the desired competitive advantage

This project classification establishes that project outcome is not a product or service but how to approach the competition and win.

Under the strategic approach, project manager’s role will expand and in addition to fulfilling their traditional functions, project managers will need to step into strategic and leadership roles. The project manager will turn into a strategic professional who will lead project and cross-functional team, will participate in board meetings where decisions are made about starting, continuing or cancelling projects based on business results.

Once the company achieves the maturity level using the strategic approach to project management, projects will be identified during company’ strategy sessions counting with board members acceptance and their commitment to assist the project team when necessary.

Having working with companies transitioning from the traditional project management operational approach to the strategic approach, I had the opportunity to see how the general manager cascaded the new project management approach across the organization. Solid results were achieved during the first eighteen months having all functional areas involved and collaborating in projects towards specific business goals.

Companies willing to set a competitive advantage will adopt the strategic approach to project management and define what to do, how to do it and how to achieve business objectives through project aligned to company’s strategy.

Reference:

SL Brown and Eisenhardt, K. M. 1998 Competing on the Edge, Harvard Business School Press: Boston, MA

 

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