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Close the gap between Strategy and Projects

In their previous article, titled?A Theoretical Framework to Align Project Management with Business Strategy?, Milosevic & Srivannaboon present a framework for alignment in order to achieve a competitive edge. Breakthrough Performance Management’s next article is about linking performance metrics to business strategies. We now examine the gap between organizational components and project-level components.
Johnson cites the research of Cathleen McFarlan and F. Warren McFarlan, which found that approximately $2.3 trillion is spent annually on projects by U.S. businesses. These projects are being carried out by a majority of companies without a strategy that ties them to their organizational needs. Mcfarlan and Benko conclude that portfolio management is essential to optimize projects. It should focus on the synergy of projects and align with corporate strategy.
Johnson’s primary question is: “How can companies overcome these obstacles so that their projects collectively support corporate strategy, achieve efficiency, and position the company for adapting to the future?” First, you need to look at your projects through a strategy lens. The second approach is to create a project-portfolio brain?. Portfolio management systems allow executives to see across their entire enterprise for duplicate efforts and help them reduce costs. Communication is key to success at all levels.
You can tie the project-level structure and strategy of the resource loaded networks (RLN) development activities to the contract procurement structure or strategy at the business unit. 1) Pre-award, 2) Contract execution, and 3) Contract close. A request for proposal (RFP), which is part of the pre-award phase, follows a procurement timeline that includes four phases: 1) receive draft RFP; 2) receive final RFP; 3) submit proposal and 4) contract award. Procurement specialists at the organizational level are most concerned with capturing the contract, and then handing it over to the project. The procurement specialists at the organizational level are also concerned about capturing the contract and handing it off to the project. However, they are more focused on the implementation strategy. The success of a project is often determined by the alignment of organizational components with project-level components.
The business unit has a strategy for capturing contracts that will continue to grow the business in terms revenue recognition and customer relationships. Projects must implement the contract proposal on time and within budget. Strategic managers can group projects by considering similarities to the customer, such as contract type, Integrated Masters Plan/Integrated Master Schedule development, Earned Value Management, etc. Portfolio tiers are able to capture processes, procedures, and other continuous improvement activities that have a direct connection to customer requirements. Portfolio management helps close the gap between strategy and projects by using an enterprise project structure and strategy which link the hierarchy of the organization with that of the project. Portfolio management can be used by strategic managers to accomplish their projects together, support the corporate strategy, increase efficiencies, and position a company for the future.
Refer to
Johnson, L. (2004, June). Reduce the gap between strategy and projects. Harvard Management
9(6), 3-5. Retrieved October 12, 2008 from EBSCO MegaFILE.