A Theoretical Framework to Align Project Management and Business Strategy
Morris and Jamison discuss the idea of shifting strategy from the corporate level up to the project level in their previous article, “Moving From Corporate Strategy to Project Strategy”. This review examines an article written by Srivannaboon and Milosevic, who support this movement in strategy through their framework of alignment between these levels.
Business strategy can be described as the creation of competitive advantages that will allow you to attract customers and defend against competition. Porter’s generic business strategy typology is used to help evaluate the alignment between project management, business strategy, and project management. Porter’s three generic strategies are focus, differentiation, cost leadership and cost leadership. Porter claims that firms can gain a competitive edge by choosing one of these strategies. In response to global competition, however, companies are forced to choose a combination of strategies. This is called the best-cost strategy. Srivannaboon and Milosevic use cost leadership, differentiation and best cost as their primary business strategies. The authors also refer to Shenhar’s strategic project leadership framework elements, which include strategy, organization, processes, tools, metrics and culture.
According to the authors, the competitive attributes of a business strategy determine the content and focus of project management elements. Research has shown that organizations can align projects with their business strategies at three levels. These are the tactical, strategic, and corrective emergent strategy feedback. The first stage of the alignment process is Level 1. This is the mediating process at strategic level. This level is where strategic managers determine the strategy and use portfolio management to identify the right projects that will contribute to the organization’s goals. Level 2 (the mediating process at project level) involves defining additional details for projects selected during Level 1 interactions to ensure that they are in line with the project’s life cycle. The planning and monitoring phases of the project life cycle are classified. Project managers at this level create a project management plan that is tied back to the business goals. Level 3 (the mediating stage at the emergent strategy feedback level) uses milestone reviews or stage gates to evaluate the project’s status on scope, schedule and budget. Emergent actions may occur during the project’s execution that could change the strategy. This level provides feedback to the project level to enable the business strategy to adapt and change to meet changing market conditions. According to the authors, a combination of emergent and planned strategies is necessary to align project management with business strategy.
Portfolio management can be used to assist in the selection of the right projects for the organization. A standard project lifecycle is required to align the business strategy with the project management elements. The success of implementing the business strategies will depend on how well projects are organized into portfolios that use best practices, common methods, and continuous improvement. The feedback loop, also known as. The feedback loop, i.e. stage gates, will ensure that resources are directed appropriately and that non-performing projects can be terminated efficiently. Emergent strategy is often a result of project change. For the successful adaptation of the strategy through the mediation processes, it is crucial to get strategic feedback from the project to strategic business units. I