Strategic Planning and Project Management PDF

Strategic Planning and Project Management Information Technology Infrastructure Aryo Pinandito, ST, M.MT, Ph.D. Learning Outcomes Understand the fundamentals of strategic planning, the approaches in strategic planning, and the models that support organization plan Understand the theory unde...

Strategic Planning and Project Management Information Technology Infrastructure Aryo Pinandito, ST, M.MT, Ph.D. Learning Outcomes Understand the fundamentals of strategic planning, the approaches in strategic planning, and the models that support organization plan Understand the theory underlying a project that consistent with business strategies along with its five highly interrelated parameters that define a project Understand the fundamentals of project management and 9 project management knowledge areas Strategic Planning What is Strategic Planning? Strategic planning is a process that helps managers identify desired outcomes and formulate feasible plans to achieve organizations objectives by using available resources and capabilities. The strategic plan must take into account that the organization and everything around it is changing: consumers’ likes and dislikes; competitors leave and new ones enter the marketplace; the costs and availability of raw materials and labor; fundamental economic environment (interest rates, growth in gross domestic product, inflation rates); industry and government regulation changes. Strategic Planning Approach Issues-based, Organic-based, and Goals based Strategic Planning Approach (2) Issues-based strategic planning: A strategic planning process that begins by identifying and analyzing key issues that face the organization, setting strategies to address those issues, and identifying projects and initiatives that are consistent with those strategies. Organic strategic planning: A strategic planning process that defines the organization’s vision and values and then identifies projects and initiatives to achieve the vision while adhering to the values. Strategic Planning Approach (3) Goal-based strategic planning: A multiphase strategic planning; begins by performing a situation analysis to identify an organization’s strengths, weaknesses, opportunities, and threats. Sets direction for the organization by defining its mission, vision, values, objectives, and goals. Define strategies to enable the organization to fulfill its mission. Initiatives, programs, and projects are identified and executed to meet the objectives and goals. Goal-based Strategic Planning These efforts are evaluated to ensure that they remain on track toward achieving the organization goals. Michael Porter’s Five Forces Model Michael Porter’s Five Forces Model New competitors will raise the level of competition Substitute products can lower the profitability of industry competitors. The bargaining power of buyers determines prices and long-term profitability. The bargaining power of suppliers can significantly affect the industry’s profitability. The degree of rivalry between competitors is high in industries with many equally sized competitors or little differentiation between products. SWOT Analysis The analysis of an organization’s internal assessment and study of its external environment is summarized into a Strengths, Weaknesses, Opportunities, Threats (SWOT) matrix A simple way to illustrate what a company is doing well, where it can improve, what opportunities are available, and what environmental factors threaten the future of the organization.  SWOT Analysis for Starbucks Strengths Weaknesses Strong revenue and profit growth Uneven international Rapid increase in global store count growth Strong comparable store sales growth Investing lots of money on expansion Opportunities Threats Rising incomes in China should fuel Unstable price of coffee higher demand for “premium” Western beans products such as Starbucks Rising competition Top premium coffee brand in the K-Cup (e.g., Dunkin’ Donuts and category, presenting a growth Tim Hortons) opportunity Experimenting with various concept stores, including tea bars and wine bars Set Direction The direction-setting phase of strategic planning involves defining the mission, vision, values, objectives, and goals of the organization. The strategic planning pyramid is a top-down approach to identify initiatives, program, and projects. Strategic Planning Pyramid: Vision, Mission, Value Vision/mission statement: A statement that communicates an organization’s overarching aspirations to guide it through changing objectives, goals, and strategies. Mission: A statement that concisely defines an organization’s fundamental purpose for existing. Vision: A concise statement of what an organization intends to achieve in the future. Core value: A widely accepted principle that guides how people behave and make decisions in the organization. Google’s Mission and Vision Mission To organize the world’s information and make it universally accessible and useful. Vision To provide access to the world’s information in one click. Google’s Values 1. We want to work with great people. 2. Technology innovation is our lifeblood. 3. Working at Google is fun. 4. Be actively involved; you are Google. 5. Don’t take success for granted. 6. Do the right thing; don’t be evil. 7. Earn customer and user loyalty and respect every day. 8. Sustainable long-term growth and profitability are key to our success. 9. Google cares about and supports the communities where we work and live. 10. We aspire to improve and change the world. Strategic Planning Pyramid: Objective and Goals Objective: A statement of a compelling business need that an organization must meet to achieve its vision and mission. Goal: A specific result that must be achieved to reach an objective. Goals track progress in meeting an organization’s objectives Strategic Planning Pyramid: Strategy and Projects Strategy: A plan that describes how an organization will achieve its vision, mission, objectives, and goals. Deploy the Plan: The objectives, goals, and strategies are communicated to the organization’s business units and functional units so that everyone is “on the same page.” The managers develop more detailed plans for initiatives, programs, and projects that align with the firm’s objectives, goals, and strategies. IS Investments and Strategy Drivers Planners must consider many factors in setting IS organizational strategy Goals and Objective-Related Projects Objectives define goals that in turn identify projects consistent with those objectives and goals. Project Management Project A project is a temporary endeavor undertaken to create a unique product, service, or result. A project attempts to achieve specific business objectives and is subject to certain constraints, such as total cost and completion date. Organizations must always make clear connections among business objectives, goals, and projects; also, projects must be consistent with business strategies. Project Core competency: Something that a firm can do well and that provides customer benefits, is hard for competitors to imitate, and can be leveraged widely to many products and markets. Project Variables Five highly interrelated parameters that define a project: i.e., scope, cost, time, quality, and user expectations. A change in any one of the project variables (cost, time, scope, or expectations) can impact the other variables. Scope Project scope is a definition of which tasks are included and which tasks are not included in a project. A key determinant of the other project factors and must carefully be defined to ensure that a project meets its essential objectives. The larger the scope of the project, the more difficult it is to meet cost, schedule, quality, and stakeholder expectations. Cost The cost of a project includes all the capital, expenses, and internal cross-charges associated with the project’s buildings, operation, maintenance, and support. Capital is money spent to purchase assets that appear on the organization’s balance sheet and are depreciated over the life of the asset. Capital items typically have a useful life of at least several years, e.g., a building, office equipment, computer hardware, and network equipment. Time The timing of a project is frequently a critical constraint. Projects that involve finance and accounting must be scheduled to avoid any conflict with operations associated with the closing of end-of-quarter books. Projects must be completed by a certain date to meet an important business goal or a government mandate. Quality The quality of a project can be defined as the degree to which the project meets the needs of its users. The quality of a project that delivers an IS-related system may be defined in terms of the system’s functionality, features, system outputs, performance, reliability, and maintainability. User Expectations As a project begins, stakeholders will form expectations—or will already have expectations—about how the project will be conducted and how it will affect them. Project Management Project Management Project management is the application of knowledge, skills, and techniques to project activities to meet project requirements. Project managers must deliver a solution that meets specific scope, cost, time, and quality goals while managing the expectations of the project stakeholders— the people involved in the project or those affected by its outcome. Project Management Knowledge Areas Project Management Knowledge Areas: Scope Scope management includes defining the work that must be done as part of the project and then controlling the work to stay within the agreed-upon scope. Key activities include initiation, scope planning, scope definition, scope verification, and scope change control. Functional decomposition is a frequently used technique to define the scope of an information system by identifying the business processes it will affect. Functional Decomposition Example Functional decomposition of a stock management system project Project Management Knowledge Areas: Time Time management includes defining an achievable completion date that is acceptable to the project stakeholders, developing a workable project schedule, and ensuring timely completion. A project schedule identifies the project activities that must be completed, the expected start and end dates, and what resources are assigned to each task. A project milestone is a critical date for completing a major part of the project, such as program design, coding, testing, and release (for a programming project). A work breakdown structure (WBS) is an outline of the work to be done to complete the project. WBS Example Project Management Knowledge Areas: Time (2) The project deadline is the date the entire project should be completed and operational Each activity is also allocated slack time, which is the amount of time an activity can be delayed without delaying the entire project. The critical path of a project consists of all activities that, if delayed, would delay the entire project. A Gantt chart is a graphical tool used for planning, monitoring, and coordinating projects; it is essentially a grid that lists activities and deadlines. Gantt Chart Example A Gantt chart depicts the start and finish dates for project tasks. Program Evaluation and Review Technique (PERT) A formal method for estimating the duration of a project using three time estimates for an activity: shortest possible time, most likely time, and longest possible time; working with those estimates, a formula is used to determine a single PERT time estimate. Project Management Knowledge Areas: Cost Cost management includes developing and managing the project budget. Involves resource planning, cost estimating, cost budgeting, and cost control. Development of a WBS leads to definition of a project schedule and budget. Work Breakdown Structure (WBS) Development of a WBS leads to definition of a project schedule and budget. Project Budget Example Project Management Knowledge Areas: Quality Quality management is a set of activities designed to ensure that a project will meet the needs for which it was undertaken. Involves quality planning, quality assurance, and quality control. Project Management Knowledge Areas Quality planning, determines which quality standards are relevant to the project and determining how they will be met. Quality assurance evaluates the progress of the project on an ongoing basis to ensure that it meets the identified quality standards. Quality control checks project results to ensure that they meet identified quality standards. Project Management Knowledge Areas: Human Res. Human resource management are activities designed to make the most effective use of the people involved with a project. Includes organizational planning, staff acquisition, and team development Project Management Knowledge Areas: Human Res. Project steering team: A group of senior managers representing the business and IS organizations that provide guidance and support to a project. Project champion: A well-respected manager with a passion to see a project succeed and who removes barriers to the success of the project. Project Management Knowledge Areas: Human Res. Project sponsor: a senior manager from the business unit most affected by a project and who ensures the project will indeed meet the needs of his or her organization. Subject matter expert: someone who provides knowledge and expertise in a particular aspect important to the project. Technical resource: a subject matter expert in an IS topic of value to the project. Project Organization A project steering team is critical to the success of any project. Project Management Knowledge Areas: Communication Communications management involves the generation, collection, dissemination, and storage of project information in a timely and effective manner. Includes communications planning, information distribution, performance reporting, and managing communications to meet the needs of project shareholders. Project Management Knowledge Areas: Risk Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project objective. Known risks are risks that can be identified and analyzed. Risk management: A deliberate and systematic process designed to identify, analyze, and manage project risks. Risk owner responsible for developing a risk management strategy and monitoring the project to determine if the risk is about to occur or has occurred e.g., take steps to avoid the risk or develop a backup plan. Project Management Knowledge Areas: Procurement Procurement management are activities related to the acquisition of goods and/or services for a project from sources outside the performing organization. Plan purchase and acquisition. Plan contracting. Request seller responses. Select seller. Contract administration. Contract closure. Project Management Knowledge Areas: Procurement Fixed-price contract: buyer and provider agree to a total fixed price for a product or service. Cost-reimbursable contract: buyer pay the provider an amount that covers the provider’s actual costs plus an additional amount or percentage for profit. Time and material contract: buyer to pay the provider for both the time and materials required to complete the contract. Project Management Knowledge Areas: Integration Project integration management requires the assimilation of all eight other project management knowledge areas. Project integration management requires the coordination of all appropriate people, resources, plans, and efforts to complete a project successfully. Project Management Knowledge Areas: Integration Develop project charter, formally recognizes the project, outlines the objectives, lists key assumptions, and identifies major roles and responsibilities. Develop preliminary project scope statement to define and gain consensus about the work to be done. Develop project management plan that describes the overall scope, schedule, and budget for the project. Directing and managing project execution by following the project management plan. Project Management Knowledge Areas Monitor and control the project work to meet the project’s performance objectives. Performing integrated change control by managing changes over the course of the project that can affect its scope, schedule, and/or cost. Closing the project successfully by gaining stakeholder and customer acceptance of the final product, closing all budgets and purchase orders, and capturing knowledge that may prove useful for future projects. Questions?