One of the main reasons that projects exist is because of how well the concept fits into helping businesses meet their strategic goals and to respond to current business conditions. Quite honestly, business strategy and project management go hand in hand. Businesses today are forced to be much more agile than they were 30-40 years ago. Business have to deal with a climate that includes shorten product life cycles, increasing technical capabilities, agile competition, all of which make it a necessity to be much more competitive and agile in order to meet that competition and serve customer needs (Cleland 1998)
Today’s Business Climate
In today’s business climate business has to be able to organize a group that can solely concentrate on one objective that meets a business’s strategic goal or need. “Projects are the means for achieving strategic goals. Entering new markets, driving down costs, delivering innovation— all are achieved through projects (Verzuh 2011)”. What businesses have to do is to carefully determine all they can do with the available resources they have.
This means they have to have a steering committee, made of management and stakeholders who have skin in the game, who make the decisions on which projects will be approved. They will base their decisions on how the proposed project fits into the company strategy. They will ask “how well does the proposed project utilize the available resources and at what cost? Which project is going to get us the most bang for our buck?”
Project Portfolio Management
I have worked for companies where “Project Portfolio Management (PPM)” (Verzuh 2011) was handled quite successfully. “It ensures that projects and programs promote organizational strategies and goals” (Verzuh 2011). I’ve worked for some where it wasn’t handled as well and you ran into a Vice-President’s pet project that would suck away all of the resources you thought were committed to your project. The object of the PPM is to ensure that only those projects that move the company towards its stated strategic objective shall be approved. PPM “accomplishes that by avoiding the common trap of trying to do all projects in the midst of limited resources. It requires disciplined decisions driven by agreed-upon priorities.” (Verzuh 2011)
But PPM cannot work if it isn’t organized correctly and the company is not dedicated to adhering to its principles. PPM can bring a balanced portfolio of projects that help a business to achieve its strategic goals while delivering the highest return on its investment.
It’s much like changing from Waterfall as a project methodology to Agile as a methodology. If you’re not fully dedicated to it then it won’t work.
At Walgreens we use a hybrid system that continually needs tweaking. They have a project intake group that reviews the submitted project idea forms. The project idea is reviewed by the Intake Steering Committee made up of the directors of the various team divisions from within the BSS Retail Group. They determine if the project fits into the business strategy and in what way it fits (does it add value or is it a fix). Once the committee approves the project for further review it is assigned to a Project Manager. The project proceeds to identify all impacted teams and develops all the supporting documentation including a high level business requirements document, the project charter, a high level functional requirements document, and what we call an E0 ROM budget estimation (+/_50%). The business requesting the project, and the Intake Steering committee, use the information gathered by the Project Manager to make a determination on the project.
Ultimately, a company that doesn’t develop some kind of process in which to review and approve projects stands losing because it will have wasted resources, time, and money. That business will ultimately find itself out of business as much better organized businesses that understand the value of PPM will beat them to market.
Verzuh, Eric (2011-11-03). The Fast Forward MBA in Project Management (Kindle Locations 9926-9927). Wiley. Kindle Edition.
Cleland, D. I. (1998). Strategic project management. In J. K. Pinto (Ed.), The Project Management Institute Project Management Handbook (pp. 27-54). San Francisco: Jossey-Bass.