OMGT Project Management Chapter 2

Implementation Requirements

1. Allocation of resources 2. formal and informal organization that complements and supports strategy and projects 3. planning and control systems 4. motivating project contributors 5. areas receiving more attention in recent years are portfolio management and prioritizing Page 34projects

Two main reasons a project manager needs to understand their mission and strategy

1. Can make appropriate decisions and judgements 2. To understand their organization's strategy is so they can be effective project advocates.

Classification of a project

1. Compliance 2. Operational 3. Strategic

Implementation gap symptoms

1. Conflicts frequently occur among functional managers and cause lack of trust 2. Frequent meetings are called to establish or renegotiate priorities 3. People frequently shift from one project to another, depending on current priority. Employees are confused about which projects are important 4. Resources are not adequate.

Strategy formulation steps

1. Realistic evaluation of the past and current position of the enterprise 2. Assessment of internal and external environments 3. SWOT Analysis (Strengths, weaknesses, opportunities, threats) 4. Identifying critical issues and strategic alternatives 5. Cascading objectives or projects assigned to lower divisions, departments, or individuals

Two major dimensions of strategic management

1. Responding to changes in the external environment and allocating scarce resources of the firm to improve its competitive position 2. The internal responses to new action programs aimed at enhancing the competitive position of the firm

Four Activities of the Strategic Management Process

1. Review and analyze the organizational mission 2. Analyze and formulate strategies 3. Set objectives to achieve strategy 4. Implement strategies through projects

Project screening matrix

A matrix used to assess and compare the relative value of projects being considered for implementation.

Net present value

A minimum desired rate of return discount (e.g., 15 percent) is used to compute present value of all future cash inflows and outflows.

Sacred cow

A project that is a favorite of a powerful management figure who is usually the champion for the project.

Scenario planning

A structured process of thinking about future possible environments that would have potential high impact to disrupt the way you do business, and then developing potential strategies to compete in these altered environments.

Organization politics

Actions by individuals or groups of individuals to acquire, develop, and use power and other resources to obtain preferred outcomes when there is uncertainty or disagreement over choices.

Project portfolio

Group of projects that have been selected for implementation balanced by project type, risk, and ranking by selected criteria.

Organizational Mission

Identifies what we become

Multitasking

Involves starting and stopping work on one task to work on another project, and then returning to work on the original task.

Statements in mission statements frequently include

Organizational philosophy, key technologies, public image, and contribution to society

Strategic Management Process

Strategic management is the process of assessing "what we are" and deciding and implementing "what we intend to be and how we are going to get there."

Priority team

The group (sometimes the project office) responsible for selecting, overseeing, and updating project priority selection criteria.

Implementation gap

The lack of consensus between the goals set by top management and those independently set by lower levels of management. This lack of consensus leads to confusion and poor allocation of organization resources

Priority system

The process used to select projects. The system uses selected criteria for evaluating and selecting projects that are strongly linked to higher-level strategies and objectives.

New-school thinking recognizes that project management is

at the apex of strategy and operations

More specific mission statements tend to give

better results because of a tighter focus

Strategy formulation includes

determining and evaluating alternatives that support the organization's objectives and selecting the best alternative.

Strategy

fundamentally deciding how the organization will compete

Mission statement

identifies the scope of the organization in terms of its products or services

Mission statements change

infrequently

Traditional components found in mission statements are

major products and services, target customers and markets, and a geographical domain

Organizations use projects to convert strategy into

new products, services, and processes needed for success

The larger and more diverse an organization,

the more difficult it is to maintain a strong link between the strategic plan and projects

Strategic management

the process of assessing "what we are" and deciding and implementing "what we intend to be and how we are going to get there." Strategy describes how an organization intends to compete with the resources available in the existing and perceived future environment.

Most important criterion

the project's fit to the organization strategy.

Operational Projects

Projects needed to support current operations. Designed to improve efficiency of delivery systems, reduce product costs, and improve performance

Strategic Projects

Projects that directly support the organization's long-run mission. Frequently directed towards increasing revenue or market share. Examples are new products, research, and development

Compliance Projects

Projects typically needed to meet regulatory conditions to operate in a region. "Must do"

Payback

The time it takes to pay back the project investment (investment/net annual savings). The method does not consider the time value of money or the life of the investment.

Project Sponsor

Typically a high-ranking manager who champions and supports a project.

Formulating strategy answers the question

What needs to be done to reach objectives