Project portfolio management is the management process tailored to aid the organization gain and review important information concerning all its projects, which are then sorted and prioritized according to some criteria like strategic value, cost, effects on resources and others (Greer, 2009). IT project portfolio management has certain objectives that must prompt its undertaking. However, the evaluation must start with the IT strategy first and not the goals and objectives of the business or organization.
The IT strategy should be the linking chain in the business strategy that governs the service or product strategy, which in turn should be able to drive the IT strategy. The following are examples of the strategies of a CRM company. In determining the IT project to undertake, the business strategy must first be analyzed and understood. For example, an organization’s business strategy may be to see a customer base increased by a certain percentage within a specific period. In the business strategy, all the necessary requirements for accomplishment of the strategy must be put in place.
An IT organization may provide increase functionality through business analytics as well as executive dashboards. What follows should be the product strategy. An IT firm may want to work with business intelligence software organization to improve analytical capacity of the CRM software. The identification and undertaking of such strategies should be within a time frame. In this linkage chain, the product strategy should be governed and driven by the organization’s business strategies (Greer, 2009). However, the product strategy should be the driving force behind the IT strategy which should come third in this link chain of strategies.
An organization’s IT strategy could be to develop a new software platform which would enable easy integration between the organization’s software and the business intelligence software company as well as with other companies. The IT strategy should then be the driver of our IT project prioritization (Machevarapu, 2006). As an IT project a company may undertake to create a Web service-based platform which provides a universal data transmission and exchange between the business intelligence software and the CRM software.
This chain should be able to inform us whether the IT projects are in line with our IT strategy and by extension our business strategy. However it would be difficult to verify the specific values our IT projects have on our business. In order to determine particular values of IT projects to the organization in a hierarchical analysis of the strategies, one needs to specifically look at the four drivers that motivate our strategic analysis. The first and the most important of these drivers is the potential reduction in expenses. One of the motivating factors should be the reduction of cost in our business operation.
In this case our CRM integration should be able to offer a new platform that would helps us reduce the cost of creating links to other software sellers or vendors. This is because our CRM is formulated on a Web services standard (Entrekin, 2006). Our second and essential motivation should then be the potential revenue increase our project would bring to the business. As a business outfit, our concern should be how to minimize cost and improve our capital base and therefore every project undertaken should be aligned to our business strategy of seeing an increase in revenue.
According to Entrekin (2006) in our IT project prioritizing, an increase should be expected in our overall revenue because we would expect a larger client base that would consider our CRM software. The third driver should be the impact of our IT project on our product as well as on our competitors. The project should not only improve our products but should put us above our competitors. This should be our strategic undertaking so that our software platform project directly impacts our CRM product and hence improve the organization’s competitive position.
The final and most important driver of our IT project should be the legality of our undertaking. We have to be aware of the various laws and regulatory measures required of IT projects (Greer, 2009). If the laws are in favor of our project, then we have to move swiftly to accomplish our project that would enhance our business strategies. Security of data is an important component of the new CRM software platform and because such data as social security numbers are sensitive, the federal laws for example, permit their storage within the CRM system.
Strict compliance with the IT laws would enable us undertake projects that are tenable and are in line with our IT strategy and by extension our business goals and objectives (Entrekin, 2006). Every IT project must be evaluated against the four discussed drivers in order to determine their value as well as priority to the organization. Again, it is important to note that the drivers are not and should be analyzed in isolation from each other. But they should be intertwined in a meaningful and repeatable process in the prioritization process.
Analysis of any IT project must therefore be considered under each and every one of these drivers in order to come up with a comprehensive and exclusive value-base project (Entrekin, 2006). Prioritization management is a process and creating a prioritization model would have to take up-bottom approach which then breaks down every driver into different parameters. This process requires a concerted effort of all business leaders from all departments in order to get the insights of the business focus as well as performance measurements.
From the example above, the CRM company leaders undertook to break down into four parameters the “expense reduction” driver. These were customer service expenses, back office efficiency gains, customer acquisition and retention and others (Machevarapu, 2006). This step is followed by scoring every project across all the parameters, in a down-up approach in order to find out the overall score of our project. This process requires a presentation of statements to the business leaders and gauging their degree of agreement with particular criteria assigned to the scoring range in a scale of 1-10.
For instance, in the CRM company project, the leaders were asked whether they considered the project to be profitable or not in terms of savings. A score of 1 meant no saving while that of 10 meant a saving in the tune of millions. The bottom-up rating in this case will give us the final scores which will definitely prioritize the project or not. The third step in the prioritization process would be to adjust the 2 prioritization levers through assigning of weights to every driver as well as their particular parameters in accordance with the current priorities in business.
Our weights would then be adjusted correspondingly as the priorities change, so that our scores for every IT project remain in line with our business strategies. Such levers must be set in relation to business priorities through out the project portfolio and never changed among projects (Machevarapu, 2006). After the projects have been scored, sorting to determine those that are feasible may be undertaken. The cutoff points in this case may be related to the total number of such projects a business can absorb, the available funds for investments or any other constraints the organization may be facing.
The most important thing to every manager is that all prioritization models look well on paper. However, there are no perfect ones and getting accurate results may be the greatest challenge. One cause of this is that most people would try to manipulate the outcomes. It is therefore important that every manager learns some basic steps towards understanding prioritization. For example, one needs to learn about what constitutes a project, which projects are to be subjected to strategic analysis, and which ones are not and finally learning to limit the number of projects undertaken by a particular department.
Courtney from Study Moose
Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/3TYhaX