02 Intro Aligning Projects with Business Strategy_VE_V1.0

Introduction to Project Management

• Course Code: CT050-3-3-PRMGT

• Focus: Aligning projects with business strategy

• Topic 02: Introduction – Aligning Projects with Business Strategy

Learning Outcomes

At the end of this topic, you should be able to:

1. Describe the importance of aligning projects with business strategy, the strategic planning process, and using a SWOT analysis.

2. Explain two different approaches to the project planning process—a four-stage traditional approach and an agile approach.

3. Summarize various methods for selecting projects and demonstrate how to calculate net present value, return on investment, payback, and the weighted score for a project.

4. Discuss the program selection process and distinguish the differences between programs and projects.

5. Describe the project portfolio selection process and the five levels of project portfolio management.

Recap from Last Lesson

• Key topics covered included:

  • Definition of projects, programs, and portfolios.

  • Attributes of a project.

  • Project constraints.

  • Fundamentals of Project Management and PMBOK Framework.

  • Identification of Project Stakeholders.

  • Skills required for Project Managers, Program Managers, and Portfolio Managers.

Key Terms

Familiarity with the following terms is essential for assignments and exams:

• Business strategy

• Project selection

Aligning Projects with Business Strategy

• Organizations often face resource limitations, restricting project undertakings.

• The overall business strategy of an organization guides the project selection and management processes.

SWOT Analysis

• A SWOT analysis assesses Strengths, Weaknesses, Opportunities, and Threats.

• It aids in identifying potential projects through systematic evaluation.

Sample SWOT Analysis

• Strengths:

  • Financial strength, unique advocacy programs, high patient safety standards, expert reputation.

• Weaknesses:

  • Declining revenues and patient dissatisfaction, slow adaptation to managed care.

• Opportunities:

  • Increased funding for biomedical research, potential growth in market share.

• Threats:

  • Economic uncertainties, Medicaid reimbursement challenges, and healthcare competition.

Mind Map of SWOT Analysis

• Visual representation using MindView to identify potential projects based on SWOT outcomes.

Traditional and Agile Approaches to Project Planning

• Many organizations utilize a traditional approach, typically structured in four stages.

• Agile approach:

  • Offers flexibility, allowing teams to adapt based on feedback, focusing on value delivery rather than strict planning.

Methods for Selecting Projects

• Analyze competitive strategies and organizational needs.

• Conduct financial analysis including

  • Net Present Value (NPV)

  • Return on Investment (ROI)

  • Payback analysis.

Financial Projections

• Net Present Value (NPV):

  • Indicates expected monetary gain/loss through discounted cash flow analysis.

  • Preferred projects have higher NPVs relative to others.

• Return on Investment (ROI):

  • Calculated as (Benefits - Costs) / Costs; expressed as a percentage.

  • A higher ROI indicates a better investment.

• Payback Period:

  • Time taken to recover total project investment via net cash inflows.

  • Shorter payback periods are preferable.

Weighted Scoring Models

• Tools for systematic project selection based on criteria importance.

  • Weight allocation overall should sum to 100%.

  • Calculate weighted scores for informed decision-making.

Balanced Scorecard Implementation

• Developed by Dr. Kaplan and Dr. Norton, linking project selection to organizational strategic metrics such as customer service and operational efficiency.

  • Emphasis on converting value drivers into measurable metrics.

Project Time Frame and Priority

• Projects must align with time constraints dictated by the business environment.

  • Prioritization (high, medium, low) helps focus strategic resources.

Program Selection

• Combining related projects within programs can unlock benefits that cannot be achieved individually.

Project Portfolio Selection

• Focuses on enterprise success, which may require reallocating resources or canceling projects for improved outcomes overall.

Approaches to Creating Project Portfolios

• Proper categorization and prioritization improve manageability and align with strategic goals.

Quick Review Questions

1. Explain the importance of project alignment with business strategy and the strategic planning process.

2. Differentiate between traditional and agile approaches to project planning.

3. Summarize the methods for project selection.

4. Discuss the differences between programs and projects.

5. Articulate the project portfolio selection process and its five levels.

Summary of Key Points

• Aligning projects with business strategy is essential for effective management.

• Project selection can follow various methods, including financial analysis and comprehensive scoring models.

• The program selection process should emphasize coordination among related projects for enhanced benefits.

• A robust project portfolio management system aids in maximizing organizational success.

Preparation for Class

• Next class will cover Project Management Process Groups, Methodologies, and the significance of stakeholder identification and project initiation.