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.