Strategic planning for project management is the development of a standard methodology for project management, a methodology that can be used over and over again, and that will produce a high likelihood of achieving the project’s objectives. Although strategic planning for the methodology and execution of the methodology does not guarantee profits or success, it does improve the chances of success.
One primary advantage of developing an implementation methodology is that it provides the organization with a consistency of action. As the number of interrelated functional units in organizations has increased, so have the benefits from the integrating direction afforded by the project management implementation process.
Methodologies need not be complex. Figure below shows the “skeleton” for the development of a simple project management methodology. The methodology begins with a project definition process, which is broken down into a technical baseline, a functional or management baseline, and a financial baseline. The technical baseline includes, at a minimum:
The functional or management baseline indicates how you will manage the technical baseline. This includes:
The financial baseline identifies how costs will be collected and analyzed, how variances will be explained, and how reports will be prepared. Altogether, this is a simple process that can be applied to each and every project.
Without this repetitive process, subunits tend to drift off in their own direction without regard to their role as a subsystem in a larger system of goals and objectives.
The objective-setting and the integration of the implementation process using the methodology assure that all of the parts of an organization are moving toward the same common objective. The methodology gives direction to diverse activities, as well as providing a common process for managing multinational projects.
Another advantage of strategic project planning is that it provides a vehicle for the communication of overall goals to all levels of management in the organization. It affords the potential of a vertical feedback loop from top to bottom, bottom to top, and functional unit to functional unit. The process of communication and its resultant understanding helps reduce resistance to change. It is extremely difficult to achieve commitment to change when employees do not understand its purpose. The strategic project planning process gives all levels an opportunity to participate, thus reducing the fear of the unknown and possibly eliminating resistance.
The final and perhaps the most important advantage is the thinking process required. Planning is a rational, logically ordered function. This is what a structured methodology provides. Many managers caught up in the day-to-day action of operations will appreciate the order afforded by a logical thinking process. Methodologies can be based upon sound, logical decisions. Figure below shows the logical decision-making process that could be part of the project selection process for an organization. Checklists can be developed for each section of Figure below to simplify the process.
The first box in Figure below is the project definition process. At this point, the project definition process simply involves a clear understanding of the objectives, which should be defined in both business and technical terms.
The second box is an analysis of the environmental situation. This includes a market feasibility analysis to determine:
Project selection process:
The third box in Figure above is an analysis of the competitive situation and includes:
The next box in Figure above is resources and capabilities. Analysis of resources and capabilities, combined with the analysis of competitive positioning just discussed, allows us to determine our strengths and weaknesses. Identifying opportunities and threats lets us identify what we want to do. However, it is knowing our strengths and weaknesses that lets us identify what we can do. Therefore, the design of any type of project management methodology must be based heavily upon what the organization can do.
Internal strengths and weaknesses can be defined for each major functional area. The design of a project management methodology can exploit the strengths in each functional area and minimize its weaknesses. Not all functional areas will possess the same strengths and weaknesses.
The following illustrates typical strengths or weaknesses for various functional organizations:
Having analyzed what we can do, we must now look at past performance to see if there are any applicable lessons learned files that could impact the current project or selection of projects. Analysis of past performance, as shown in Figure above, is usually the best guide for the specifications of the present project.
The final box in Figure above is the decision on whether or not to undertake the project. This type of decision-making process is critical if we are to improve our chances of success. Historically, less than 10 percent of R&D projects ever make it through full commercialization where all costs are recovered. Part of that problem has been the lack of a structured approach for decision-making, project approval, and project execution. All this can be satisfied with a sound project management methodology.
In the absence of an explicit project management methodology, decisions are made incrementally. A response to the crisis of the moment may result in a choice that is unrelated to, and perhaps inconsistent with, the choice made in the previous moment of crisis. Discontinuous choices serve to keep the organization from moving forward. Contradictory choices are a disservice to the organization and may well be the cause of its demise. Such discontinuous and contradictory choices occur when decisions are made independently to achieve different objectives, even though everyone is supposedly working on the same project. When the implementation process is made explicit, however, objectives, missions, and policies become visible guidelines that produce logically consistent decisions.
Small companies usually have an easier time in performing strategic planning for project management excellence. Large companies with highly diversified product lines and multiple management styles find that institutionalizing changes in the way projects are managed can be very complex. Innovation and creativity in project management can be a daunting, but not impossible, task.
Effective strategic planning for project management is a never-ending effort, requiring continuous support. The two most common continuous supporting strategies are the integration opportunities strategy, outlined in Figure below, and the performance improvement strategy, shown in Figure below.
Figure below outlines the opportunities that exist to integrate or combine an existing methodology with other types of management approaches that may be currently in use within the company. Such other methodologies available for integration include concurrent engineering, total quality management (TQM), scope change management, and risk management. Integrated strategies provide a synergistic effect. Typical synergies include.
Project Management Process
Integration opportunities between process strategies:
Qualitative process improvement opportunities:
more work in less time and with fewer resources. Such data verifies the existence of economies of scale.
Concurrent Engineering Process
Total Quality Management (TQM)
Scope Change Management
The qualitative process improvement strategy shown in Figure above is designed to improve the efficiency of the existing methodology and to find new applications for it. The integrated process strategies of Figure above are one part of these process improvement strategies, as shown.
The macroenvironment of business:
Note:Stakeholders are identified in the “immediate environment” circle.
The goal of most organizations is to be more profitable than their competitors.
Project management methodologies contribute to profitability through more efficient execution of the project and implementation of the methodology. This is another valid reason mandating continuous strategic planning.
A good project management methodology will be responsive to all environmental factors and will serve all of its stakeholders. Stakeholders are people who have a vested interest in the company’s performance and who have claims on its performance. Figure above shows, as part of the immediate environment, six commonly used categories of stakeholder: suppliers, customers, employees, creditors, shareholders, and even competitors. Some organizations would also identify government officials and society at large as being among their multiple stakeholders.
One part of strategic planning for project management may include prioritizing the order in which stakeholders will be satisfied if and when a problem exists. A good project management methodology may also include a “standard practices” section, which will discuss moral and ethical considerations involved in dealing with stakeholders.
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