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Strategic management can be defined as the art and science of formulating, implementing, and evaluating the strategies under the decisions related to major organisational goals and objectives (Barney and Hesterly, 2010).
It holds significant importance in the case of the programme, which can be defined as a group of interrelated projects that helps an organisation to achieve beneficial change for an organisation (Lycett et al., 2004).
Considering the latter, this report aims to investigate the importance of strategic alignment of projects within organisations while exploring the importance of the project maturity model and change management, especially within programme management.
Strategic alignment of projects undertaken by organisations is considered to have an influential role inprojects’e overall failure and success. In particular, the literature has suggested that organisations cannot achieve the desired level of competitiveness if it fails to align their information technology (IT) and information strategies (IS) in their project, which can influence the overall effectiveness of IT (Avison et al., 2004).
On the contrary, Venkatraman (2000) argued that the failure of strategic alignment in projects could ultimately hamper the performance and viability of the firms. Considering the latter, strategic alignment has frequently been considered a priority in the organisation, and the most commonly used interchangeable words to indicate or define strategic alignment include; integration (Weill and Broadbent, 1998), fusion (Smaczny, 2001), and even overall fitness (Porter, 1996).
About the latter, investigating the importance of strategic alignment has been suggested to have significant value. It can help businesses resolve issues and challenges that could lead to project failure.
It has even been suggested in the findings of Stanleigh (2010) that the most prominent reason for the failure of projects was a strategic misalignment between the organisational strategy and the project. Misalignment has become a prevailing concern in the 21st century and is evident in the failure of projects undertaken by local and multinational companies.
For instance, Stanleigh (2010) argued that the overall failure of Royal Dutch Shell’s project could be attributed to strategic misalignment that doubled the costs (i.e. from $10 billion to $20 billion); thus increasing the burden on the business in their Siberian liquefied gas facility.
Similarly, the report conducted by PWC (2004), as cited in Stanleigh (2010) indicated that only 2.5 per cent of the projects have successfully achieved the desired level of success from a total of 10,640 projects, which is an alarming situation that calls for immediate attention to ensure right strategic alignment.
On the other hand, Calleam (2014a) investigated 70 failed mega or large projects and found that most of the failed projects were primarily due to strategic misalignment.
For instance, the Boeing Project ‘787 Dreamliner’ in 2013 experienced an exponential increase in its completion cost from $5 billion to $18 billion. In contrast, Avon’s project ‘The Promise’ in the year 2014 also failed in terms of completion due to strategic misalignment that ultimately increased the cost to $125 million from $100 million (Calleam, 2014b).
Considering the latter examples, it has become evident that the most common mistake that caused the overall failure of the projects was the strategic misalignment (i.e. misalignment with the strategy) that not only caused delays in the projects but also affected the overall confidence and trust of the stakeholders involved in the project.
Grundy (2001) suggested that strategic misalignment occurs when an organisation fails to link the business strategy and the undertaken project. In particular, the project management teams are unaware of the overall corporate strategy, which can be argued to be the result of miscommunication as the strategic layer’s primary purpose remains on hiding the overall goals and vision of the project for commercial sensitivity while ensuring that they have the absolute power in terms of project management (Kearns and Sabherwal, 2006).
As a result, it creates confusion amongst the project managers and the employees at the project level; however, they focus on the completion of the project, but with little or no importance to gaining in-depth information about the business strategy (Grembergen and De Haes, 2009). This implies that the inconsistency and unclear strategy for the overall project and the failure to consistently integrate the ideas into the project (i.e. strategic misalignment) increases the possibility of the project’s failure.
From the latter discussion, it has become evident that strategic alignment holds significant importance and value, and companies, for the very reason, have shifted their approach and are now more concerned about strategic alignment against other elements (Grant, 2003).
As a result, both local and multinational companies have considered project management a means for strategy implementation while ensuring the relative importance of strategic alignment to project management to at least 50:50 from 90:10. More importantly, organisations have considered various alignment models, where the primary model that has gained utmost importance has been the strategic alignment model.
Strategic Alignment Model (SAM) has presented the companies with an ability to create, assess, and sustain strategic alignment in projects; meanwhile offering the project managers and other key stakeholders with sufficient knowledge to investigate the current alignment levels, which serves the purpose of monitoring and changing the future alignment per the overall strategy (Avison et al., 2004).
It can be argued that strategic alignment of projects within organisations has become the foremost priority for attaining desired goals and objectives while ensuring that challenges and issues resulting from misalignment are resolved in most meaningful and logical manner.
Furthermore, the findings also indicated that using strategic alignment can play a critical role in the project’s overall success, thus leading to increased confidence and trust amongst theproject’s key stakeholderst.
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In light of the literature, project management maturity has been argued to be a progressive process that continually presents the organisation to make constant and noticeable improvement during the project development phase (Crawford, 2006).
In addition, it has been suggested that project management maturity is not amongst the tools that can help in rapidly bring transformation within a project.
Still, it is an ongoing process, which implies that the benefits of undertaking this model are noticeable over time (i.e. achieving the completion of the project) (Ibbs and Kwak, 2000).
Considering the latter, it has been found that the project management maturity model (PMMM) aims to present the project with a logical path for progressive development while offering the management the ability to bring significant improvement in the projects undertaken within an organisation.
Considering the latter, the literature concerning PMMM has revealed that companies must capitalise upon this model to determine the level of maturity that it must achieve based on its capabilities and resources and the overall goal and scope of the project.
It implies that the model presents sufficient knowledge for key personnel to make a roadmap for performance recovery and ongoing progress, which might not have been possible without the usage of this model (Lockamy and McCormack, 2004).
In addition, it also presents the project managers and other key personnel with sufficient knowledge of the elements that must be taken into consideration to note improvement during different stages of project development.
This information can be capitalised to increase the overall sustainable growth of the business and its profitability while ensuring the utmost satisfaction of the customers and the key external stakeholders (Kerzner, 2002).
Furthermore, PMMM can also present the management with an ability to reach the highest maturity level, where information and knowledge about the development and adoption of sufficient project management culture can help the business optimise its sales and operational efficiency (Grant and Pennypacker, 2006).
Figure 1: Project Management Maturity Model
Source: Rao (2011)
On the other hand, it has also been suggested that PMMM offers valuable insights to project managers about the requirements and standards that must be achieved for the attainment of the highest maturity level; thus allowing the project managers to work on exhibiting improvement in cost reductions, improved project delivery time, profitability etc. (Yazici, 2009).
Since organisations operate in an intensely competitive business environment, the priority has shifted to speedy transformation; however, the application of PMMM helps the organisation comprehend the importance of continuous (i.e. on-going) improvement rather than quick change.
By understanding this element, organisations can formulate strategies and processes to ensure continuous improvement while presenting the management with an ability to leverage the neutral consultants for planning and assessing the overall success and progress of the business with time (Khoshgoftar and Osman, 2009).
Not only this, the use of PMMM can also present the organisations with an ability to systematically perform benchmarking while offering the management with an assessment framework that can be capitalised upon for the improvement of overall project management maturity; thus allowing the business to experience dramatic improvement in terms of return on investment (ROI) (Kwak and William, 2000).
The latter has also been highlighted in Yazici (2009) findings, where the purpose of the study remained on comprehending the relationship between the Project Maturity Model (PMM) and organisational performance. The study’s conclusions stated that the model could be applied in the service and manufacturing sectors.
It offers in-depth information about the factors that must be considered to improve project maturity over time. In particular, the study stated that organisations that have capitalised upon the use of the project maturity model are better positioned to achieve increased sales growth, substantial savings, and increased competitiveness even against fiercest rivals in the overall industry (Crawford, 2014).
On the other hand, it was also found that companies are more interested in using the maturity model to assess their strengths and weaknesses while presenting the companies with an ability to strategically evaluate the significance of PMMM as a competitive strategy for the attainment of better quality and greater customer satisfaction.
However, it has also been indicated that the desired level of project maturity can only be achieved through solid management support and the key stakeholders; thus allowing the management to remain abreast of changes that must be taken into consideration for utmost confidence, trust, and support from the key stakeholders (Gardiner, 2005).
The Project Management Maturity Model findings have indicated that companies have capitalised upon the model to present a roadmap for strategic improvement while ensuring that it remains ahead of competitors by achieving the desired level of maturity in the projects.
Since PMMM helps an organisation to assess and diagnose its overall health, companies have acknowledged the importance and usefulness of the model not just to improve their performance but also to achieve increased sales growth, substantial savings, as well as increased competitiveness even against fiercest rivals in both service and manufacturing industries.
Change, in the contemporary business environment, has been argued to be an inevitable force; thus, companies have considered it to be their utmost priority to remain abreast of change, and the underlying strategies that must be taken into consideration for maximum success, especially in the case of programme management (Lycett et al., 2004).
From the latter, change can be defined as a process through which an organisation transforms its functions by introducing new systems, structures, procedures, and even products and services.
Though companies have acknowledged the importance of change, they tend to respond to the fluctuations in the dynamic environment rather than proactively responding to change, which has been argued to be of significant value in programme management (Pellegrinelli et al., 2007).
In particular, the literature has indicated that programmes are driven based on the strategic direction of the organisation, its strategies, and the underlying initiatives taken by the organisation to ensure that change drivers are optimally taken into account.
Considering the latter, projects have been suggested to be the main drivers of organisational change, thus indicating that organisations must continually identify, define, and prioritise the implementation of projects that can deliver the change (Paton and McCalman, 2008).
In simpler words, companies design programmes to achieve the underlying benefits by implementing change, not just the processes but also the culture, infrastructure, and structure. The method of initiation alignment achieves this goal and monitoring the projects and their underlying activities helps create unique capabilities while bringing a significant change in the business operations (Turner, 2008).
Figure 2: Drivers of Change and Programme Management
Source: Ni Direct (2017)
Considering the latter, it has become evident that changes in the organisational setting are undertaken to improve the overall performance of the projects;.
However, some of the improvements can be achieved by just installing the solutions, but most of the benefits are achieved by bringing change in terms of how the jobs are performed (Prosci, 2018).
This element has also been identified in Prosci CMROI Model, where it has been suggested that adopting a change concerning people and their jobs can bring significant success to the overall project, which the model refers to as ‘adoption contribution’.
This implies that change management not only concentrates on helping the people to change their perspective and attitude towards their job but also how the job should be done; thus presenting the organisation with an ability to capture the adoption contribution of the people about the achievement of programme or project return on investment (ROI) (Prosci, 2018).
On the other hand, the importance of change management within programme management has been argued to be significantly valuable. In particular, companies that can sufficiently apply change management have been argued to be better positioned to deliver the projects about their objective.
In this context, Prosci (2018) longitudinal research (i.e. 8 years) was able to demonstrate the correlation data from over 2000 data points, where it was found that companies that have undertaken a variety of excellent change management initiatives are in a better position to meet the desired objectives in comparison to those companies that have overlooked the importance of change management within programme management.
This implies that the ability to comprehend and implement change increased the likelihood of the companies to achieve their desired objectives by six-fold. In contrast, companies with fair change management initiatives increased the likelihood by three-fold (Prosci, 2018).
This has even been reported in McKinsey’s research, where it was reported that effective and excellent change management initiatives within programme management increase the possibility of capturing ROI in comparison to poor change management. In relation to the case of projects, when companies are able to effectively apply change management, it ultimately increases the overall delivery rate as well as success rate (Ibbs et al., 2001), which is even highlighted in the following graphical representation;
Figure 3: Change Management and Project’s Objectives
Source: Prosci (2017/2018)
The importance of change management within programme management is not just limited to the increase of ROI or meeting the desired expected outcomes, but it also presents the organisation with an ability to consider the people side of change; thus resulting in reduced risks (Carnall, 2018).
In particular, it has been reported that when change management is ignored, organisations have to face excessive risks and costs, which is even applicable to the case of projects, where projects are subjected to increased costs in the form of redesigning, reworking, revisiting, redoing, restraining, and re-scoping.
This implies that when people-side of the risks are ignored, it increases the possibility of attrition and absenteeism, which eventually leads to the decline of productivity as well as disengagement of the workforce (Prosci, 2018).
However, effective change management within programme management can help in reducing the issues and challenges associated with the people-side of change; thus allowing the organisation to effectively mitigate the project’s critical risks while allowing the organisation to keep its employees motivated and engaged in its business operations as well as projects (Park and Mora, 2003).
The findings in relation to the importance of change management within programme management indicated that change is of utmost importance to a project’s success.
For this very reason, companies have continually formulated and implemented excellent change management initiatives to achieve the desired project objectives while increasing the likelihood of capturing improved ROI within programme management.
In addition, companies have not just taken account of change management to attain desired objectives, but also the processes and practices of the employees to ensure that jobs are performed most appropriately for the achievement of operational efficacy and excellence.
By bringing change in the overall business functions, organisations are in a better position to increase project return on investment, while positively affecting the morale, performance, and even satisfaction of the employees about their job and the organisation.
Conclusively, the study’s findings have revealed that programme and strategic management are of utmost importance for the growth and survival of businesses in the technologically advanced and globalised era. In particular, the study found that strategic management in relation to programme management has presented the companies with an ability to strategically align their overall goals and objectives with that of the purpose of undertaking a project, which helps increase the competitiveness of the businesses against their rivals in the industry. In addition, the study found that companies are more interested in strategic alignment for the purpose of resolving issues and challenges that could lead to project failure that could ultimately increase the possibility of increased project cost and discrepancy in terms of delivery.
In relation to the importance of using the project management maturity model (PMMM), the study found that its application has presented companies with an ability to make constant and noticeable improvements during the project development phase. More importantly, it was also found that the use of PMMM is quite beneficial for organisations. It presents a logical path for progressive development while offering the management an ability to bring significant improvement in the projects; thus ultimately helping in reaching the desired level of maturity.
The study also found that change is an inevitable force in the 21st century. Companies must capitalise upon change management techniques and principles within programme management to transform business functions while offering the business the ability to introduce new products and services against competitors. More importantly, change management within programme management was of utmost importance as it increases the likelihood of companies achieving their desired objectives most effectively and efficiently.
Frequently Asked Questions
The strategic alignment of projects within organizations ensures that project goals and objectives are in line with the overall organizational strategy, maximizing efficiency, resource allocation, and successful outcomes.
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