Every business works towards meeting a set of objectives.
But how do you create a project mix to achieve these objectives? How do you prioritize resources between these projects? And how do you ensure that you stay on track?
Strategic Project Management can help you answer these questions.
In this article, you’ll learn:
- What is Strategic Project Management?
- Strategic Project Management Example
- Strategic Project Management Benefits
- Strategic Project Management Vs. Project Management
- How to Align Projects with Business Strategy?
Ready to get started? Let’s dive in.
What is Strategic Project Management?
Strategic Project Management (SPM) involves planning, prioritizing, and executing projects to achieve business objectives.
It has been around since 2006. However, it’s only recently that businesses have recognized the need for it.
SPM creates a direct link between business objectives and everyday work. As a result, businesses that manage projects strategically can meet their business goals more efficiently. Studies found that with strategic management, 38% more projects meet business intent, and 33% fewer projects fail.
While project management is about executing individual projects, SPM is about executing the right projects.
It isn’t sufficient to focus only on big or important projects. Instead, SPM involves creating and managing a portfolio of projects that support business strategy.
The three functions of SPM are:
- Create a project portfolio to support business objectives.
- Allocate appropriate resources based on strategic priorities.
- Adjust business strategy and project timelines as things change.
Next, let’s look at an example of SPM in action to understand it better.
Going Remote: A Strategic Project Management Example
According to Mailchimp’s Agency Benchmark Report for 2021, 23% of agencies went remote in 2020. Primarily because of COVID-19.
This transition needed a massive effort. Many teams were required to coordinate and work together to avoid work disruption. While each team worked on their projects, each project was aligned with the common business objective of ensuring a smooth transition.
Appropriate resources were allocated to make this transition. HR, operations, IT teams had to work overnight to put the policies, processes, and infrastructure in place. Finance teams had to carve out a budget for work-from-home equipment.
Some teams had gone remote temporarily. But as the pandemic stretched out, they had to adjust the timelines for remote work projects.
Others discovered that remote work allowed them to hire from the global talent pool. They could hire more skilled people at a lower cost. As a result, they reworked their business objectives to match this new bandwidth.
It’s fair to say that not all businesses could have “knowingly practiced” SPM during the remote transition. But those that did, realized the benefits that strategic project execution offers.
Strategic Project Management Benefits
When teams implement SPM deliberately, they realize the following benefits:
- Improves business focus: When everyday work is aligned with business objectives, everyone in the organization is focused in one direction. This also helps managers prioritize project tasks.
- Improves business efficiency: Businesses that implement strategic PM see 38% more projects meet business objectives and 33% fewer failed projects.
- Simplifies decision-making: Running a business is mostly about managing priorities. When every project is aligned with business goals, it’s easy to prioritize projects and resources.
- Improves business visibility: Risks and opportunities spotted during project execution mean you can review your business goals as things change instead of waiting for the annual review.
- Better budget allocation: With SPM, budgets are allocated based on how important an objective is to the business. Projects that support an objective are then prioritized and get funds accordingly.
Strategic Project Management Vs. Project Management
There’s a significant overlap between traditional project management and strategic project management. With SPM, you’re looking at project management at an organizational level. And your goal is to meet business objectives.
On the other hand, project management is a team-level activity. And the goal is to deliver the project’s outcomes.
While SPM looks into the future development of a business, project management is only for the project’s duration.
What projects are undertaken and how they are prioritized depends on the business strategy. At the same time, strategy is affected by project success and failure.
How to Align Projects with Business Strategy?
Projects are where resources are used, and things get done. When projects support business objectives, progress happens. So how do you align your projects and business strategy?
Create a project mix to support business objectives
First, the top management needs to decide the must-meet business objectives for a defined period of time. This period could be anything from a year to five years.
Once the business objectives are frozen, the next step is to link projects to these business objectives.
- Link every objective to at least one project. If an objective has no projects, no work will happen to meet the objective. Redesign your project portfolio to include projects that’ll support the objective. Also, to support some objectives, you may need multiple projects.
- Prioritize projects that support an objective. If a project does not help in meeting business goals, it’ll eat into the resources without delivering strategic results. Remove such projects from your portfolio.
- Avoid overlapping projects. You don’t want projects that overlap two or more objectives. Such projects result in duplication of efforts and more time needs to be spent coordinating priorities.
Allocate resources based on strategic priorities
Resources are always scarce. People and budgets are never enough for every project. Plus, in some cases, multiple projects may compete for the same resources.
Let your strategic priorities guide resource allocation.
- Prioritize objectives over projects. Higher priority objectives get the first share of resources. Instead of deciding between projects, prioritize objectives and allocate resources to higher priority objectives.
- Get early project estimates. Before including a project into your portfolio, ensure that you have at least a high-level project roadmap with estimates of the time, money, and skills needed.
- Track resource availability. People go on vacations. And machines go down for maintenance. Keeping track of resource availability helps you prevent last-minute surprises and workplace conflicts.
Adjust business strategy and project timelines
People change jobs. Projects schedules get thrown off. Business priorities change. Like it or not, change happens. You don’t want to get caught off guard when change strikes.
Frequently review your project and strategy alignment to stay on track.
- Stay on top of SPM progress. Business strategy is an annual exercise. However, actual work happens in projects. So project teams can spot risks and opportunities early. That’s why it’s critical to review project-objective alignment periodically. You don’t have to go crazy. Just add an agenda item to your weekly project meeting to review alignment.
- Adjust project timelines to meet objectives. Strategic projects cannot support business objectives if they aren’t completed on time. If business priorities change, you must be ready to adjust your project timeline and resource allocation to accomplish the changing goals.
First, we learned what Strategic Project Management is and its benefits. Second, we looked at how SPM is different from project management. And finally, we saw how to align your project mix with your business objectives.
Project management software can help you implement SPM by giving you visibility across all the projects in your organization.
Check out our list of top project management tools.