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The project selected meets the listed criteria as it is aligned with the company's strategic plans. Strategic plans drive organizational operations; hence the success of the project can happen.
Significant components of the strategic management process
According to Chernev (2018), strategic management process entails evaluating whatever we are, are, what are yearning to become in the future as well as ways of reaching such destination. The fundamental components of the entire development incorporate:
Outlining the missions of an organization.
Analyzing internal and external environment of a company
Setting goals of a firm.
Framing strategies towards meeting the goals set.
Implementing strategies for completing projects started.
Role projects play in the strategic management process
More often than not, strategies are implemented chiefly via projects. Fruitful project implementation indicates that a company has attained its goals. For that matter, an organization has met the consumers’ needs. In this case, projects assist in winning customers. Because the prototype way outs created on a project have the capacity of offering solutions to the predicaments clients undergo in their everyday life (Anzengruber & Goetz, 2018).
Projects which are never contributing towards the strategic plans of a company often waste critical resources of a firm. Additionally, projects play a vital role in risk reduction as well as evaluation of personnel in a company. Again, in the strategic management process, projects assist in research and development. Several larger firms usually allocate some amount of profits for the projects of R&D (Anzengruber & Goetz, 2018). These organizations opt for R&D projects anchored on the valuation of prospective incomes which support planned innovation in a company. The projects of R&D assists in positioning a company in testing new ideas, products as well as establish approaches of solving current quality predicament, thus reducing defects otherwise improving performance (Anzengruber & Goetz, 2018).
How are projects associated with strategic plans?
Projects are related to strategic plans. It happens that way as projects are representing how strategies are to be put into effect or instead implemented within an organization. Because some projects are deemed to be greatly essential when compared to others, an excellent approach towards maximizing the scarce resources of a company typically is by devising priority scheme. The scheme assigns funds to project portfolio that assists in balancing of risks which can be experienced. Thus, this contributes greatly to the strategic plans in an organization.
Project portfolios can be classified as strategic, operations as well as compliance projects. The classification has various influence during the selection of a project. Strategic projects usually support an organization in the long run as well increasing revenue to a firm. Compliance projects must satisfy regulatory requirements to operate. Lastly, operational projects enhance efficiency as well as product delivery. The classification influences the selection of projects because all the categories have an explicit value. Hence, when a plan categorized as compliance is moved to strategic compliance, then it might lead to adverse effects in an organization. Through aligning project proposal carefully to a single grouping, then such project increases its likelihood of being chosen. It is imperative to note that most of the senior management portions budgets in support of every independent category during the actual selection process of a project. The acquaintance on risk portfolio, available funds, bias by senior management among others might make some people try moving project proposal towards another classification with the intention of improving the projects’ chances of being picked.
The priority system that has been published and open ensures the selection of projects is made on how they contribute to an organization. In a case when there is no open priority system, then crucial departments, robust noisy people shall get their projects chosen for wrong motives. Most companies are encouraging bottom-up since workers are in a position of doing self-assessments of their project notions alongside priorities set in a firm (Chernev, 2018). To some companies, the bottom-up approach might appear to be daunting and are rarely being practiced. Nevertheless, it does dishearten projects which evidently shall never make constructive, momentous contributions towards the vision of an organization.
ROI in Project Selection
Using only ROI as a financial criteria shall never ensure that projects that have been chosen assist in promoting strategies and missions of a company. Other contemplations like creating new technology, brand loyalty, the image a firm has in the public eyes, the position of an organization regarding ethical conducts, and upholding fundamental competencies ought to be taken into account. Additionally, it is hard otherwise very impossible to evaluate ROI for several essential projects in a firm (Chernev, 2018). Whereas ROI is deemed to be an essential concern for multiple companies, many criteria for screening should be put in place when choosing and ranking projects to be executed in an organization.
Checklist versus Weighted factor
The model is flexible.
It can be utilized across various sectors and places.
It is not answering comparative significance otherwise project value
It is not permitting comparisons to be performed with other projects which a company is running (Chernev, 2018).
The model allows ranking and comparison to be conducted with the prospective projects.
It is an open system.
It permits self- assessment.
It exposes politics and power.
Anzengruber, J., & Goetz, M. A. (2018). The cognitive and the action-oriented elements of competence along the innovation process–evidence from R&D teams in the medical equipment sector. The International Journal of Human Resource Management, 1-22.
Chernev, A. (2018). Strategic marketing management. Cerebellum Press.
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