Companies need to work very hard to survive in the fierce business world. Every day, they look at their competitors to understand future trends and take action beforehand. They constantly try to innovate by taking into account their budgets and the risks of their actions. At the same time, market conditions change fast, so companies need to adapt accordingly to stay one step ahead of the competition. To reach their goals, organizations need to analyze the market and define effective strategies.
Companies can use project portfolio management to implement organizational strategies. In fact, Project Portfolio Management helps companies select the most valuable projects according to their strategic objectives. To be as effective as possible and reach their objectives, companies need to connect organizational strategies to their projects and programs.
Organizational strategy
It is important to understand the meaning of the term strategy in order to understand corporate functions. The word ‘strategy’ comes from the ancient Greek word ‘strategos,’ which means ‘the art of the general.’ The term “strategic” was used in the military field, and it was about defining a plan to win battles and defeat enemies.
Strategies in business are more about understanding the competition and preparing a plan to beat market rivals. In general, strategy can be seen as the direction of an organization over the long term. In fact, the right strategies can help companies that operate in challenging environments achieve several advantages and, most importantly, fulfill the needs of customers.
Organizational strategy consists of several decisions that make a company’s goals and objectives attainable. In addition, each plan can include connected projects. These related or unrelated projects can be used to create one or more project portfolios. To implement their strategies, companies need to select the most valuable projects and programs according to their strategic objectives. When companies choose programs and projects, they should consider all the risks from the organizational and project levels.
Project Portfolio Management (PPM)
Initially, financial investors who intended to buy stocks used the concept of a portfolio. To create a portfolio of investments, investors must analyze all assets, investments, and debts. Afterward, they need to define their short-term and long-term financial goals. To create a risk-return profile, they must decide the degree of risk and volatility they are willing to take and the type of returns they want to produce.
Project Portfolio Management (PPM) can help implement organizational strategies. Companies that want to reach their goals and stay ahead of the competition need to connect organizational strategy to projects and programs. They start by declaring their vision and mission and then defining their strategic objectives accordingly. Projects and programs represent the outputs of the strategic goals.
Successful organizations constantly use project portfolios to implement their strategies. Several projects can also be shared using different strategies. PPM helps create balanced portfolios regarding risk, project type, business unit, etc. Once projects have been ranked within portfolios, they can be selected.
Many aspects should be taken into consideration while creating a new project portfolio, such as maximizing the benefits delivered to stakeholders, creating a perfect balance in terms of duration, risk, market, technology, product, and project type, and finally, meeting the strategic objectives of the organization (Cooper). In addition, to select the projects that best align with strategic goals to form the portfolios, it is essential to consider restrictions on budget and other resources in organizations. Cooper states that strategic objectives are achieved by deciding the funding allocated in different portfolio hierarchies.
Keep in mind
Companies must work very hard to survive in the competitive business world. To reach their goals, organizations need to define effective strategies. To implement organizational strategies, companies can use Project Portfolio Management (PPM). PPM helps companies create balanced portfolios in terms of duration, risk, market, technology, product, and project type.
Tip:
Remember also to leverage the power of project management software like Wrike, Monday.com, Teamwork, Microsoft Project, Asana, and Trello to provide a centralized platform for managing tasks, timelines, and resources. They enable project managers to create schedules, assign tasks, track progress, and collaborate with team members.
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