PROJECT PLANNING (CONTD.):Identifying Strategic Project Variables, Competitive Resources

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Project Management MGMT627

LESSON 19

PROJECT PLANNING (CONTD.)

Broad Contents

Identifying Strategic Project Variables

19.1

Identifying Strategic Project Variables:

The project manager must continually monitor the external environment in order to develop a

well-structured program that can stand up under pressure (for long-range or strategic projects).

These environmental factors play an integral part in planning. The project manager must be able

to identify and evaluate these strategic variables in terms of the future posture of the

organization with regard to constraints on existing resources.

As we know that in the project environment, strategic project planning is performed at the

horizontal hierarchy level, with final approval by upper-level management. There are three

basic guidelines for strategic project planning:

It is extremely important that upper-level management maintain a close involvement with

project teams, especially during the planning phase.

Successful strategic planning must define the authority, responsibility, and roles of the

strategic planning personnel.

Strategic project planning is a job that should be performed by managers, not for them.

In order to ensure the success of the project, all members of the horizontal team must be aware

of those strategic variables that can influence the success or failure of the project plan. The

analysis begins with the environment, subdivided as internal, external, and competitive, as

shown below:

· Internal Environment

· Management skills

· Resources

· Wage and salary levels

· Government freeze on jobs

· Minority groups

· Layoffs

· Sales forecasts

· External Environment

· Legal

· Political

· Social

· Economic

· Technological

· Competitive Environment

· Industry characteristics

· Company requirements and goals

· Competitive history

· Present competitive activity

· Competitive planning

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-- Return on investment

-- Market share

-- Size and variety of product lines

· Competitive Resources

It is important to note here that once the environmental variables are defined, the planning

process continues with the following:

Identification of company strengths and weaknesses

Understanding personal values of top management

Identification of opportunities

Definition of product market

Identification of competitive edge

Establishment of goals, objectives, and standards

Identification of resource deployment

At the program level, complete identification of all strategic variables is not easily obtainable.

However, internal, or operating, variables are readily available to program personnel by virtue

of the structure of the organization. The external variables are normally tracked under the

perceptive eyes of top management. This presents a challenge for the organization of the

system. In most cases, those in the horizontal hierarchy of a program are more interested in the

current operational plan than in external factors and tend to become isolated from the

environment after the program begins, losing insight into factors influencing the rapidly

changing external variables in the process. Proper identification of these strategic variables

requires that communication channels be established between top management and the project

office.

It is essential that the top-management support must be available for identification of strategic

planning variables so that effective decision making can occur at the program level. The

participation of top management in this regard has not been easy to implement. Many top-level

officers consider this process a relinquishment of some of their powers and choose to retain

strategic variable identification for the top levels of management.

It is important to note here that the systems approach to management does not attempt to

decrease top management's role in strategic decision-making. The maturity, intellect, and

wisdom of top management cannot be replaced. Ultimately, decision-making will always rest at

the upper levels of management, regardless of the organizational structure.

Therefore, identification and classification of the strategic variables are necessary to establish

relative emphasis, priorities, and selectivity among the alternatives, to anticipate the

unexpected, and to determine the restraints and limitations of the program. Universal

classification systems are nonexistent because of the varied nature of organizations and projects.

However, variables can be roughly categorized as internal and external, as shown in Table 19.1

below.

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Project Management MGMT627

Table 19.1: Strategic Planning Variables in the Tire Industry

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