MANAJEMEN PROYEK

MAGISTER MANAJEMEN TEKNOLOGI

INSTITUT TEKNOLOGI SEPULUH NOPEMBER SURABAYA
Where We Are Now

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13
 Why Project Managers Need to Understand
the Strategic Management Process

Traditional Role-> planning and execution of project

Modern Role -> to achieve business result and winning
the market place (strategic perspective)

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Why Project Managers Need to Understand the
Strategic Management Process

Mistakes caused by not understanding the role of

projects in accomplishing strategy:
Focusing on problems or solutions with low
strategic priority.
Focusing on the immediate customer rather
than the whole market place and value chain.
Trying
to solve every customer issues with a
product or service rather than focusing on the
20% with 80% of the value (Paretos Law).
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 Strategic management is the
process of:

Assessing what we are

Deciding and implementing
what we intend to be
How are going to get there
The Strategic Management Process:
An Overview

Provides theme and focus of firms future direction.

Respondingto changes in the external
environmentenvironmental scanning
Allocatingscarce resources of the firm to improve
its competitive positioninternal responses to new
programs
Requires and ensure every project to be clearly linked
to strategy.
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Strategic
Management
Process

FIGURE 2.1
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Closely linked
toward future Mission
sucess of General
organization purpose

Goals
Implemen
-tation Global
(via target
projects) within
Strategic mission
Management

Objectives
Strategy Specific
To reach target to
objective goals
Mission
General
purpose Review and Define organization
mission

Mission statement communicates and identifies

the purpose of the organization to all
stakeholder
Mission statement changes infrequently (when
nature of business is shifted/changed)
Need to specific -> set parameter for
developing objectives
 112

Mission of Apple computer

Apple is commited to bringing the best
personal computeing experience to students,
educators, creative profesionnals and
consumer around the world through innovative
hardware , software and internet offerings
Goals
Global
target 113
within
mission
Objectives
Specific
Set Long range Goal and
target to
goals Objectives

Objectives translate mission into specific, concrete

and measurable terms
Set target for all level of organization (low level
support higher level)
Covers markets, products, innovation, productivity,
qualitiy, finance, profitability, employees and
consumers
Include time frame, be measurable, be realistics
 Characteristics of Objectives

S Specific Be specific in targeting an objective

M Measurable Establish a measurable indicator(s) of progress

A Assignable Make the objective assignable to one person

for completion

R Realistic State what can realistically be done with

available resources

T Time related State when the objective can be achieved,

that is, duration EXHIBIT 2.1
214
Strategy
To reach 115
objective
Implemen Implement strategies through
-tation
(via projects
projects)

How strategies will be realized:

1. Allocation of resources (fund, people,
management talents, technological skills, and
equipment)
2. Formal and informal organization that
complements and support strategy projects
3. Planning and control system to ensure strategies
are effectively performed
4. Motivation for project contributors
 1
16
Company objective Example
(PT TELKOM)
 117
Company objective Example
(PT TELKOM)
 118
Company objective Example
(PT WIKA)
 119
Company objective Example
(PT WIKA)
 120
Company objective Example
(PT WIKA)
 121
Company objective Example
(PT WIKA)
 122
Project Portfolio Management
System

Why is needed?
Aimingat aligning project with strategic
goal and prioritized appropriately system.
Nostrong priority system linked to strategy
create problems
Benefits of Project Portfolio Management

Builds discipline into the project selection process.

Links project selection to strategic metrics.
Prioritizes project proposals across a common set of
criteria, rather than on politics or emotion.
Allocates resources to projects that align with strategic
direction.
Balances risk across all projects.
Justifies killing projects that do not support strategy.
Improves communication and supports agreement on
project goals. EXHIBIT 2.2
226
 Portfolio of Projects by Type

Needed to meet regulatory

conditions or emergency

Needed to support organizations long Needed to support current

run mission, aim to increasing operations, to improve
revenue and market share, (e.q NPD) performance (e.q TQM)
Project Screening
Process

FIGURE 2.5
229
 A Portfolio Management
System

Selection Criteria
Financial (when high level of confidence
with estimation of future cash flow):
payback, net present value (NPV), internal
rate of return (IRR)
Non-financial:
projects of strategic
importance to the firm (imposible to
measure)
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 Financial Models

The Payback Model

Measures the time the project will take to recover
the project investment.
Uses more desirable shorter paybacks.
Emphasizes cash flows, a key factor in business.
Limitations of Payback:
Ignores the time value of money.
Does not consider profitability.

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 Financial Models (contd)

The Net Present Value (NPV) model

Uses managements minimum desired rate-of-return
(discount rate) to compute the present value of all
net cash inflows.
Positive NPV: project meets minimum desired rate
of return and is eligible for further consideration.
Negative NPV: project is rejected.

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Example Comparing Two Projects
Using Payback Method

EXHIBIT 2.3a
233
Example Comparing Two Projects
Using Net Present Value Method

EXHIBIT 2.3b
234
 Nonfinancial Strategic Criteria

To capture larger market share

To make it difficult for competitors to enter the market
To develop an enabler product, which by its introduction
will increase sales in more profitable products
To develop core technology that will be used in next-
generation products
To reduce dependency on unreliable suppliers
To prevent government intervention and regulation
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 136
Multicriteria Selection Models

No single model can reflect strategic

significance, multiple criteria needed

Checklist Model
Uses a list of questions to review potential projects
and to determine their acceptance or rejection.
Fails to answer the relative importance or value of a
potential project and doesnt to allow for
comparison with other potential projects.
Project Screening Matrix project scoring
matrix

FIGURE 2.3
240
Project Portfolio Matrix

capitalize
balance

eliminate balance

FIGURE 2.7
242
 Project Portfolio Matrix
Dimensions
Bread-and-butter Projects
Involve evolutionary improvements to current products and services.
Ex : software upgrade and manufacturing cost reduction efforts
Pearls
Represent revolutionary commercial opportunities using proven
technical advances.
Ex : next generation integrated circuit chip and subsurface imaging to
locate oil and gas.
Oysters
Involve technological breakthroughs with high commercial payoffs.
Ex : embryonic DNA treatment and new kinds of metal alloys.
White Elephants
Showed promise at one time but are no longer viable.
Ex : product for saturated market.

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 Key Terms

Implementation gap
Net present value
Organizational politics
Payback
Priority system
Priority team
Project portfolio
Project screening matrix
Project sponsor
Sacred cow
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Strategic management process
SOURCE

Larson, E.W. & Gray, C.F (2008). Project Management: The

Managerial Process (5e). New York: McGraw-Hill/Irwin. Chapter 2