Your organization's corporate strategy is of central importance to a new project. You need to ensure that your proposed project does not go against the company's overall strategic direction.
ALIGNING WITH CORPORATE STRATEGY
company's strategy is the plan of action it uses to allocate resources in order to achieve its long-term goals.
Your organization's corporate strategy is of central importance to a new project. You need to ensure that your proposed project does not go against the company's overall strategic direction.
Mismatches between corporate and project strategies are a major cause of project failure.
All companies have a strategy, whether it is explicit or implicit. Some organizations devote a lot of resources to formulating their strategy in written form, while others simply act out their strategy and do not articulate it.
A company's strategy integrates the company's major goals, policies, and actions into a coherent whole.
A strategy responds to the needs of an organization in terms of its
resources
A well-formed strategy helps to allocate an organization's resources to its advantage, taking into account the organization's competencies and shortcomings, anticipated changes in the business environment, and competitive activity.
external concerns
Strategic decisions are primarily concerned with external, rather than internal, issues. Most importantly, strategic decisions need to address and influence what the company produces and the markets to which it will sell.
The Managec Group, a retailer of electronic components, has a very customer-focused corporate strategy.
The company deals with only high-quality manufacturers that offer complementary product lines. This enables Managec to offer customers both variety and consistency in the components they purchase.
Managec aims to accomplish customer and revenue growth by increasing sales volume on particular product lines. A key part of Managec strategy is its sales team, who provide product expertise and a comprehensive customer-support service.
In the long term, Managec expects to achieve growth organically and by creating partnerships in key geographic markets.
New processes and practices created by a project need to support the corporate strategy. They must be in alignment with it, rather than work against it.
If a project does not align with corporate strategy, the key decision makers will question the wisdom of the investment and, most likely, not approve it.
Best practice for aligning with corporate strategy
In order to establish whether a project is in alignment, you must first identify the actual applications and benefits that are offered by the proposed project.
Then you must familiarize yourself with the company's corporate strategy. If the processes or practices supported by your project directly assist the organization in effecting its strategy, then the project is aligned.
Finally, you need to quantify the benefits of the project through an analysis of the impact of the proposed benefits on the operation of the business.
Projects involving new or enhanced processes can benefit an organization in a number of areas.
Group productivity
Projects involving group productivity tools can increase the efficiency of all or part of an organization.
Applications delivering this type of benefit include accounting systems, workflow systems, and inventory and production-management systems.
Individual or personal productivity
New processes supported by individual or personal productivity tools can enhance the efficiency of individual employees.
Examples of applications delivering this type of benefit are spreadsheets, word-processing, and graphics packages.
Business activities productivity
Projects that promote time and space efficiency in business activities can have extensive benefits for an organization. They can often directly increase sales or reduce costs by, for example, reducing the need for office space.
These projects often involve applications such as workflow systems, e-mail and Internet-based communication, and scheduling systems.
Having ascertained your organization's corporate strategy, and developed a list of applications and benefits that the project can bring to the company, the next step is to determine if these are in alignment.
A project may be said to align with the corporate strategy if the processes or practices supported by the project directly assist the organization in achieving its strategy.
If a particular aspect of the corporate strategy is not addressed by the project, this does not mean that the project does not align. But a project should not work against any aspect of the corporate strategy.
The final step in the process is to quantify identified benefits in terms of financial amounts.
This process should include an analysis of the impact of the proposed benefit on the operation of the business.
This involves an examination of the business process or practice that will be affected by the project. This enables you to predict the effect that the project will have on the organization's cost structure or income.
Suppose you are preparing a business case for a new e-procurement system for Managec, a retailer of electronic components. To ensure that the project aligns with corporate strategy, you need to
make a list of the applications and benefits of the project
The e-procurement system provides a streamlined and efficient method of obtaining goods and services. Benefits of this system include increased savings on purchases, improved timeliness of the purchasing process, reduced waste, and improved supply-chain efficiency.
establish whether the applications and benefits of the project align with the corporate strategy
The efficiency of the e-procurement system means Managec can always get the right product at the right price and the right time. This aligns with Managec's customer-focused corporate strategy, which emphasizes excellent customer service.
quantify identified benefits in terms of financial amounts
The cost savings that accrue from a more efficient procurement system are easily quantifiable. The project may also mean quantifiable increases in Managec's sales income as a result of improved customer service and product availability.
QUESTION
Philip is preparing a business case that proposes that employees should be able to work remotely, and outlines the infrastructure required to make this possible. He must ensure that the business case aligns with corporate strategy. How can he do this?
Projects involving new or enhanced processes can benefit an organization in a number of areas.
A project may be said to align with the corporate strategy if the processes or practices supported by the project directly assist the organization in effecting its strategy.
Aligning the project with corporate strategy involves aligning the benefits, not the drawbacks.
This should be expressed in terms of financial amounts.
This does not help you to determine whether the project aligns with corporate strategy.
Trey, a manager in an IT company, is carrying out the research for a business case. His proposal is to create an IT help desk. Trey first talks to his manager, Amanda, to see if his project is in alignment with the corporate strategy. Then he discusses with Alan, a project team member, how to align the project with this strategy.
Trey: I'm researching this new project, and I just wanted to check with you to make sure I'm up to date on the company's corporate strategy.
Amanda: Well, our strategy is to offer a comprehensive product and service to our customers, and to expand our operation as much as possible. A key part of our strategy is follow-up and customer service. That's what makes us unique. You need to discuss this further with Alan.
Trey: An IT help desk would speed up our response to technical issues across the organization, and enable us to offer a better service to employees with IT problems. This would result in less employee downtime and greater productivity.
Alan: I can see the benefits to the company of this project. But we need to be clear about how the project will assist the company in achieving its strategy.
Trey: Well, follow-up and customer service are key parts of the corporate strategy, and we've calculated that a good IT help-desk system will reduce support-staff downtime by up to 15%. That will improve the level of customer service and follow-up.
Alan: Yes, we estimated that the resulting repeat business and word-of-mouth new business could mean a 20% increase in sales revenue.
Trey: Also, an expanded operation means more staff and potentially more IT problems. The help-desk system will help the IT Department to cope with this extra workload more efficiently, with minimal outlay in terms of equipment or additional staffing.
Alan: Yes, we've worked out that the project's effect on IT support processes will save the company up to $100,000 a year in IT costs, as well as generating the increased sales revenue.
Trey: Great, it looks like our project aligns with the company's strategy.
By checking with Amanda, Trey was able to familiarize himself with the main points of the company's corporate strategy. He was then able to compare these points with the benefits of the project.
Trey and Alan discussed how the benefits aligned with the corporate strategy, focusing on the new help-desk system and its predicted effect on sales revenue and IT costs. They quantified these benefits in financial terms.
They concluded that the project could directly assist the organization in achieving its strategy.
Checking Neil's Project for Alignment
Purpose: Use this learning aid to get details of Neil's project and the corporate strategy of his organization.
Neil's project proposes the setting up of a company-wide, intranet-based product documentation site for sales staff. With this system, product developers would be able to update the documentation and make it available to sales staff instantly. This information could then be fed quickly to customers.
The company's corporate strategy is to provide customers with a base product that can be augmented and customized with a range of peripherals. The company aims to position itself at the cutting edge of telecommunications technology, and updates its products regularly. Communication with the existing customer base is a priority.
QUESTION 1
Identify the benefits Neil's proposed project offers to the company.
The site is accessible to employees only.
The system enables product developers to perform regular updates, which are instantly accessible to sales staff.
Sales staff can keep up to date with developments in products.
The project does not benefit employees outside sales and product development.
The documentation site enables sales staff to offer better service to their customers.
QUESTION 2
Identify the elements of the company's corporate strategy.
The company's strategy is to provide a base product that can be augmented and customized with a range of peripherals.
The company's frequent product updates are part of this strategy.
Updating the products is a key part of the company's strategy.
Good communication with existing customers is an equally important part of the corporate strategy.
QUESTION 3
Neil asks you if you think the project aligns with the company strategy. How do you answer?
The company's strategy is to provide a base product that can be augmented and customized with a range of peripherals. Neil's proposed project supports this strategy.
Neil's proposed internal sales intranet supports the company's strategy by making information quickly available to sales staff, who will channel it to customers.
QUESTION 4
Identify the areas in which the corporate strategy and project benefits are in alignment.
This enhances customer service as well as facilitating follow-up sales.
The project does not affect the company's plans for market expansion.
This improves productivity among sales staff.
Customers who have previously bought the company's products are kept informed about new updates.
Your organization's corporate strategy is of central importance to a new project. You need to ensure that your proposed project supports the company's overall strategic direction. If a project does not align with corporate strategy, the key decision makers will question the wisdom of the investment and, most likely, not approve it.
In order to establish whether a project is in alignment, you must first identify the actual applications and benefits that are offered by the proposed project. Then you need to familiarize yourself with the company's corporate strategy. A project may be said to align with the corporate strategy if the processes or practices supported by the project directly assist the organization in achieving its strategy.
Once you've verified that the project aligns with corporate strategy, you need to quantify the benefits of the project through an analysis of the impact of the proposed benefits on the operation of the business. This should be expressed in financial amounts.
Identifying Your Company's Strategy
Talk to individuals within your organization who are familiar with the organization's corporate strategy and who can explain it to you. Make a note of the elements that make up the corporate strategy, and consider how you would ensure that a potential project aligned with these elements.
I have been teaching and training agents, team leaders, supervisors, managers and admins of call centers and other businesses in BPO related fields. This series, comes as a result of that experience. I have more than 4,000 modules that I plan on sharing here. This is # 007-09
