In this chapter, the learning objectives are: Further develop and understand the importance of the methods that define and align an organisation’s project activity, understand the features of portfolio management systems and the role of a typical Project Management Office (PMO), be able to identify what information and support a PMO should be providing to your project environment,...
CHAPTER Organisational Strategy and Project Selection Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-1 Learning Elements 3.1 Further develop and understand the importance of the methods that define and align an organisation’s project activity 3.2 Understand the features of portfolio management systems and the role of a typical Project Management Office (PMO) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-2 Learning Elements (cont) 3.3 Be able to identify what information and support a PMO should be providing to your project environment 3.4 Understand the project manager’s responsibilities in relation to supplying information to a PMO Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-3 Why Project Managers Need to Understand Strategy • Project managers must respond to changes with appropriate decisions about future projects and adjustments to current projects • Project managers who understand their organisation’s strategy can become effective advocates of projects aligned with the firm’s mission Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-4 Common Mistakes • Focusing on problems or solutions with low strategic priority • Focusing on the immediate customer rather than the whole market place and value chain • Overemphasising technology that results in projects that not fit the strategy or customer need • Trying to solve customer issues with a product or service rather than focusing on the 20% with 80% of the value • Engaging in a never-ending search for perfection only the project team really cares about Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-5 The Strategic Management Process: An Overview Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-6 Key stages Define and review the organisational mission, vision and values Set the organisation’s strategic objectives Analyse the strategic objectives and identify the ‘ideal’ investment mix Implement strategies through portfolios, programs and projects Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-7 Stage efine and review the organisational mission, vision and values he mission identifies ‘what we want to become’ or the raison d’être written mission statement provides focus for decision making when shared by organisational managers and employees Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-8 Stage Tools • • • • • • SWOT PESTEL Porter’s Forces Blue Ocean Strategy Strategy Maps Balanced Scorecard Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 2–9 3-9 Stage et the organisation’s strategic objectives trategic objectives translate the organisation’s mission and vision into specific, concrete, measurable terms Strategic objectives set targets for all levels of the organisation emember SMARTA! Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-10 Stage mplement strategies through portfolios, programs and projects mplementation answers the question of how strategies will be realised, given available resources, equipment, change tolerance and a host of other factors Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-14 Stage (cont) These factors include: Completing tasks requires allocation of resources Authority, responsibility and performance – the organisation’s structure Planning and control systems must be in place Motivating project contributors will be a major factor for achieving project success Prioritising projects Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-15 The Need for an Effective Portfolio Management System Problems in implementing include: • The implementation gap • The organisation’s politics Resource conflicts and multitasking Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-16 Benefits of Portfolio Management Systems Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-17 A Portfolio Management System Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-18 Selection Criteria Financial • BCR • NPV • Payback Non financial • To make it difficult for competitors to enter the market • To develop an enabler product, which by its introduction will increase sales in more profitable products Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-19 Selection Criteria (cont.) Checklist models •The most frequently used method in selecting projects has been the checklist •This approach basically uses a list of questions to review potential projects and to determine their acceptance or rejection Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-20 Selection Criteria (cont.) ulti-weighted scoring models weighted scoring model typically uses several weighted selection criteria to evaluate project proposals eighted scoring models will generally include qualitative and/or quantitative criteria Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-21 Multi-weighted Scoring Models (cont.) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-22 Selection Criteria (cont.) • Pair-wise criterion (Analytic Hierarchy Process) Nominal Group Technique (NGT) Copyright â 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-23 Applying a Selection Model Continued on next slide Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-24 Applying a Selection Model (cont) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-25 Project Portfolio Management (PPM) Benefits include: • Strategic alignment across project portfolios • Better collaboration across organisational silos • Improved decision making and accountability • Streamlined PMO processes and templates • Improved organisational productivity Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-26 Key Terms Analytic Hierarchy Process (AHP) Benefit Cost Ratio (BCR) bottom-up implementation gap innovation process investment business case mission Net Present Value (NPV) Nominal Group Technique (NGT) pair-wise criterion payback model portfolio management Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e Continued on next slide • • • • • • • • • • • • 3-27 Key Terms (cont) • • • • • • • • • • • priority system priority team/project portfolio office Project Management Information Systems (PMIS) Project Portfolio Management (PPM) systems project sponsor sacred cow SMARTA strategic objectives strategic planning top-down vision Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-28 ... Management in Practice, 1e 3-2 4 Applying a Selection Model (cont) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-2 5 Project. .. Larson, Gray, Project Management in Practice, 1e 3-1 0 Stage (cont) Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice, 1e 3-1 1 Stage... Gray, Project Management in Practice, 1e 3-1 6 Benefits of Portfolio Management Systems Copyright © 2013 McGraw-Hill Education (Australia) Pty Ltd Pearson, Larson, Gray, Project Management in Practice,