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A Theoretical Framework for Aligning Project Management with Business Strategy

by Travis K. Anderson, MBA, PMP

In the previous article, “Moving from Corporate Strategy to Project Strategy”, Morris and Jamison expand on the idea of moving strategy from the corporate level to the project level. The next review analyzes an article authored by Milosevic and Srivannaboon who support this movement of strategy through their framework for alignment between these levels.

Business strategy is summarized as a means of creating competitive advantages to achieve sustainability while attracting customers and defending against competitive forces. A generic business strategy typology developed by Porter is used to establish the foundation for evaluating the alignment between project management and business strategy. Porter’s generic strategies are cost leadership, differentiation, and focus. Porter proclaims that firms can achieve a competitive advantage by choosing one of these strategies. However, firms are compelled to focus on a combination of strategies in reaction to global competition. This is termed as the best-cost strategy. Milosevic and Srivannaboon use cost leadership, differentiation, and best cost as the primary business strategies of the analysis. The authors also point to Shenhar’s strategic project leadership framework elements which consist of strategy, organization, process, tools, metrics, and culture.

The authors infer that the competitive attributes of the business strategy drive the focus and content of the project management elements. A pattern revealed through research indicates that organizations can align projects with business strategies into three levels: the strategic, the tactical, and the corrective emergent strategic feedback. Level 1 (the mediating process at the strategic level) is the beginning of the alignment process. At this level strategic managers derive the intended strategy and typically used portfolio management to determine the right projects that would contribute to the organization’s goals. Level 2 (the mediating process at the project level) involves delineating additional detail for the projects selected during Level 1 interactions as a means to ensure proper alignment with the project life cycle. The project life cycle is classified as the planning process and the monitoring process. At this level project managers develop a project management plan that ties back to the business goals and objectives. Level 3 (the mediating process at the emergent strategic feedback level) uses stage gates or milestone reviews to evaluate the project status on scope, schedule, and budget. As the project is executed, emergent actions occur that may change the intended strategy. This level ensures feedback from the project level as a means to allow the business strategy to adapt to its competitive attributes brought on by change. The authors therefore conclude that a combination of intended and emergent strategies is needed to align project management and business strategy.

One can infer that once strategic managers have selected a business strategy with the intention of sustaining the organization that portfolio management can assist in the decision making efforts of selecting the right projects that will contribute to the organizational needs. Also, a standard project lifecycle is needed for aligning the business strategy and the project management elements. Projects organized into portfolios that utilize best practices, common methodologies, and continuous improvement will determine the success of implementing the business strategy. The feedback loop, i.e. stage gates, will make sure that resources are funneled appropriately and non-performing projects are terminated efficiently and effectively. Emergent strategy often occurs as change on projects is inevitable. The strategic feedback provided from the project to the strategic business unit is critical for adapting the strategy transpiring through the mediating processes. Initially aligning the business strategy to the project is one thing, closing the gap between projects and strategy is a whole other story.

References

Milosevic, D., & Srivannaboon, S. (2006, August). A theoretical framework for aligning project

management with business strategy. Project Management Journal, 37(3), 98-110.

Retrieved October 12, 2008, from EBSCO MegaFILE database.

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Phindile February 6, 2012 at 7:49 am

Conducting research on Strategic and Operational Allignment of ICT Projects
Your support will be appreciated.

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