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Strategic Objectives
Jim Peters, PMP
jmpeters@softwarematters.com
Practical Tips In Aligning Project Portfolios With Strategic Objectives
Presentation Abstract
Practical tips in Aligning Project Portfolios with Strategic Objectives
Practical techniques to help establish and maintain the alignment between projects and
organizational strategic objectives. The presentation focuses on the perspective of project
managers and PMOs in understanding and maintaining strategic alignment.
The issues addressed came from implementing PPM software for large organizations. PPM
solutions include assessment of customer requirements and the design of business processes
used to manage projects, project portfolios, and resources. Often during the requirements
process a gap is identified between the project and project portfolio data available in
the organization and the ability to link that data to the strategic objectives of an
organization. Many projects and programs begin with clear strategic alignment, but that
clarity often fades as work on the project begins. This limits the ability of an organization
to reassess and respond to changes in their industry. And it often results in decisions made
on perceived importance or priority. Effective project portfolio management processes
and metrics can help everyone keep the priorities in focus and allow resource managers
to make objective decisions in utilization of resources.
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Strategy at high level not clearly linked to project and operational plans
Gap in project and project portfolio data available versus balanced scorecard requirements
Initial clarity on strategic significance of a project diminishes over time (the world moves on)
Inability to assess the ongoing value of a project as it relates to the strategic objectives.
Decision making on the basis of perceived importance instead of the strategic importance.
Lack of visibility of the project portfolio in terms of strategic objectives (i.e., no clear link
between the data shown in the balanced scorecard and the portfolio management data)
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Change - It happens not just to projects but to strategies and strategic plans as well. Including assessment of
the impact on projects as part of the change management process allows for more objective and transparent
decision making.
Data Availability of data necessary for controlling projects is a base requirement for PM/PPM systems.
Applying the same design process to the data required for strategic planning can result in close to real time
assessment of project portfolio alignment.
Decision Making Failure to have a consistent method for identifying the relationship of projects to the
strategic plan often results in repeated negotiations for resources or other project commitments. Making
strategic priorities clear at every level provides an objective basis for approaching project trade-offs and
resource allocation.
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Overview
Organizational Strategy & Objectives
Operational
Planning
Strategic
Planning
Initiatives
Project Portfolio
Strategic and Operational
Programs & Projects
Comprehensive Portfolio View
The Standard for Portfolio Management, Second Edition
(Project Management Institute 2008)
1/13/2012
Foundational Terminology
Projects, Programs, & Project
Portfolios
Strategy & Strategic
Objectives
Tactics & Tactical Objectives
Operational Programs
2012 SoftwareMatters.com, Inc.
Project
Project Portfolio
1/13/2012
Strategy
Strategic Plan
Strategic Plan captures the strategy in a form that can be used in managing how the organization
can implement the strategic objectives and evaluate the results.
Balanced Scorecards, KPIs, and dashboards are used to visualize and monitor the Strategic Plan
during implementation.
Alignment
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Alignment is the process of ensuring that the work performed and the products or services created
by the organization match the work, products, or services specified in the Strategic Plan.
Alignment is ongoing, requiring that project and operational initiatives are monitored to determine
if the strategy as defined in the strategic plan will be achieved.
2012 SoftwareMatters.com, Inc.
Identify the
specific,
measureable,
attainable,
responsible
person, and
time specific
attributes of
your
organizations
strategic
objectives.
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Implementing Strategy:
A Project Perspective
Three Phases of Implementing Strategy (From a Project Perspective)
Strategic Plan Defines strategy and determines criteria used
for decision making
Budgeting, Resource Forecasting & Project Selection Maps the
strategy into a plan for implementing the strategy
Strategy Implementation Executes the projects selected to
implement the strategy monitors the implementation of the
strategy
Three Roles of Implementing Strategy (From a Project Perspective)
Executive Management Responsible for Strategy
PMO / Project Oversight Group Responsible for Alignment
Project Management Responsible for Project Execution
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PMO
Executive Management
Strategic Planning
Assign weights to
evaluation criteria
Create Evaluation
Criteria
Review Selection
Criteria and rating/
ranking approach
Transform
Evaluation Criteria
into measureable
Selection Criteria
with methods for
rating / raking
projects.
Project
Management
Add Selection
Criteria as part of
Business Cases
Development
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Determine Resource
Capacity
Update Business
cases with ratings/
values for each of
the evaluation
criteria
Update Evaluation
Criteria ratings for
proejcts
Strategy Implementation
Create / Update /
Review estimates
for each project
Provide estimates
(both cost and
schedule)
Monitor Strategic
Plan
Implementation
Review Business
Cases for
consistency /
accuracy of
estimates
Create Project
Portfolio
Execution Plan
Update Project
Schedules /
Resource
Commitments
Review Strategic
Plan
Implementation
Status
Monitor Project
Execution
Initiate Projects /
Monitor Status
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Strategic
Plan
1. Create
selection
criteria
2. Develop
measures
3. Weight
the selection
sriteria
4. Rate
projects
6. Rank
projects
5. Set budget
& resource
capacity
2012 SoftwareMatters.com, Inc.
7. Establish
cut line
Prioritized
Project
Portfolio
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Projected budget
$2.5-$3.5 Million
In
Maybe
Out
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Stakeholder Mapping
A starting point for Project Alignment
Tip #3
Map the
relationship of
your project to
the
organizations
strategic
objectives
including the
measurements
necessary to
ensure ongoing
alignment.
Projects
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Projects
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Impacts
Suppliers
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Impacted By
Users
Governance Boards/
Steering Committees
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Alignment Mapping
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3.
Strategic Plan
Balanced
Scorecard
KPIs
Dashboard
Other
Systems &
Data
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Operational
Planning
Strategic
Planning
Initiatives
Project Portfolio
Strategic and Operational
Programs & Projects
Comprehensive Portfolio View
The Standard for Portfolio Management, Second Edition
(Project Management Institute 2008)
20 20
5.
Strategic Drivers
Strategic Plan
Organizational Strategy & Objectives
Balanced
Scorecard
Operational
Planning
Strategic
Planning
Initiatives
KPI
Dashboard
Project Portfolio
Strategic and Operational
Programs & Projects
Comprehensive Portfolio View
The Standard for Portfolio Management, Second Edition
(Project Management Institute 2008)
1/13/2012
21 21
7.
Measurement
Data
Balanced
Scorecard
Strategic Plan
Organizational Strategy & Objectives
Operational
Planning
Strategic
Planning
Initiatives
KPI
Dashboard
Other Systems
& Data
1/13/2012
Project Portfolio
Strategic and Operational
Programs & Projects
Comprehensive Portfolio View
The Standard for Portfolio Management, Second Edition
(Project Management Institute 2008)
22 22
Project Alignment:
Identifies the elements of the strategy the project supports.
Establishes methods to gauge both the impact of a project on strategy during
project execution.
Establishes methods to gauge the impact of the results of a project on strategy.
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Include strategic planning process data requirements in PPM solution design Availability
of data necessary for controlling projects is a base requirement for PM/PPM systems. Applying the same
design process to the data required for strategic planning can result in close to real time assessment of project
portfolio alignment.
Include monitoring of strategy as a part of project change Management Change
happens, not just to projects. Monitoring changes in the organizational strategy has very little cost and can help
project teams be proactive in assessing the impact of and responding to change.
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Use the results of the project selection process as part of the project decision making process
Making strategic priorities clear at every level provides an objective basis for approaching project trade-offs and resource
allocation. Failure to have a consistent method for identifying the relationship of projects to the strategic plan often results in
repeated negotiations for resources or other project commitments.
Create Project / Program level metrics tied to the Project Selection Process Even organizations that
use a rigorous project portfolio selection or balancing processes often fail to use the result of these processes to monitor the
implementation of the overall strategy. Project metrics that correlate to these criteria can streamline the monitoring of the strategy
implementation. This helps project managers speak the language of business and not just the language of project management.
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2012 SoftwareMatters.com, Inc.
Integrate strategic plan related project selection criteria and metrics into the
PPM system.
Create user defined fields used for every project/program in the portfolio
Implement audit process for strategic alignment fields and related measures
prior to every strategic planning sessions
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Automate the creation of reports at the project level that include the raw
data fed to dashboards and scorecards
Eliminate Excel as the basis for project selection or optimization (or implement
rigorously consistent, auditable methods)
Creating evaluation criteria with the preferred outcomes in mind
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