Johnson discussed how to close the gap between strategy and projects in his previous article, titled?Close The Gap Between Projects and Strategy? We now look at an article from Breakthrough Performance Management that relates performance metrics to business strategies.
Executive managers demand reports that include performance measures. Dashboards and scorecards are used to display key performance indicators or technical information. This is a way for executives to assess the health of their strategic plan. This article highlights the problem with many organizations. They have a disconnect between corporate strategies and their day-to-day activities. Organizations can measure performance but cannot manage it.
Breakthrough Business Performance reveals that poor strategy execution can be caused by poor definition, non-tangible, poorly communicated, and measurement that is not focused on key drivers. Organizations are encouraged to develop a discipline that links strategy execution and key business processes by managing 1) objectives, 2) initiatives; 3) resources, 4), risks, and 5). Organizations can manage their performance by linking performance metrics, initiatives and resources to strategic objectives.
EVM (Earned Value Management) is required for certain projects to manage large-scale high-risk endeavors. EVM is a method that integrates scope, budget, and schedule and uses objective performance indicators to monitor progress. There are two types, discrete and level of effort. The administrative support, such as general project management or other overhead functions, is often considered level of effort. Discrete effort refers to the more tangible key drivers and objectives that are required for the accomplishment of the endeavor’s end. To ensure that earned value management systems are well-designed, responsible control account managers must clearly define the initiatives and include the specific objectives in a work breakdown structure dictionary. You will also find high-level risks and assumptions that could impact the outcome in the dictionary. The resources are presented as a basis for estimate artifact which explains the reasons behind the costs associated with the initiatives. As the basis for performance, all of the relevant scope, schedule and cost artifacts can be captured in one project management plan.
Organizations can use project management software tools like Primavera P6, Deltek Cobra and other enterprise systems to achieve a more formal way of measuring and managing their performance. However, organizations must also invest in specialists to manage and maintain the specialty tool sets. The key is to strike the right balance between management and measurements. Project managers can wear many hats throughout the lifecycle of a project, including integration management.
Refer to
Breakthrough Performance Management: Using Performance Metrics to Improve Business Strategy
(2005, January). Retrieved October 12, 2008 from EBSCO MegaFILEdatabase.
