Chapter One: Strategic Context

of Project Management
Tesfaye Debela (Dr)
 What is strategy?
• “Strategic management is a process that combines
three major interrelated activities, namely, strategic
analysis, strategic formulation, & strategic
implementation (Miller and Dess 1996).
• “Strategic management is defined as the set of
decisions and actions that result in the formulation
and implementation of plans (strategies) designed to
achieve a company’s objectives.” (PearceII and
Robinson 2005).
 Strategic Management process
Steps in Strategic Management Process:
1.Formulating the company’s mission, including broad statements
about its purpose, philosophy, & long-range objectives.
2.Analyzing the company’s internal conditions & capabilities.
3.Assessing the company’s external environment, including both
the competitive & the general contextual factors.
4.Analyze the company’s options by matching its resources with
the external environment.
5. Identify the most desirable options by evaluating each option in light of
the company’s mission.
 Strategic Mgt Process…
6. Select a set of long-term objectives & grand strategies that
will achieve the most desirable options.
7. Develop annual objectives & short-term strategies that are
compatible with the selected set of long-term objectives & grand
strategies.
8. Implement the strategic choices by allocating budgeted
resource in which the matching of tasks, people, structures,
technologies, & reward systems is emphasized.
9. Evaluating the success of the strategic process as an input
for future decision
 Concepts of a Project
Reflection
◦ What is a Project?
◦ What features do projects have?
Comprehensive definition:
Project is a temporary endeavor involving a connected
sequence of activities and a range of resources, which is
designed to achieve a specific and unique outcome,
which operates within time, scope, cost and quality
constraints and which is often used to introduce change
(Lake, 1997).

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 Characteristics of Projects
 Purpose-the basic reason for the existence of a project- to
solve a problem, address a need or take the advantage of
opportunity.
 A project brings about a unique product or service -
something that has not existed in the organization before.
 Projects are composed of interdependent and Sequences of
activities
 Projects are Temporary that have clear start and finish time
 Scope- the extent of the problem or opportunity that the
project needs to address.

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 Characteristics of Projects
 Projects are Organizations that requires team-work and is
vital to coordinate resources to achieve the project objectives
 Resources and Cost: projects consume human, financial and
material resources that can be converted into budgets
 Projects create quality deliverables to maximize the
satisfaction of users.
 A project is often used as an instrument for change - change
for the betterment of the society.
 projects have a life cycle with a number of distinct phases in
between
 A project involves risk and uncertainty

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 Programs and Portfolios
• A program is an assortment of related projects that
are managed together to achieve a number of
objectives.
• Programs may also contain elements of ongoing
operations. Since programs comprise multiple
projects, they are larger in scope than a single
project.
• A portfolio is defined as projects, programs,
subsidiary portfolios, and operations managed as a
group to achieve strategic objectives.
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 Project vs Program
Project Program
Differences

Narrow in scope Wide in scope; can comprise

many projects as components.
Specific and detail Comprehensive and general
More precise and accurate in Broader goal related to
its objectives and features sectoral policy
Possible to calculate the Difficult to calculate costs
costs and returns and returns
• Have purpose/ objectives
Similarities

• Require input (financial, manpower, material)

• Generate output (goods and/or services)
• Operate over space and time
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 Projects Vs Operations
Organizations perform two types of work: project work and
operational work

Feature Projects Operations

Purpose Attain objectives and Sustain the
terminate organization
Time Temporary Ongoing
Unique product, service, or Non-unique product,
Key Differences

Outcome result service, or result

Dynamic, temporary teams Functional teams
formed to meet project needs; generally aligned with
People Generally not aligned with organizational
organizational structure structure
Authority Varies by organizational Generally formal,
of structure; Generally minimal, direct line of authority
Manager if any, direct line authority

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Organizational Project Management
• OPM is defined as a framework in which portfolio, program,
and project management are integrated with organizational
enablers in order to achieve strategic objectives.
• The purpose of OPM is to ensure that the organization
undertakes the right projects and allocates critical resources
appropriately
 OPM…
The integration is achieved when:
• Portfolio management aligns portfolios with
organizational strategies by selecting the right
programs or projects, prioritizing the work, and
providing the needed resources.
• Program management harmonizes its program
components and controls interdependencies in order to
realize specified benefits.
• Project management enables the achievement of
organizational goals and objectives
 Projects and Plans
• Projects and Plans Projects exist as
components in broader developmental plans,
their identification, formulation and
implementation should be linked to short,
medium and long term national development
plans.
 SPrM definitions

• Strategic Project Management (SPM) is the process of

thinking about one’s Projects in light of their connection
to the strategic plan of the organizations. 
• It is a process of managing the broader business aspects of
projects to align and support the organizational strategy
What is the difference between SPrM and the Traditional Pr
Management
• We apply all of traditional project management
methodologies and frameworks to strategic project
management.
• strategic project management as a new sub-discipline
within the broader discipline of project management
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Strategic Project Management Development
Framework
• Simplify decision-making: clear strategy simplifies the
decision-making process  
• Improve priority management: Advance your strategy and
your projects every day by developing a habit of starting with
one important thing.
• Link budgets to strategy: Allocating the required budget is a
clear signal of the company's priorities.
• Contribute to the project strategy: calling on project
management offices to contribute to the strategic planning. . 
 SPr M Framework…
• Focus on organizational ambitions: recognize and admire
people for their contribution in the project management. As a
managers , avoid seeking personal glory and recognition at
the cost of business outcomes.  
• Revisit strategic progress: The project management team
need to constantly measure the progress and revisiting the
strategy as needed.