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Project Manager : Project Manager Apr May 2013
36 Project Manager THE OFFICE Fall in line? Aligning project benefits to organisational strategy often informs how projects are prioritised. But it is not the only factor that deserves attention. "YOUR IDEA FOR DEVELOPING A THREE legged, semicircular network storage area sounds really groovy, but how does it align to our strategy?" e past few years have witnessed greater uptake of Project Portfolio Management (PPM) across Australia, but it is not yet understood or embraced by many medium-to-large organisations in a formal sense. More recently, there has been signi cant discussion about how to align projects with organisational strategy or to prioritise projects that have greater alignment with organisational strategy. But how important is this? Consider the desired outcome of applying a PPM process or system. A PPM process should provide a balanced selection of projects prioritised in order of greatest to least value, where value is the incremental bene t the organisation expects to receive in return for doing the project. If this premise is accepted, what is meant by value? ere are a range of factors that can contribute to value, including: • Financial: is plays a crucial role in determining value, regardless of whether internal rate of return, return on investment, net present value or other means are used to determine and compare the predicted nancial bene t of project spend. • Risk: What chance is there of the predicted bene t being unobtainable? • Customer growth and retention: What is the value to the organisation of growth and/ or retention? • Brand and reputation: To what extent will this project enhance or impact our brand? • Sta satisfaction and engagement: Will the project enhance or impact sta satisfaction? Also consider whether engagement in the project can be developed. • Enablement: Does it enable capabilities beyond those sought by this speci c project? CHRIS DWYER Chris Dwyer is a Senior Consultant and Director of Core Consulting Group, and holds a Masters in Project Management. He has specialised in SharePoint- based PPM solution implementations, with a focus on the marriage between process, people and toolset. • Statutory: Does the project meet statutory requirements and/or avoid the e ects of non- compliance? Is the value simply the avoidance of the applicable ne? e challenge is in how we rate each factor and assign its weight in our overall determination of value. How important is nancial return compared to reputation? How do we put a value on enablement when we have no idea if a future initiative will make use of the capability we have enabled? It is worth noting that many strategic statements include elements from the above list. So, is determining value also determining the degree of alignment with the organisation's strategy? Regardless, value rather than alignment should be the focus. Achieving balance Balance refers to having a range of project types and sizes, much the same as a balanced investment portfolio to ensure diversi cation. It also relates to balancing the overall portfolio with organisational capacity. Most organisations have constraints that limit the amount of concurrent work or investment they can achieve including: • Human resources: How many projects can we work on concurrently given our existing capacity and the additional capacity we can draw on within our timeframes? • Physical resources: Available physical o ce space, desks and computers are all constraints that need to be considered. • Cash ow: How much cash can the organisation a ord to spend in a given period? • Window of opportunity: Is the window of opportunity for realising the predicted bene ts large or small? How crucial is the timing of delivery? • Risk: How much risk is the organisation prepared to accept at a given point in time?
Project Manager Feb Mar 2013
Project Manager June July 2013