Ibrahim Awad - PPPM - Aligning Projects With Strategy Through Balanced Scorecard v5.0-Libre

8/9/2019 Ibrahim Awad - PPPM - Aligning Projects With Strategy Through Balanced Scorecard v5.0-Libre

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0|Page

t

nagement

er

TheBritishUniversityinDubai

Aligning

Projects

toStrategy

throughtheBalancedScorecard

September2012

Author

!brahimA"ad

#ScinProject#anagemen

Project$

Programme

and

Port%olio


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#a

SupervisorDr&Paul'ardin


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MGT502 Project, Programme and Portfolio Management Student ID 120061

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)ontents

1. Introduction..........................................................................................................................................2

2. ResearchAim.........................................................................................................................................2

3. ResearchObjectives.............................................................................................................................. 2

4. Literaturereview................................................................................................................................... 2

4.1. Bacground.......................................................................................................................................

2

4.2. Project!anagement........................................................................................................................ 3

4.3. "trateg#!anagement.......................................................................................................................4

4.4. $heBa%anced"corecard&B"'(........................................................................................................... 4

4.). Projects*"trateg#A%ignment'ha%%enges........................................................................................... +

4.,. Projects*"trateg#A%ignmentusingB"'............................................................................................. -

4.,.1. A%ignmentand'ascadingObjectives!easuresand$argets..................................................... 1/

4.,.1.1. 'ascading!ethods..................................................................................................................... 1/

4.,.1.2. A%ignmentand'ascadingto"ubBusiness0nits&"B0(anditseartments.............................11

4.,.1.3. A%ignmentand'ascadingto"uort0nitsanditseartments.............................................. 12

4.,.1.4. A%ignmentand'ascadingtoterna%Partners........................................................................... 12


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4.,.1.). A%ignmentand'ascadingtom%o#ees..................................................................................... 12

4.,.2. InitiativesA%ignment................................................................................................................... 14

4.5. Ana%#6ingtheB"'A%ignmentaroach.......................................................................................... 14

4.+. "uggestionsandRecommendations............................................................................................... 1,

). 7utureResearch.................................................................................................................................. 15

,.Re8erences........................................................................................................................................... 15


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1& !ntroduction

Overtheasttwent##earstheBa%anced"corecard&B"'(wasre8erencedb#

man# organi6ations as the e# 8or their strategic advances over their

cometitorsb#success8u%%#im%ementingtheB"'toa%igntheOrgani6ationa%"trateg#withitsOerations.&7rigo2/12(.

$he rojects are considered the bacbone o8 the strateg# eecution o8 an#

organi6ationthere8oreitisimortanttoaddresshowtheBa%anced"corecard

&B"'( manages and ensures that these roject comonents are

im%ementab%eanda%ignedtostrateg#.

2& +esearchAim

$hisresearchwi%%e%oretheBa%anced"corecard&B"'(techni9uesthat

8aci%itatearoriatea%ignmento8there9uestedrojectswiththe

organi6ationa%strateg#.$heresearchwi%%tr#a%sotohigh%ighttherosand

conso8B"'aroachinordertoen%ightenthe8utureenhancements8orthe

B"'anditsa%ignmenttechni9ues.

*& +esearch,bjectives

$heresearchwi%%tr#toachievethe8o%%owingobjectives:

1* ;igh%ightthee#concetso8theBa%anced"corecardandthe%insto

"trateg#!anagementOerations!anagementProject!anagementand

Port8o%io!anagement.

2* Reviewthe%iteratureabouttheProjects*"trateg#A%ignmentcha%%enges

3* ReviewandassesstheB"'aroachtoa%ignProjectto"trateg#

-&

.iterature

revie"

-&1&

Bac/ground

Anincreasingnumbero8o nowada#susetheBa%anced"corecard&B"'(to


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ensurethatthestrategicobjectivesarewe%%communicatedtostaeho%dersandthat

toidenti8#themeasuresandtargets8ortheseobjectivesinadditiontotherojects

andactivitiesthatenab%ethestrateg#.&Ranins2//,(.


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!oreoversevera%methodo%ogiesand8rameworseistintherojectmanagement

ro8essionsuchasP!I>s P!Bo? a=d O@'>s PRI'BCthatareconcernedtoincrease

therojectsuccessratesandthee8Dcienc#o8therojectsde%iver#.&Ranins2//,(.

;owever 8ramewors addressing strateg# management cannot ensure that the

identiDed rojects are im%ementab%e and 8ramewors addressing the roject

management cannot ensure that the eisting rojects are a%igned with the

organi6ation>s strateg#.&Ranins2//,(.

$heresearchisconcernedtohigh%ightedhowtheba%ancedscorecardaddressthese

issuestoensurethatorgani6ationa%strateg#comonentsareim%ementab%eand

a%ignedtothestrateg#.

-&2&

Project

#anagement

$heroject!anagementisdeDnedb#&P!I2//+.,(as Ethe a%iFatio=o8

=oG%edge si%%s too%s andteFh=iHues to


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| P a g e


e%oreabout"trateg#!anagementbe8oreindu%gingintotheuroseo8the

researchthatismain%#abouthowrojectswi%%bea%ignedwithstrateg#.


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| P a g e


-&*& Strategy#anagement

$he"trategic%anningdeDnitionisa%ignedwiththerojectmanagementdeDnition&@ardiner2//)(C

there8oreweneedtounderstandwhat"trateg#means.

$he %ite


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$he#a%sodetai%edtheB"'tohave8ourersectives:

1* $he7inancia%Persective


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$#ica%%#re%atetoro8itabi%it#b#measuringoeratingincomeorreturnoninvestment.

2* $he 'ustomerPersective

Identi8#thecustomerandmaretsegmentsthatareimortanttocometein.

3* $he Interna% Business ProcessPersective

Identi8#theinterna%rocessesthattheorgani6ationshou%dimroveandece%.

4* $he Learning and @rowthPersective

Identi8#thecometenciesandcaabi%itiesthattheorgani6ationmustdeve%oto

ensure%ongtermcometitiveadvantage.

$he# a%so high%ighted that the "trategic Objectives wi%% be described under each

ersectiveandthenmeasureswi%%bedeDned8oreach"trategicObjectiveanda

$arget wi%% be set 8or each measureC a8ter that the organi6ation wi%% identi8# the

Initiativesthatwi%%achieveeachsettarget.

$he B"' wi%% %oo something %ie thediagram1be%ow:

Perspective Strategic,bjectives

#easures Targets !nitiatives

)ustomer "O*'1 "O*'1*!1 "O*'1*!1*$1 Initiative/1

Initiative/2

"O*'2 "O*'1*!2 "O*'1*!2*$2 Initiative/3

Initiative/4

7inancial "O*71 "O*71*!3 "O*71*!3*$3 Initiative/)

"O*72 "O*72*!4 "O*72*!4*$4 Initiative/,

!nternalBusinessProcess

"O*I1 "O*I1*!) "O*I1*!)*$) Initiative/5

"O*I2 "O*I2*!, "O*I2*!,*$, Initiative/+

.earningand'ro"th

"O*L1 "O*L1*!5 "O*L1*!5*$5 Initiative/-

Initiative1/

Initiative11

Diagram1.0:IndicativeBalancedScorecardadaptedfromtheconceptsexplainedby


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MGT502 Project, Programme and Portfolio Management Student ID 120061(Kaplan&orton1!!"#


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$ocom%ementtheB"'eecutionthe#haveintroducedthe"trateg#!aconcet

whichdescribestheva%uecreationrocessb#%iningtheobjectivesacrossthe8our

ersectivesintheB"'seeDgure1./.

$ig%re1.0:DescribingtheStrategy:heBalancedScorecardStrategy'ap(Kaplan&orton001)p.!"#

Lining"trateg#tooerationshasbeendetai%edin&?a%anorton2//+(as

the#havebui%ta!anagement"#stem8orIntegrating"trateg#P%anningand

Oerationa%ecutionthatconsistso8simajorstagesU seeDgure2./:

1* eve%othe"trateg#

$hisinc%udesdeve%oingthe!issionSa%uesandSisionthrough"trateg#ana%#sis

and8ormu%ation.

2* P%anthe"trateg#

$hisinc%udesidenti8#ingthemeasurestargetsandinitiativesthatcanachieve

theidentiDedmissionandvisionandisgrouedandreresentedthroughthemes

and"trateg#!as."ecurestrateg#8undingisa%sodonehere.


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3* A%igntheOrgani6ationwiththe"trateg#

$he os BT' shou%d the=Ne a%ig=ed a=d FasFaded to the Busi=ess 0=its a=d

the "uorting"ervice0nitsanddowntothem%o#eesothateachunitor

em%o#eewi%%haveaB"'thatmeasurestheirer8ormance&?a%anorton

1--,(thedetai%so8thecascadinganda%ignmentwi%%becoveredinsection4.,.

4* P%anOerations

$hisinc%udestheintroductiono8e#rocessimrovementstocoewiththe

strategicmeasuresandtargets.

)* !onitorandLearn

$heeecutionismonitored8or8eedbacandbettercontro%through"trateg#

reviewandOeratingreviewmeetings.

,* $estandAdatthe"trateg#

Basedontheeecutioner8ormanceandthe8eedbacgatheredtheemerging

strategieswi%%getthechancetobeconsidered.


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$ig%re

.0:

he

'anagement

system:

*in+ing

Strategy

to

,perations

(Kaplan

&

orton00-)p.-#

-&&

Projects8Strategy

Alignment

)hallenges

!i%osevic"rivannaboon&2//,(Verner7u#uan&2/12(and;ics!ose%e#

&2/11(high%ightedthee#cha%%engesthat8aceorgani6ationwhi%ethe#tr#to

a%ignrojectstostrateg#:

1. Projectmanagementrocessesarenota%ignedwithstrateg#eecutionrocesses.

2. ProjectsgetstartedandgetterminatedwithoutstrategicinWuencebut

main%#basedonresourcesavai%abi%it#.

3. Projectsgettreatede9ua%%#andtheirstrategicweightandimactisnotconsidered.


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4. Project*%eve%goa%sdonotreresenttheessenceo8thestrategic

objectivesU suchasseedtomaretU andma#disso%veamongother

rojectconstraints.

). Projectteamsma#notunderstandthestrategicva%ueo8therojectandits

contetintheorgani6ationa%strateg#andma#not8ee%theimortanceo8theirro%esin"trateg#eecution.

,. Projectsaregrouedinrogramsandort8o%iosinawa#thatdonotmatch

withthe"trateg#eecutionmonitoringandreorting.

-&&

Projects8Strategy

Alignment

using

BS)

Inordertounderstandthea%ignmento8rojectswiththeorgani6ationstrateg#we

havetorememberwhatwementionedear%ierinthattherojectsareconcernedto

meettheagreedre9uirementorobjectivesCthere8oreweneedtoensurethatthese

objectivesthattherojectisundertaentoaccom%isharea%ignedwiththe

organi6ation>s B"'strategicobjectivesmeasuresandtargets.Oncethisa%ignment

isconDrmedwewi%%thendiscusshowtoa%ignthesuggestedinitiativesorrojectsto

thecascadedstrategicobjectivesmeasuresandtargets.A8terwardsanetraste

ma#beer8ormedwhichiscreatingaB"'8oreachrojecttoensurethattheroject

itse%8iscontributingtothe8ourB"'ersectivesandthatwi%%bemaintained

throughouttheroject%i8ec#c%etoreortroject

er8ormance.


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$ig%re.0:/lignmental%e:nterpriseDerivedand2%stomerDerived(3alladi%m01)2hapter4 p.-#


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-&&1&

Alignment

and

)ascading

,bjectives$

#easures

and

Targets

-&&1&1&

)ascading

#ethods

Asdescribedin7igure3./andasdetai%edinthe&Pa%%adium2/12(the'ascadingmethodsareo83t#es

* !dentical

$heIdentica%cascadingmethodisusedwhenthecororateB"'strateg#objectivesarethesame8orthe

"ubBusiness0nits&"B0(andthisisusua%%#whenthe#areoerationa%%#simi%ar.

* )ontributory

$he'ontributor#cascadingmethodisusedwhensomeo8the"B0B"'strateg#

objectivescontributetothecororateB"'butthe#arenotidentica%.

* 9e"

$heewcascadingmethodisusedwhensomeo8the"B0B"'strateg#objectives

werenota%icab%eor%inedtothecororateB"'.


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MGT502 Project, Programme and Portfolio Management Student ID 120061$ig%re

6.0:

2ascade

'ethods

,vervie7

(3alladi%m01)2hapter4 p.(.#


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-&&1&2& Alignmentand)ascadingtoSubBusinessUnits3SBU4andits

Departments

esitethemethodthatwi%%beusedwhether&Identica%'ontributingorew(the

'ororateB"'needstobecascadeddowntoa%%its"ubBusiness0nits&B"0(and

thentothedeartmentswithineach"B0andthentosma%%erorgani6ationa%unitsi8

needed&Pa%%adium2/12(.7igure4./i%%ustratesaossib%esFe=a


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-&&1&*& Alignmentand)ascadingtoSupportUnitsand

its

Departments

;istorica%%#"uortunitsweretreatedaseensecentersthataret#ica%overheaddeartmentsandtheirobjectiveisa%wa#ssettoreducetheiroerating

eenses&?a%anorton2//+(.

Pa%%adium&2/12(high%ightedmajorbeneDtsreturned8romB"'A%ignmenton"B0and"uort0nit:

U"ame%anguageQtermino%og#

U'%arit#o8strategicdirection

Uasi%Ou=des a=d Fo=side


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ersectives&7inancia%'ustomerandInterna%(and

whattheorgani6ation%acsintermso8cometenciesandsi%%swhichshou%dbecoveredinthe

Learningand@rowthersectiveCthere8orethePer8ormancemode%andaccordingtothebui%t


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"trateg#!awi%%inc%udethecometenciesre9uiredtoachievethe"trategic

$argetssetintheinterna%Persective.7igure,./rovidesaneam%eo8the

Per8ormance!ode%.

$ig%re

".0:

B%ilding

the

3erformance

'odel:'an%fact%ring

xample

(3alladi%m01)2hapter4 p.--#BasedonthecometenciesidentiDedin

thePer8ormancemode%thePersona%B"'wi%%inc%ude%inagetotheBusiness

"corecardsandwi%%%insetthePersona%Objectivesaccordingtothedeve%oed

er8ormancemode%.7igure5./rovidesatem%ate8oraersona%"corecard.


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MGT502 Project, Programme and Portfolio Management Student ID 120061$ig%re

;.0:

3ersonal

Scorecard

emplate

(3alladi%m

01)

2hapter

4 p.

101#


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-&&2&

!nitiatives

Alignment

?a%a=a=d o


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wi%%eecutestrateg#buti8theirer8ormancemeasuresandtargetsaretieduwithstrateg#measures


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andtargetsthe#wi%%beacttoachievetheiraraisa%er8ormancetargetswhich

meansthatthe#wortowardsstrateg#eecution.

;ics!ose%e#&2/11(high%ightedanotherimortant8actor8orsuccess8u%roject*

strateg#a%ignmenteerciseitistheavai%abi%it#o8B"'Per8ormanceImrovement

ractitionerswhosuortthestrateg#and8aci%itateadherencetothea%ignmentC

there8oreineachrojectandim%ementationo8ever#initiativeractitioners> ro%e

evo%vetogainwin*winso%utions8ortheorgani6ationdivisionsdeartmentsand

individua%sthroughguidanceandcontinuoussuort.

Incomarisontothea%ignment8ramewordeve%oedb#!i%osevic.\.

"rivannaboon&2//,(itis8oundthattheir8rameworcomesbehindtheB"'inone

e%ement&$he'ascadinge%ement(and%eadstheB"'in3e%ements&"coringPhase

@atesand$ermino%og#(.$heir8rameworisjustdeendentonthea%ignment

betweeneachrojectandtheo strateg#withoutthecascadinge%ementto

beconsideredontheotherhandtheB"'8a%%sbehindintheProjects"coringasit

doesnotdetai%howtherojectsscoringwi%%bedonewhi%ethe!i%osevic.\.

"rivannaboon&2//,(a%ignment8ramewordetai%sthe,P!e%ements&"trateg#

Organi6ationrocess$oo%s!etricsand'u%ture(8orscoringandweightingthe

rojects.$heB"'a%sodoesnotdetai%oren8orcethePhasegatesonroject

managementa%ignmentwhi%e!i%osevic.\."rivannaboon&2//,(integratesthat

inthea%ignment8ramewor.

$hetermino%og#usedintheB"'toreresenttherojectsandrogramsasinitiative

hascreatedacon8usiontoa%igntotheProject!anagement8rameworsaseach

e%ementhasadi88erentmethodo%og#tobemanagedandtogetita%ignedwhi%ethe

B"'dea%swithbotho8theminthesamemannerandjustca%%theminitiatives.

InagoodattemttointegratethenterriseProjectPort8o%io!anagement&PP!(

"#stemwiththeBa%anced"corecardtoachievethes#nerg#anda%ignmentbetween

therojectsandthestrateg#?oste%acSuomanovicIonic&2/12(have8oundthatmanagersinarojecti6edstructureorgani6ationcanbeneDt8romtheintegrating

bothmode%smuchmorethanim%ementingoneo8themtoachievearoriate

strategiccontro%s#stem8orroject*strateg#a%ignment.IndeedtheB"'wi%%needto

besuortedb#theintegrationwithaProjectmanagementmethodo%og#inorderto

ensurearoriateroject*strateg#a%ignment.?a%anorton&2//+(hasrea%i6ed


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thedrawbaco8theorigina%B"'innotaddressingtheort8o%iomanagementC

there8orethe#haveaddressedtheort8o%iointhe%atestudates


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o8 the BT' NOusi=g the te


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a%ignmentwitheistingwe%%estab%ishedrojectmanagementracticesand

termino%og#.


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2626 | P a g e


& 7uture+esearch

$heusageo8theBa%anced"corecardhasincreasedsigni8icant%#inthe0A

organi6ationsesecia%%#governmenta%organi6ations."omeo8themhavemajor

successesandthe#aearintheast8ew#earsinthewho%e*o8*8amethatregisters

success8u%im%ementationso8B"'wor%d*wide.

$othebestnow%edgeo8theresearchertherewerenoresearchesthataddress

therojects*strateg#a%ignmentthroughtheBa%anced"corecardinthe0A

organi6ations.Itwi%%beaninterestingtoico8researchthatma#consider

9ua%itativeand9uantitativetechni9ues.

& +e%erences

AP!&2/12(Bodyo#nowledge.,thedn.;ighV#combe:Association8orProject!anagement.

B",/5-*1&2/1/(.$roject%anagement& $art()$rojectmanagement.$rinciples

and

guidelines

or

the

management

o

projects!i%ton?e#nes:British"tandard

Institution.

7rigo!.L.&2/12(.$heBa%anced"corecard:2/^earsand'ounting.Strategic

Finance.October.4-*)[email protected]//).$roject%anagement)*Strategic

$lanning

*pproachew^or:Pa%grave.

;ics?.!ose%e#_.&2/11(.eve%oingandeecutingstrateg#:0singthe

ba%ancedscorecard8ora%ignmentandaccountabi%it#.$erormance

"mprovementvo%.)/&+(.41*45.

?a%anR.".andorton.P.1--,.TheBalancedScorecard)TranslatingStrategy

into

*ctionBoston:;arvardBusinessReviewPress.

?a%anR.".andorton.P.2//1.TheStrategyFocused+rgani!ation)ow

Balanced

Scorecard

companies

thrive

in

the

new

Business

-nvironment


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Boston:;arvardBusinessReviewPress.

?a%anR.".andorton.P.2//4.Strategy%aps)Convertingintangibleassetsinto

tangibleoutcomesBoston:;arvardBusinessReviewPress.


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?a%anR.".andorton.P.2//,.*lignment)singtheBalancedScorecardtocreate

Corporate

SynergiesBoston:;arvardBusiness"choo%Press.

?a%anR.".andorton.P.2//+.The-/ecution$remium)0inkingStrategyto

+perations

or

Competitive*dvantageBoston:;arvardBusinessPress.

?e#es_.&2/11(."mplementing

the

$roject

%anagement

Balanced

Scorecard,

Boca

Raton:'R'Press.?oste%ac.Suomanovic!.Ionic!.&2/12(.Integrating

nterriseProjectPOrt8o%io!anagement

withtheBa%anced"corecard:a'ase8romthePharmaceutica%industr#.Technical1a!ettevo%.1-&2(.

2/2*31,.

Levine;.A.2//).$roject$ortolio%anagement)*$ractical1uidetoselecting$rojects,%anaging

$ortolios,

and

ma/imi!ing

beneits"an7rancisco:_osse#*Bass.

!i%osevic.\."rivannaboon".&2//,(.A$heoretica%7ramewor8ora%igning

Project!anagementwithBusiness"trateg#.$roject%anagement2ournalvo%.

35&3(.-+*11/.

Pa%%adium2/12.$alladium

#aplan34orton

Balanced

Scorecard

Certifcation

Boot

CampPa%%adium@rou

Inc.

P!I&2//+(*1uidetothe$roject%anagementBodyo#nowledge5$%B+#

1uide6.4thedn.Penns#%vania:Project!anagementInstitute.

Ranins@._.&2//,(.A%igningProjectsto"trateg#usingBa%anced"corecardsand

BeneDts!ode%s.Paerresentedatthe3rdInternationa%'on8erenceonProject

!anagementon2-"etember2//,in"#dne#Austra%ia.

Vard_.Peard_.&2//2(.Strategic$lanningor"normationSystems.3rdedn.Vest"usse:_ohn

Vi%%e#"ons.

Verner!.7u#uan`.&2/12(.ecuting"trateg#withtheBa%anced"corecard.


34/34


"nternational

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+Financial7esearchvo%.3&1(.++*-4.

Documents

Ibrahim Awad - PPPM - Aligning Projects With Strategy Through Balanced Scorecard v5.0-Libre