Chapter 3Chapter 3Strategy and governanceStrategy and governance

Learning objectives• discuss the relationship between strategy and project

management• outline a typical strategic management process and argue

why many organisations fail to implement their strategies successfully

• explain the concept of governance from a corporate, strategic, programme, IT and project perspective

• analyse a project case study using a model of strategic governance

Projects and strategy• Comparing the definitions of strategic planning and

project management provides an indication that the two disciplines are compatible.

• A typical definition of strategic planning is: a set of decision rules which guide the company’s resource allocation process, taking into account both the short and long term, with emphasis on allocating resources in uncertain conditions to achieve future

objectives. The company which uses a form of strategic planning does not simply react to events in

the present, but considers what should be done in order to achieve future objectives. (Scott, 1997)

• There is little doubt that project management is an ideal tool for strategic planning and strategic implementation. (Roberts and Gardiner, 1998)

4 ‘pillars’ of governance, according to Asian Development Bank’s

annual report (1998)• Accountability – the capacity to call officials

to account for their actions• Transparency – entails low-cost access to

relevant and material information• Predictability – results primarily from laws

and regulations that are clear, known in advance and uniformly and effectively enforced

• Participation – needed to obtain reliable information and serve as a reality check and watchdog for stakeholders.

The five lenses

Management by projects

According to the Project Management Institute, managing by projects ‘is an organisational approach to the management of ongoing operations which treats many aspects of ongoing operations as projects to apply project management techniques to them’ (PMI, 2000: 6).

IT governance• Any framework for programme management must include the

management of information and therefore the evolution of an enterprise and IT architecture

• An enterprise and IT architecture identifies the main components of the organisation and the ways in which these components work together in order to achieve defined business objectives

• The components include: – Staff– Business processes – Technology– Information– Financial and other resources

Project governance

• Definition: the set of structures, systems and processes around the project that ensure the effective delivery of the project through to full utilisation and benefits realisation by the business

Four key influences on project governance structures:

1) Risk planning

2) Life cycle management

3) Strategic change

4) Value management