chapter2.pptx
TRANSCRIPT
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Organization Strategy and Project SelectionCHAPTER TWO
Copyright © 201 !c"ra#$Hill Ed%cation& All Right' Re'er(ed&Po#erPoint Pre'entation )y Charlie Coo*
ROJECTANAGEMENTThe !anagerial Proce''
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WHERE WE ARE NOW
2–2
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2–3
WHY PROJECT MANAGERSNEEDTO UNDERSTAND STRATEGY
• Changes in the organization’s mission andstrategy
– Project managers must respond to changeswith appropriate decisions about futureprojects and adjustments to current projects.
–
Project managers who understand theirorganization’s strategy can become e ectiveadvocates of projects aligned with the rm’smission.
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2–4
PROJECTS AND STRATEGY
• Mista es caused by not understanding the role ofprojects in accomplishing strategy!
– "ocusing on problems or solutions with low strategicpriority.
– "ocusing on the immediate customer rather than thewhole mar et place and value chain.
– #veremphasizing technology that results in projects thatpursue e$otic technology that does not t the strategy
or customer need – %rying to solve customer issues with a product or service
rather than focusing on the &'( with )'( of the value*Pareto’s +aw,.
– -ngaging in a never ending search for perfection onlythe project team really cares about.
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2–5
THE STRATEGICMANAGEMENT PROCESS:AN OVERVIEW
• /trategic Management – 0e1uires every project to be clearly lin ed to
strategy. – Provides theme and focus of rm’s future
direction.• Responding to c !nges in the e$ternal
environment2environmental scanning• A""oc!ting sc!#ce #eso$#ces of the rm to improve
its competitive position2internal responses to newprograms
– 0e1uires strong lin s among mission3 goals3objectives3 strategy3 and implementation.
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%OUR ACTIVITIES O% THESTRATEGIC MANAGEMENTPROCESS• Review and define the organizational mission.• Set long-range goals and objectives.• Analyze and formulate strategies to reach
objectives.• Implement strategies through projects
2–6
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St#!tegic
M!n!ge&entP#ocess
+,"-RE 2&1
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CHARACTERISTICS O%
O'JECTIVES
2–8
E.H,/,T 2&1
S Speci ic Be specific in targeting an objective
! !ea'%ra)le stablish a measurable indicator!s" of progress
A A''igna)le #a$e the objective assignable to one personfor completion
R Reali'tic State what can realistically be done withavailable resources
T Ti e related State when the objective can be achieved%that is% duration
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PROJECT PORT%O(IOMANAGEMENT THE NEED %OR A STRONG PROJECT PRIORITYSYSTEM• &he Implementation 'ap
– &he lac$ of understanding and consensus on strategyamong top management and middle-level !functional"managers who independently implement the strategy.
• (rganization )olitics – )roject selection is based on the persuasiveness and
power of people advocating the projects.• Resource *onflicts and #ultitas$ing
– #ultiproject environment creates interdependencyrelationships of shared resources which results in thestarting% stopping% and restarting projects.
2–9
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'ENE%ITS O% PROJECTPORT%O(IO MANAGEMENT• 4uilds discipline into the project selection
process.• +in s project selection to strategic metrics.•
Prioritizes project proposals across acommon set of criteria3 rather than onpolitics or emotion.
• 5llocates resources to projects that align
with strategic direction.• 4alances ris across all projects.• 6usti es illing projects that do not support
strategy.• 7mproves communication and supports 2–10
E.H,/,T 2&2
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2–11
A PORT%O(IO MANAGEMENTSYSTEM• 8esign of a project portfolio system!
– Classi cation of a project – /election criteria depending upon classi cation –
/ources of proposals – -valuating proposals – Managing the portfolio of projects.
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PORT%O(IO O% PROJECTS
'Y TYPE
2–12
+,"-RE 2&2
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2–13
A PORT%O(IO MANAGEMENTSYSTEM• /election Criteria
– %in!nci!" &ode"s: paybac 3 net presentvalue *9P:,
–
Non)*n!nci!" &ode"s: projects of strategicimportance to the rm.• Multi ;eighted /coring Models
–
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2–14
%INANCIA( MODE(S•
%he Paybac Model – Measures the time the project will ta e torecoverthe project investment.
–
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2–15
%INANCIA( MODE(S+CONT,D-• %he 9et Present :alue *9P:, model
–
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E.AMP(E COMPARING TWOPROJECTS
USING PAY'AC/ METHOD
2–16
E.H,/,T 2& a
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E.AMP(E COMPARING TWOPROJECTS
USING NET PRESENT VA(UEMETHOD
2–17
E.H,/,T 2& )
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2–18
NON%INANCIA( STRATEGICCRITERIA• %o capture larger mar et share• %o ma e it di>cult for competitors to enter the
mar et• %o develop an enabler product3 which by its
introduction will increase sales in more pro tableproducts• %o develop core technology that will be used in
ne$t generation products• %o reduce dependency on unreliable suppliers• %o prevent government intervention and
regulation•
%o restore corporate image or enhance brandrecognition
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2–19
MU(TI)CRITERIA SE(ECTIONMODE(S•
Chec list Model –
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SAMP(E SE(ECTION0UESTIONS USED IN PRACTICE
2–20
E.H,/,T 2&
Topic 3%e'tion
Strategy4align ent What 'peci ic 'trategy doe' thi' project align #ith5
6ri(er What )%'ine'' pro)le doe' the project 'ol(e5
S%cce'' etric' Ho# #ill #e ea'%re '%cce''5
Spon'or'hip Who i' the project 'pon'or5
Ri'* What i' the i pact o not doing thi' project5
Ri'* What i' the project ri'* to o%r organization5
Ri'* Where doe' the propo'ed project it in o%r ri'* pro ile5/ene it'7 (al%e7 RO, What i' the (al%e o the project to thi' organization5
/ene it'7 (al%e7 RO, When #ill the project 'ho# re'%lt'5
O)jecti(e' What are the project o)jecti(e'5
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SAMP(E SE(ECTION0UESTIONS USED IN PRACTICE
2–21
E.H,/,T 2& cont8d
Topic 3%e'tionOrganization c%lt%re ,' o%r organization c%lt%re right or thi' type o project5
Re'o%rce' Will internal re'o%rce' )e a(aila)le or thi' project5
Approach Will #e )%ild or )%y5
Sched%le Ho# long #ill thi' project ta*e5
Sched%le ,' the ti e line reali'tic5
Training4re'o%rce' Will 'ta training )e re9%ired5
+inance4port olio What i' the e'ti ated co't o the project5
Port olio ,' thi' a ne# initiati(e or part o an e:i'ting initiati(e5
Port olio Ho# doe' thi' project interact #ith c%rrent project'5
Technology ,' the technology a(aila)le or ne#5
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PROJECT SCREENINGMATRI.
2–22
+,"-RE 2&
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2–23
APP(YING A SE(ECTIONMODE(• Project Classi cation
– 8eciding how well a strategic or operationsproject ts the organization’s strategy.
•
/electing a Model – 5pplying a weighted scoring model to align
projects closer with the organization’sstrategic goals.
• 0educes the number of wasteful projects• @elps identify proper goals for projects• @elps everyone involved understand how
and why a project is selected
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2–24
PROJECT PROPOSA(S•
/ources and /olicitation of ProjectProposals – ;ithin the organization – 0e1uest for proposal *0"P, from e$ternal
sources *contractors and vendors,• 0an ing Proposals and /election of
Projects – Prioritizing re1uires discipline3 accountability3
responsibility3 constraints3 reduced =e$ibility3and loss of power.
• Managing the Portfolio – /enior management input – %he priority team *project o>ce,
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2–25
A P#opos!"%o#& 1o# !nA$to&!ticVe ic$"!#T#!c2ing +AV(-P$3"icT#!nspo#t!tionP#o4ect
+,"-RE 2& A
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2–26
Ris2An!"5sis1o#677)Ac#e
Wind%!#&
+,"-RE 2& /
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2–27
MANAGING THE PORT%O(IOSYSTEM•
/enior Management 7nput – Provide guidance in selecting criteria thatare aligned with the organization’sstrategic goals
–
8ecide how to balance available resourcesamong current projects• %he Aovernance %eam 0esponsibilities
– Publish the priority of every project – -nsure that the project selection process is
open and free of power politics. – 0eassess the organization’s goals and
priorities – -valuate the progress of current projects
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2–28
P#o4ectSc#eeningP#ocess
+,"-RE 2&;
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2–29
P#io#it5An!"5sis
+,"-RE 2&<
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'A(ANCING THEPORT%O(IO %ORRIS/S AND TYPES O%PROJECTS• Bread-and-butter )rojects
– Involve evolutionary improvementsto current products and services.
• )earls – Represent revolutionary commercial
opportunities using proven technical advances.• (ysters
–
Involve technological brea$throughswith high commercial payoffs.• +hite lephants
– Showed promise at one timebut are no longer viable.
2–30
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/EY TERMS
, ple entation gap=et pre'ent (al%eOrganizational politic'Pay)ac*Priority 'y'tePriority teaProject port olioProject 'creening atri:Project 'pon'or Sacred co#Strategic anage ent proce''