暨南大学《项目管理》chapter 2 organization strategy and project selction.ppt

管理学院 School of Management,佟瑞 Edward Tong， MPM，MBA,2019/7/1,1,Edward Tong2014 copy reserved Jinan University,Chapter 2,Organization strategy and project selection,2019/7/1,2,Edward Tong2014 copy reserved Jinan University,Where We Are Now,2019/7/1,Edward Tong2014 copy reserved Jinan University,3,Strategy and projects,Strategy is implemented through projects, Every project should have a clear link to the organizations strategy.,2019/7/1,Edward Tong2014 copy reserved Jinan University,4,A lot of funds, so many projects, but how to link to Alibabas strategy,Strategy, projects, and products or services,Organizations use projects to convert strategy into new products, services, and processes needed for success.,2019/7/1,Edward Tong2014 copy reserved Jinan University,5,Intels major strategy is one of differentiation, its projects target innovation and time to market.,Projects and project management play the key role in supporting strategic goals. It is vital for project managers to think and act strategically.,Why project managers need to understand strategy,Project management is at the apex of strategy and operations. It is time to expand the traditional role of project manger from an operational to a more strategic perspective.,2019/7/1,Edward Tong2014 copy reserved Jinan University,6,Why Project Managers Need to Understand the Strategic Management Process,Changes in the organizations mission and strategy Project managers must respond to changes with appropriate decisions about future projects and adjustments to current projects. Project managers who understand their organizations strategy can become effective advocates of projects aligned with the firms mission.,2019/7/1,Edward Tong2014 copy reserved Jinan University,7,Projects and Strategy,Mistakes caused by not understanding the role of projects in accomplishing strategy: Focusing on problems or solutions with low strategic priority. Focusing on the immediate customer rather than the whole market place and value chain. Overemphasizing technology that results in projects that pursue exotic technology that does not fit the strategy or customer need Trying to solve customer issues with a product or service rather than focusing on the 20% with 80% of the value (Paretos Law). Engaging in a never-ending search for perfection only the project team really cares about.,2019/7/1,Edward Tong2014 copy reserved Jinan University,8,The Strategic Management Process: An Overview,Strategic Management Requires every project to be clearly linked to strategy. Provides theme and focus of firms future direction. Responding to changes in the external environmentenvironmental scanning Allocating scarce resources of the firm to improve its competitive positioninternal responses to new programs Requires strong links among mission, goals, objectives, strategy, and implementation.,2019/7/1,Edward Tong2014 copy reserved Jinan University,9,Strategic Management Process Activities,Review and define the organizational mission. Set long-range goals and objectives. Analyze and formulate strategies to reach objectives. Implement strategies through projects,2019/7/1,Edward Tong2014 copy reserved Jinan University,10,Strategic Management Process,FIGURE 2.1,2019/7/1,Edward Tong2014 copy reserved Jinan University,11,Characteristics of Objectives,EXHIBIT 2.1,S Specific Be specific in targeting an objective M Measurable Establish a measurable indicator(s) of progress A Assignable Make the objective assignable to one person for completion R Realistic State what can realistically be done with available resources T Time related State when the objective can be achieved, that is, duration,2019/7/1,Edward Tong2014 copy reserved Jinan University,12,Scenario Planning: A Supplement to Traditional Strategic Planning,Clarifying your core business and assessing drivers of change in the industry environment,Developing potential scenarios and assessing the impact of STEEP factors,Developing potential contingency strategies and best future strategic options,Identifying early indicators and establishing triggers for strategic action,2019/7/1,Edward Tong2014 copy reserved Jinan University,13,Project Portfolio Management Problems,The Implementation Gap The lack of understanding and consensus on strategy among top management and middle-level (functional) managers who independently implement the strategy. Organization Politics Project selection is based on the persuasiveness and power of people advocating the projects. Resource Conflicts and Multitasking Multiproject environment creates interdependency relationships of shared resources which results in the starting, stopping, and restarting projects.,2019/7/1,Edward Tong2014 copy reserved Jinan University,14,Benefits of Project Portfolio Management,Builds discipline into the project selection process. Links project selection to strategic metrics. Prioritizes project proposals across a common set of criteria, rather than on politics or emotion. Allocates resources to projects that align with strategic direction. Balances risk across all projects. Justifies killing projects that do not support strategy. Improves communication and supports agreement on project goals.,EXHIBIT 2.2,2019/7/1,Edward Tong2014 copy reserved Jinan University,15,A Portfolio Management System,Design of a project portfolio system: Classification of a project Selection criteria depending upon classification Sources of proposals Evaluating proposals Managing the portfolio of projects.,2019/7/1,Edward Tong2014 copy reserved Jinan University,16,Portfolio of Projects by Type,FIGURE 2.2,2019/7/1,Edward Tong2014 copy reserved Jinan University,17,A Portfolio Management System,Selection Criteria Financial: payback, net present value (NPV), internal rate of return (IRR) Non-financial: projects of strategic importance to the firm. Multi-Weighted Scoring Models Use several weighted selection criteria to evaluate project proposals.,2019/7/1,Edward Tong2014 copy reserved Jinan University,18,Financial Models,The Payback Model Measures the time the project will take to recover the project investment. Uses more desirable shorter paybacks. Emphasizes cash flows, a key factor in business. Limitations of Payback: Ignores the time value of money. Assumes cash inflows for the investment period (and not beyond). Does not consider profitability.,2019/7/1,Edward Tong2014 copy reserved Jinan University,19,Financial Models (contd),The Net Present Value (NPV) model Uses managements minimum desired rate-of-return (discount rate) to compute the present value of all net cash inflows. Positive NPV: project meets minimum desired rate of return and is eligible for further consideration. Negative NPV: project is rejected.,2019/7/1,Edward Tong2014 copy reserved Jinan University,20,Example Comparing Two Projects Using Payback Method,EXHIBIT 2.3a,2019/7/1,Edward Tong2014 copy reserved Jinan University,21,Example Comparing Two Projects Using Net Present Value Method,EXHIBIT 2.3b,2019/7/1,Edward Tong2014 copy reserved Jinan University,22,Nonfinancial Strategic Criteria,To capture larger market share To make it difficult for competitors to enter the market To develop an enabler product, which by its introduction will increase sales in more profitable products To develop core technology that will be used in next-generation products To reduce dependency on unreliable suppliers To prevent government intervention and regulation,2019/7/1,Edward Tong2014 copy reserved Jinan University,23,Multi-Criteria Selection Models,Checklist Model Uses a list of questions to review potential projects and to determine their acceptance or rejection. Fails to answer the relative importance or value of a potential project and doesnt to allow for comparison with other potential projects. Multi-Weighted Scoring Model Uses several weighted qualitative and/or quantitative selection criteria to evaluate project proposals. Allows for comparison of projects with other potential projects,2019/7/1,Edward Tong2014 copy reserved Jinan University,24,Sample Selection Questions Used in Practice,EXHIBIT 2.4,2019/7/1,Edward Tong2014 copy reserved Jinan University,25,Sample Selection Questions Used in Practice,EXHIBIT 2.4 contd,2019/7/1,Edward Tong2014 copy reserved Jinan University,26,Project Screening Matrix,FIGURE 2.3,2019/7/1,Edward Tong2014 copy reserved Jinan University,27,Applying a Selection Model,Project Classification Deciding how well a strategic or operations project fits the organizations strategy. Selecting a Model Applying a weighted scoring model to bring projects to closer with the organizations strategic goals. Reduces the number of wasteful projects Helps identify proper goals for projects Helps everyone involved understand how and why a project is selected,2019/7/1,Edward Tong2014 copy reserved Jinan University,28,Project Proposals,Sources and Solicitation of Project Proposals Within the organization Request for proposal (RFP) from external sources (contractors and vendors) Ranking Proposals and Selection of Projects Prioritizing requires discipline, accountability, responsibility, constraints, reduced flexibility, and loss of power. Managing the Portfolio Senior management input The priority team (project office) responsibilities,2019/7/1,Edward Tong2014 copy reserved Jinan University,29,A Proposal Form for an Automatic vehicular tracking (AVL) Public Transportation Project,FIGURE 2.4A,2019/7/1,Edward Tong2014 copy reserved Jinan University,30,Risk Analysis for 500-Acre Wind Farm,FIGURE 2.4B,2019/7/1,Edward Tong2014 copy reserved Jinan University,31,Managing the Portfolio,Senior Management Input Provide guidance in selecting criteria that are aligned with the organizations goals Decide how to balance available resources among current projects The Priority Team Responsibilities Publish the priority of every project Ensure that the project selection process is open and free of power politics. Reassess the organizations goals and priorities Evaluate the progress of current projects,2019/7/1,Edward Tong2014 copy reserved Jinan University,32,Project Screening Process,FIGURE 2.5,2019/7/1,Edward Tong2014 copy reserved Jinan University,33,Priority Analysis,FIGURE 2.6,2019/7/1,Edward Tong2014 copy reserved Jinan University,34,Project Portfolio Matrix,FIGURE 2.7,2019/7/1,Edward Tong2014 copy reserved Jinan University,35,Project Portfolio Matrix Dimensions,Bread-and-butter Projects Involve evolutionary improvements to current products and services. Pearls Represent revolutionary commercial opportunities using proven technical advances. Oysters Involve technological breakthroughs with high commercial payoffs. White Elephants Showed promise at one time but are no longer viable.,2019/7/1,Edward Tong2014 copy reserved Jinan University,36,Key Terms,Implementation gap Net present value Organizational politics Payback Priority system Priority team Project portfolio Project screening matrix Project sponsor Sacred cow Strategic management process,2019/7/1,Edward Tong2014 copy reserved Jinan University,37,2019/7/1,Edward Tong2014 copy reserved Jinan University,38,1,Which of the follow is not one of the commonly heard comments of project managers? d A. Where did this project come from? B. Why are we doing this project? C. How can all these projects be first priority? D. Why is this project so strongly linked to the strategic plan? E. Where are we going to get the resources to do this project?,2019/7/1,Edward Tong2014 copy reserved Jinan University,39,2,Strategy considered to be under purview of senior management is a A. Old school thinking B. A new school of management thought C. Necessary in a company structure D. Beneficial to the Project Manager E. Depended on company goals,2019/7/1,Edward Tong2014 copy reserved Jinan University,40,3,A critical factor to ensure the success of integrating the strategic plan with projects lies in a process that a A. Is open and published for all participants to review B. Starts with top management's directives C. With projects first and integrates them with the strategic plan D. Both B and C are correct E. A, B, and C are all correct,2019/7/1,Edward Tong2014 copy reserved Jinan University,41,4,The intended outcome of strategy/projects integration is e A. Clear organization focus B. Best use of scare organization resources C. Improved communication across projects and departments D. Both A and C are correct E. A, B, and C are all correct,5,2019/7/1,Edward Tong2014 copy reserved Jinan University,42,Which of the following is a main reason why project managers need to understand their organization's mission and strategy? d A. They can better focus on the immediate customer B. They can make appropriate decisions and adjustments C. So they can be effective project advocates D. Both B and C are correct E. A, B, and C are all correct,6,2019/7/1,Edward Tong2014 copy reserved Jinan University,43,Project managers who do not understand the role that their project plays in accomplishing the organization's strategy tend to make all the following mistakes except: e A. Focusing on low priority problems B. Overemphasizing technology as an end in and of itself C. Focusing on the immediate customer D. Trying to solve every customer issue E. All the above are likely mistakes,7,2019/7/1,Edward Tong2014 copy reserved Jinan University,44,In today's business environment, project managers find it valuable to have a keen understanding of d A. Strategic management B. Technical issues C. Project selection process D. Both A and C are correct E. A, B, and C are all correct,8,2019/7/1,Edward Tong2014 copy reserved Jinan University,45,The textbook indicated that _ is the major dimension of strategic management. d A. Responding to changes in the external market B. Allocating scarce resources of the organization C. Beating competition to the market D. Both a and b are correct E. Both a and c are correct,9,2019/7/1,Edward Tong2014 copy reserved Jinan University,46,Which of the following is not true for strategic management? a A. It should be done once each year just before developing the operating plan B. It supports consistency of action at every level of the organization C. It develops an integrated and coordinated long-term plan of action D. It positions the firm to meet the needs of its customers E. All of these are true statements,10,2019/7/1,Edward Tong2014 copy reserved Jinan University,47,Which of the following is the correct order for the strategic management process? c A. Strategies, mission, goals, projects B. Goals, projects, mission, strategies C. Mission, goals, strategies, projects D. Goals, mission, strategies, projects E. Projects, mission, strategies, goals,11,2019/7/1,Edward Tong2014 copy reserved Jinan University,48,Which of the following questions does the organization's mission statement answer? d A. What are our long-term strategie