Use Organization Strategy to Drive Project Portfolio Management
Business or organizational strategy is intended to drive all decisions within an organization. It provides a direction, a rallying point, and a litmus test for decisions at all levels. Hence, it only stands to reason that strategy would drive the projects, programs, and the project portfolio management process. Good projects map well to organizational goals. In fact, the best organizations make sure their initiatives are in alignment with their strategic plan. Whether for project initiation or for simply evaluating how the value of a project fits within the organization, becoming familiar with the strategic plan is invaluable.
Here is some background on strategic planning, project management, program management, and project portfolio management.
There are many approaches to strategic planning. One approach is to think through these 5 points for the organization:
1. Vision - where the organization wants to be in the future
2. Mission - purpose, or why the organization exists
3. Values - organization's culture and priorities
4. Goals - results that the organization desires in carrying out its mission 5. Tactics and Initiatives - actionable behaviors and initiatives supporting all above
It is important for project managers to understand where their project fits into the organizational strategy. What organizational goals does it support? Does it support the organization's vision and mission? How are the organization's values being expressed in the execution of the project?
It is equally important for a program manager, with responsibility for an initiative, or program, which involves several projects, to understand how the program supports the organizational strategy. The program manager needs to make sure the individual projects align to organization strategy, and that the project set as a whole that make up the program support that vision.
Project Portfolio Management is concerned with selecting the projects that best support the organization's vision and strategy. PPM works with a list of candidate projects and assembles critical data on each, such as cost, resources, purpose or objective, expected return, risks, and more. With a formal strategy in hand, assuming there is one, the PPM process involves mapping the products to the various elements of the strategy. One of the keys with such data is to be realistic by checking assumptions versus actual on projects and programs in the portfolio over time. Establishing the appropriate parameters for this data is important to accomplishing the desired results.
What the PMI Says About Portfolio Management
"The Standard for Portfolio Management" published by the Project Management Institute (PMI) states that in order to be successful, the portfolio management team must:
1. Understand the organization's strategic plan.
2. Establish determining factors for managing the portfolio based on the strategic plan.
3. Consider all of the organization's projects, programs, and other portfolio components.
4. Follow agreed-upon processes.
The standard clearly articulates the importance of the relationship between strategy and project portfolio management!