Coping with the need to quickly make decisions while ensuring they will have only positive impacts on the strategy has become one of the organization’s major challenges.
Successful decisions can be made when a well-structured and systematized process describing indicators and their impact on strategy is available.
The dashboards are graphic forms representing aspects of the company performance, displaying the KPIs (Key Performance Indicators).
The dashboards are used by companies to follow up results and its strategy implementation indicators. Our approach is precisely to support organizations to identify and cascade the key indicators by building dashboards linked to the strategy.
Organizations must create a consistent, shared and common process which places strategy at the center of project management, as the exhibit in the next slide shows.
From our stand point, a strategic project is simply an intervention aiming to close a gap between performance and strategic priority. To this end, some questions must be asked:
- How different are the resources allocated for strategic projects and those allocated for operational cycle (business as usual)?
- What is the process for selecting and allocating resources for strategic projects like?
- How is the set of approved strategic projects managed and funded/sponsored?
- What are the criteria for selecting and funding strategic projects?
- How often does the company review and approve strategic projects?
- How do executives take on the responsibility for and sponsor strategic projects?
This approach aims to integrate the Project Management Office - PMO and strategy management in order to facilitate project identification, selection and prioritization for portfolio updates.
Outstanding major benefits are:
- Make strategy guide decision making, applying the most consistent and relevant information;
- Establish a prioritization and selection process to ensure the selection of strategically aligned and high return projects;
- Promote savings by eliminating projects which do not add value;
- Ensure effective project implementation by allocating resources efficiently, responding quickly and adopting a standard process for project management;
- Increase the number of ideas for strategically focused projects that close performance gaps.
According to KPMG (2004), 95% of the companies worldwide carry out budgeting. Out of these, 5% do so with alternative processes. Over 95% of the companies registering sales above US$ 1 billion take longer than 2 months to develop their budgeting and 58% of them are aware of the need to phase out the traditional budgeting process. Budgeting is them an elaborate, complex, rigid that sets short-term targets which are incompatible with the atemporal fluidity demanded by the strategy hypothesis. The question raised is: how to conciliate budgeting and strategy premises?
We understand that budgeting should be simple, less focused on control and more oriented to projections. Meeting targets should be less relevant than applying resources based on best available information. However, the major challenge lies less in the process and more in the culture.
