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Strategic Alignment

Strategic Alignment. Lecture 2. Overview. Strategic Management Organizational mission Objectives Implementation Portfolio Management Governance Balanced Scorecard. Organizational Mission. Strategic Management “You Are Here”; Destination and Plan

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Strategic Alignment

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  1. Strategic Alignment Lecture 2

  2. Overview • Strategic Management • Organizational mission • Objectives • Implementation • Portfolio Management • Governance • Balanced Scorecard

  3. Organizational Mission • Strategic Management • “You Are Here”; Destination and Plan • How the organization plans to compete with available resources in current and anticipated environments • Process Steps • Define and redefine organizational mission • Set long-range goals and objectives • Analyze and formulate strategies • Implement strategies through projects

  4. SMART Objectives • Specific • Be unambiguous • Measurable • Establish objective metrics • Assignable • Identify accountability • Realistic • Time-bound • Identify the finish line

  5. Strategic Projects • Projects are how strategies are realized • Implementation Issues • Multiple dimensions of shared resources • Prioritization • Formal and informal coordination • Authority and accountability • Communication • System support

  6. Portfolio Management • Organizations take on multiple parallel projects to most effectively use resources • Someone must manage the big picture • Priorities are dynamic • Resource demands and availabilities are very dynamic • Organizations must keep employees engaged • Portfolio management system support

  7. Threats to Portfolios • Lack of consistent approval system • Lack of centralization (authority / prioritization) • Lack of downward communication • Turf battles • Insufficient budgeting of employees • Insufficient respect for the strategic plan • Inconsistent application of selection criteria • Lack of management backbone (NO / pets) • Insufficient analysis of new project impact • Unpredictable support that must get done

  8. Governance • Project Classification • “Must Do” vs. Operational vs. Strategic • Selection Criteria • Payback: Investment recovery time • Net Present Value: Return over time • Others: Alignment, resource availability, technical risk, etc. • Formal Proposal Process

  9. Project Proposals • Proposals capture relevant information • Brief description (incl. category and timing) • Risks • Selection criteria ratings • Initial assessment screening • Criteria weighting gives objective score • Formal Approval Process • Signing authority based on total cost • Approved projects are prioritized

  10. Balanced Scorecard • Portfolio projects must be managed including re-assessing priorities • System must be flexible to allow for “incoming” projects • A Balanced Scorecard tracks and reports progress toward the strategic vision • Market Share, Customer Satisfaction, etc. • Scorecard values feed back into prioritization • Feedback is critical to integrity

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