Project-evaluation routine - Strategic Management

The planning system should include a routine which ensures that all projects go through a number of defined stages, and that the right people are brought into the project at the right time – for investigation, coordination, approval, and implementation. Unless this is clearly defined, the company may well find that important stages are overlooked, and that decisions are made before the project has been evaluated. Such a system also improves interdepartmental communication and helps to prevent managers from keeping projects to themselves and deliberately denying access by people from other departments who should play a part in their evaluation.

As mentioned earlier, the project planning system cuts across the strategic planning system of which it is a part. The relationship can perhaps be visualised as a series of horizontal and vertical bars. The horizontal bars are successive strategic and operating plans which are joined together by the various vertical bars of project planning. Some vertical bars may overlay several horizontal bars – occasionally they may be so short that they barely embrace one horizontal. This relationship is illustrated in Figure.

Relations-of-project plans to long range plans

There will be variations in the project planning system to suit different types of projects. The development and introduction of a new product is likely to follow a longer path than a project to install a new piece of equipment. The internal organisation of decision taking within the company will also affect the way in which the system is organised. Even with these qualifications, it is still useful to consider an outline of what a project planning system might look like. The example is of a procedure for the development of a new product, and was designed for a company in the food industry. This example simplifies some of the problems; particular projects may need to add further stages. A decision to launch a new product may mean that the company has to extend its premises, which in turn means a detailed study of the physical and financial alternatives. The amount of work within each of the stages will vary from project to project, and may be complicated by failures at certain points which bring a need to go back to the beginning again. The system does not indicate control mechanisms. It becomes apparent from a study of this simplified system that it requires a coordinator. Someone must be responsible for ensuring that each step is completed, that everyone knows the part he or she is to play, and the completion date. Different types of project require different coordinators. In this particular example it could probably be adequately filled by the product manager responsible for the project. For other projects there may be other sensible choices: the best coordinator is one who has a personal interest in seeing that the project is completed to its targets of finance, physical performance, and time.

Complex projects require the assistance of coordinating and controlling techniques. Networks are particularly valuable, the more so when it is remembered that each of the substages may include a number of tasks which themselves have to be carefully planned and coordinated.

Stages-in-project planning

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