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Russell D. ArchibaldPhD (Hon), MSc, Fellow P MI , Honorary Fellow APM / IPM A, PMP
Archiba ld Associates
The Interfaces Between
Strategic Management of an Enterprise
andProject Portfolio Management Within the Enterprise
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Presentation Outline1. Strategic Growth
Management
2. Project PortfolioManagement/PPM
3. Interfaces Between StrategicManagement & PPM
4. Conclusions
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1. Strategic Growth Management Well-managed enterprises today utilize integrated
strategic growth management processesto define,approve and control their current and future growth plans
and the actions principally the execution of portfolios of
programs and projects -- needed to achieve their agreed
strategic objectives.
Strategic management is the art and science offormulating, implementing and evaluating cross-functional
decisions that will enable an organization to achieve its
objectives (Strategic Management Wikipedia 2010.).
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The Strategic Growth Management Process
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Who Is Responsible for StrategicManagement Plans, Decisions &
Processes? Presidents, Secretaries General, Ministers,
Chief Executive Officers/CEOs
Other Senior Corporate Executives
Directors & Managers of subsidiary business units,
major operating departments, product lines and
geographic units-- These are the Strategy Managers of the
organization does not usually includeProject Managers or Strategic Planners.
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Defining Project Categories Project Categories
Many principles of PM apply to all projects
But One Size Project Life Cycle System does not fit all!
Projects are categorized in different ways for
different purposes Strategically: Market share, strategic intent
Operationally: ) end product, or
Educationally and training: ) industry, or Career development: ) technology
Two basic project types: STRATEGIC DEVELOPMENT
and COMMERCIAL DELIVERY projects
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Project Categories Based on End Results1.Aerospace/Defense
2.Business &
OrganizationalChange
3.Communication
Systems
4.Events
5.Facilities
6.Information
Systems/IT
7.InternationalDevelopment
8.Media &
Entertainment
9.Product/Service
Development
10. Research & Dev.
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Commercial Delivery Projects Many organizations create and deliver CommercialDelivery Projects as an on-going part of theirestablished business. These are obviously DELIVERYprojects, not STRATEGIC DEVELOPMENT projects.
These delivery projects produce and deliver undercontract well-known results or products with littleor no innovation that fit well-known and well-established strategic objectives of the organizations.
Such commercial projects may be completely
managed as a single Commercial Project Portfolio bya Project Management Office with responsibility forall six of the Strategic PM processes unlike allother strategic development projects as discussed inthe remainder of this presentation.
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Defining Strategic DevelopmentProjectPortfolios
PMIs Standard for Portfolio Management recommends one
portfolio for an organization with sub-portfolios if needed
A more practical approach:
Per Combe & Givens (1999):
Value-creating: Strategic or enterprise projects
Operational: Projects that make the organizational more efficient
Compliance: Must-do projects required to maintain regulatorycompliance
Other portfolio possibilities:
New product (or service), product line extension, IT or ICT, capital
facilities, major facilities maintenance, R & D, other
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Project Portfolio Management Project Portfolio Management is
fundamentally the integration of thestrategic project management processes with
the operational project managementprocesses
Project Portfolio Management provides thebridge between these two aspects of project
management But who holds responsibility for
STRATEGICALLY managing projectportfolios?
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3. Interfaces Between Strategic & ProjectPortfolio Management
The Five Phases of the StrategicGrowth Management Process
1. Describe 2. Conclude 3. Commit
4. Create Action Plans (Projects) and
5. Integrate With Operations:
Using the Six Strategic ProjectManagement Processes:
1. Select and approve new projects andprograms
2. Validate each new project andprogram
3. Prioritize all validated projects andprograms within portfolios
4. Allocate key resources to eachportfolio and each project andprogram
5. Establish the masterschedule for each projectportfolio - (PMO responsibility)
6. Cancel or change the scopewhen such actions are requiredor justified.
Then manage each project andprogram using allappropriate OperationalProject Managementprocesses and tools.
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The PPM Evaluation Cycle Report progress on each project and program
within each portfolio as specified by the
organizations PM procedures
Portfolio Level Review Criteria:
How often?
Comparative evaluation of projects?
What criteria are used to re-prioritize, re-allocate
resources, change scope or kill projects?
Who makes the strategic decisions?
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Managing the Project PortfolioManagement Processes
The PPM Process usually operates on a quarterly, semi-annual, or annual
cycle, at least in concert with an annual strategic review and revision cycle
for the entire organization. The STRATEGY MANAGERS are responsible for overall management of the
PPM process for Strategic Development projects AND the related strategic
decisions.
The appropriate PMO should be responsible for Strategic PM process No. 5,
Establish the master schedule for each project portfolio. Strategy Managers
must approve this Master Schedule.
PMOs may facilitate operation of the PPM process but the resulting
strategic decisions are the responsibility of the strategy managers and not
individual program or project managers except for Commercial project
portfolios.
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Defining Responsibilities ofKey People
For each of the 5 Strategic Management Phases,
each of the 6 Strategic Project Management Phases,and for each project portfolio:
Identify key:
Strategy Managers
Strategic Planners
PMO Managers Program and Project Managers
Define their responsibilities
See example Responsibility Assignment Matrix in the paper
(also the 14 references given there)
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4. Conclusions1. The Strategy Managers within an organization are responsible for 1) creating and
executing the growth strategies for the organization, 2) project selection,prioritization, and provision of funds and other resources for their execution, and3) strategic direction of all project portfolios required to achieve the approvedstrategic objectives.
2. Five of the six identified strategic project management processes are theresponsibility of the organizations Strategic Managers and not its project orprogram managers. The one strategic PM process that is the responsibility of thePM experts but with the final approval of the Strategy Managers is to establish theMaster Schedule for each Project Portfolio.
3. Project management knowledge, experience, and expertise are usually developedand retained within an appropriate number of Project Management Offices/PMOs,depending on the size and complexity of the organization and also on the projectand program categories that exist within the organization.
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Thanks for your attention!To download my references in this paper
Go towww.russarchibald.com
Then
And scroll down to the title and date
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