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Strategic Management of Projects

  • Abrachan

    • Every project is unique. There could be many similarities among projects, yet no two projects are similar. Therefore  to achieve the project goals in the most optimal way, one need to develop the project’s strategy first. The project’s strategy is at the apex of planning, execution, monitoring and controlling. Strategic management of projects is driven by several subsidiary project strategies as shown in the mind map below.

    Integrated Project Strategy Mind Map

    1. Request for proposal strategy  

    How do we decide on the structure and the depth of content of the ‘Request for Proposal’ (RFP). What is the rationale behind it? Who will do it? The first dilemma one will face during the RFP stage is about choosing between the problem and the solution. If the intent is to get as many diverse solutions as possible, then one should stop with the problem statement whereas, if the intent is to get comparable proposals then one should include the solution in the RFP, so that vendors can blindly submit their proposals for that particular solutions. 

    Example 

    For example, if our intent is to receive as many designs as possible and their associated costs, then our RFP should stop with a very high-level description like;  

    “We want to construct our dream house in the suburbs of the city which can accommodate 4 to 5 people most of the time. During special occasions, this may even go up to 10. The budget of the house should be less than 50 lakh Indian rupees and the location is in South India with heavy rains during the monsoon season and very warm and humid during summertime“ 

    In this case, we are giving ample space for the suppliers to use their creativity, so that we can choose from a very diverse set of offerings. 

    On the contrary, if our intent is to receive comparable quotes against a standard solution specification, then we must get the detailed design done with the help of an architect and then include the detailed drawing in the RFP, so that all the vendors will quote against the same standard solution. 

    2. Contracting strategy  

    At the basic level, we have four types of contracts. They are;

    the cost reimbursable contracts, fixed price, time and material and the purchase order. All of these have different variants.  

    For example, the cost reimbursable contracts can be; 

    So is the case with fixed price contracts. The permutation combinations of these variants provide us with several options to choose from. How do we do these selections of the appropriate contract types for specific types of work? That has a direct bonding to risk management.  

    For example, all cost reimbursable contracts protects the supplier from loss, whereas the cost risk is higher for the buyer. In a similar way, the fixed price contracts protect the buyer from cost overruns. At the same time, the cost risk higher for the seller. 

    As we can see, the contracting strategy is intertwined with the cost risk management strategy. However, one does not become really smart if major risks are pushed down the throat of the supplier. If the supplier goes bankrupt, what do we do?. It is going to impact the project negatively. Hence it is advisable to spend enough time to decide on win-win contracting strategies for the success of the project. 

    3. Stakeholder management strategy  

    Who is a project stakeholder? “Anybody affected by the project positively or negatively” is a stakeholder. Even though the heading above is stakeholder management strategy, the term ‘Stakeholder’s expectation management strategy’ could have been more appropriate.  

    Let us consider the proposed oil pipeline project from Iran to India. This proposed pipeline project crosses the countries Afghanistan and Pakistan. No one need to specify the political conflicts among and within these countries. Identification of the stakeholders, prioritizing them and then developing appropriate strategies to manage these stakeholders need forethought.  

    The following steps will help you to develop appropriate strategies to deal with project stakeholders; 

    Steps to develop stakeholder management strategy

    Group the negative forces acting against the project success together on the order of their impact.

    Group the positive forces supporting the project success together on the order of their impact.  

    Develop strategies to negate the negatives and to strengthen the positives  

    4. Construction / Development strategy  

    There are multiple ways of achieving the same project results. Some of them are faster and expensive, whereas some others could be slower and inexpensive. The process of choosing the optimal engineering processes to meet the project’s triple constraints of time, cost and scope is known as the project’s development strategy.  

    “Large scale usage of prefabricated components helped us to fast track the schedule. That helped us to meet the aggressive deadline. Decision to adopt an online integrated agile monitoring and control system helped us to do concurrent engineering from five different locations resulting in on time delivery with quality. Since the client himself was not sure about the requirements, we did rapid prototyping for requirements elicitation. This helped us to bring in lot of clarity about project requirements.” 

    These are some of the examples of the power of the right project development strategy. Project development strategies can either make or break your project. What is the sanctity of signing a fixed price contract with a client who does not have clarity about project requirements? 

    Here are some of the development project strategy thoughts for you; 

    5. Quality Strategy  

    “Whatever can go wrong will go wrong”. This famous adage (Murphy’s law) is of great value while planning to achieve quality. Bad things happen automatically. Good things must be achieved through meticulous planning. How do we really achieve the quality goals of the project? The quality strategy answers this question.  

    Historical data of past projects is a great input for defining the quality strategy. For example, defects per square feet data from historical database will help us to forecast the anticipated defects in the current project. If we know the yield of the inspection process, then we can figure out how many hours of inspection is required to detect the forecasted number of defects. Quality strategy will help us to conclude on the type, timing of quality assurance and quality control activities to be performed to achieve the quality goals of the project in the most efficient manner. 

    6. Risk management strategy  

    Avoidance, acceptance, management and transference are the four basic risk management strategies.  If the project is too risky, then do not pursue that project. This is an example of risk avoidance.  Deciding to subcontract a complex component is an example of risk transference. So is the case with taking an insurance where the financial risk gets transferred to the insurance company. The project is too risky, still we are going ahead with it, this is an example of risk acceptance. Risk management is all about reducing the cumulative impact of the risk either by reducing the probability of the risk happening or by reducing the impact or by both.  

    Risk management starts with the identification of the probable risks and then prioritizing them based on their probability of occurrence and impact.  How to manage these risks optimally is addressed by developing appropriate risk management strategies.   

    7. Procurement strategy  

    How to get the right material at the right time at the right cost is addressed by developing appropriate procurement strategies.  

    Project’s procurement strategy addresses the following; 

    8. Communications strategy  

    Push Vs Pull – How are we going to share the project information with relevant stakeholders. Should we send the information, or will they visit the project portal or dashboard and see the project information. Will it be multilingual? How do we deal with different time zones and distributed teams? A well thought out project communication strategy addresses these key questions, so that the project’s communication plan can be built in accordance to the communications strategy. 

    9. Monitoring & Controlling Strategy

    Seek answers to;

    10. Human resource strategy  

    From where to get the manpower? How to get the manpower? Visa processing? Training, Accommodation, Local conveyance, Safety standards. Sometimes the project managers are even empowered to go acquire a company for mobilizing resources quickly. How do we train the new recruits? Will it be on the job training? Will we pair them with experienced workers to train them quickly? How much should be the probation period? A well-defined HR strategy defines these. 

    11. Closing Strategy

    Should we go for a big bang release of the product of the project or should we focus on interim releases?. Both have their own advantages and disadvantages. If we choose to do a big bang release, the customer will get to see the product of the project only at the end of the project. That poses scope and quality risks for the customer. In the case of interim releases, the end user gets opportunities to use the product of the project very early in the life cycle. This will result in better functional risk management.

    Conclusion 

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