Why do organizations launch and run projects? Obviously, because they intend to derive benefits from their initiatives—whether those are financial gains, new market opportunities, employee productivity, or any other positive business outcomes.
But all project benefits are not equal for a given company. A discount retailer typically cares less about an initiative to establish a high-end, premium brand image and more about a cost-oriented project. And a startup probably won’t need an organizational culture framework as much as a large global corporation.
To make a long story short, C-suite and project portfolio management professionals should ensure the initiatives they invest in meet their organization’s overarching strategic goals. Aligning project and portfolio management with business strategies can help you gain a competitive advantage and and stay ahead of the curve.
Why it is critical to align project management with business strategies
Ensuring that every project is aligned with overarching business goals helps to future-proof an organization and drive more growth, efficiency, and innovation. Strategy-aligned project organizations have report. Strategy-aligned project organizations report benefits across the board, including:
- Efficient resource allocation: Without alignment, projects can diverge from core business objectives, resulting in wasted resources. Closely aligning project management with business goals makes it easier to allocate resources effectively, ensuring that the right people and funds are directed toward the most impactful initiatives.
- Improved decision-making: Strategic alignment ensures that decisions are made with the organization’s long-term goals in mind, leading to smarter, more informed choices. Optimizing decision-making is of particular importance when building or reviewing project portfolios.
- Business sustainability and long-term value: By aligning projects and portfolios with their overarching business strategies, organizations ensure initiatives contribute to creating long-term strategic value rather than just short-term gains.
With strategy-aligned projects, the efforts and resources invested in initiatives directly contribute to the goals of the organization. By maintaining this alignment across all projects and portfolios, businesses can prioritize investments that offer the highest value and have all teams work towards a unified vision.
Best practices to align projects with business strategies
Whether managing an IT initiative, launching a new product, or optimizing operations, strategically-minded decision-makers should maintain a clear definition of business goals, have strict criteria for project selection, ensure data-driven ongoing monitoring, and seek leadership buy-in.
Clearly define business goals and objectives
Successful project alignment starts with understanding the organization’s strategic goals and objectives. Before selecting and initiating any projects, decision-makers should clearly articulate what the organization aims to achieve, both in the short and long term.
For example, a business looking to enhance customer satisfaction through digitalization should ensure that IT projects and resources are directed toward creating customer-centric solutions that align with this overall business goal.
Case in point: TotalEnergies, a leader in the global energy market, has set a course to reduce carbon emissions by 25% and methane emissions by 80% by 2030. One of the biggest challenges they faced, leading them to invest in PPM software solution, was aligning a billion-dollar portfolio with these environmental priorities. Planisware’s PPM solution has helped the global corporation meet its sustainability objectives and effectively allocate resources to the most strategically-valuable activities.
Planisware allows us to deliver high-value projects on time and within budget, maximizing our global reach and impact.
— Frederic Calderini, Product Owner at TotalEnergies
Planning and prioritizing initiatives based on business strategy is a top-down approach to project and portfolio management (as opposed to a bottom-up approach, where project initiatives guide strategic planning). This is one of the foundations of strategic portfolio management (SPM).
There are many actionable ways for leaders to gather insights and start defining these business goals with clarity, including:
- executive strategy workshops, which can bring together senior leaders to review market trends, performance metrics, and the organization’s long-term vision
- SWOT or OKR frameworks with the goal of evaluating strengths, weaknesses, opportunities, and risks—then translating these into measurable strategic objectives
- analysis of performance data and market intelligence to give real-world, up-to-date context to strategic goal-setting—possibly with use of integrated PPM software solutions
Select projects wisely—and strategically
Once you clearly understand the business strategy, the next step is to establish clear criteria for selecting projects that will contribute to these objectives. Projects directly aligned with strategic goals should take priority, while those that offer limited strategic value can be postponed or canceled.
To do so, PMOs should create a project portfolio management framework that evaluates potential projects based on how well they align with business objectives. This framework ensures that only high-impact projects are executed, allowing the organization to successfully navigate shifts in the market landscape and technology to maintain its competitive edge.
Strategic portfolio management tools can prove instrumental in defining and maintaining strategic project selection criteria. These tools facilitate the selection and prioritization of strategy-fit projects with a number of features and capabilities, including:
- scoring and prioritization models to help evaluate and rank projects based on standardized criteria such as strategic fit, expected ROI, risk level, and resource needs
- strategic alignment dashboards to provide visual clarity on how each project or portfolio contributes to high-level business goals
- “what-if” scenario analysis tools to empower decision-makers to model different project combinations and resource allocations, helping assess the impact of trade-offs of pursuing or pausing initiatives
- portfolio heat maps and bubble charts to allow leaders to visually compare projects by value, cost, and risk to quickly identify which initiatives offer the highest strategic return and which may be misaligned or low-impact.
Woodward is a leading provider of energy control solutions for the aerospace and industrial markets. Their adoption of a new software solution is a great example of success in aligning every project management operation under a single, coherent strategy.
Monitor alignment with business strategy throughout project execution
After kick-off, key performance indicators can help measure the progress of the project and its alignment with business goals, ensuring strategic fitness at every stage.
Organizations should implement a robust project tracking system that integrates performance data and strategic KPIs. In addition to fostering ongoing alignment, this will give teams the tools they need to adjust course when necessary.
This is another aspect of strategic alignment where software solutions can add real value. These tools help PMOs ensure that project managers can make data-driven adjustments in real-time. and that each project supports the company’s vision. Features and capabilities that facilitate this include:
- live KPI dashboards, giving quick visibility of real-time progress of projects against key strategic metrics and intended outcomes
- milestone tracking and variance alerts which automatically notify about deviations from scope, timeline, or budgets—all potential early warning signs of misalignment
- OKR-based strategic goal mapping to demonstrate and visualize linkage between an organization’s active projects and its overarching business aims
- automated, customizable reporting and summaries that give all stakeholders clear, up-to-date insights progress, risks, and alignment
- change request impact analysis which calculates how any changes to proposed scope or timelines will impact alignment
To bring a sense of routine, project and portfolio managers may want to schedule portfolio strategy reviews. Automated alerts and integration with calendar systems are other little tricks to ensure alignment isn’t a one-off “set and forget” activity, but a regular and consistent undertaking throughout project execution.
Secure leadership support
For projects to truly align with business strategies, leadership must be fully invested in their success. This means not only offering strategic guidance but also providing the necessary resources, support, and authority to overcome challenges.
Driving buy-in on complex projects requires engaging leadership early and often. There are several methods for achieving this, such as:
- involving executives during project selection and ensuring involvement in setting the strategic vision, for example during portfolio planning or intake sessions
- providing regular, high-level progress updates using concise dashboards or executive summaries to keep leadership informed on alignment, progress, and risks (without overwhelming detail)
- requesting input, not just approval, giving opportunities for leaders to actively shape project direction through strategy workshops (and hence giving them a sense of ownership)
- developing a compelling business case with data-backed rationale that addresses cost-benefit analysis, strategic impact, and risks (framed in business, not technical terms)
- highlighting early wins to demonstrate impact, build credibility, and build trust with leadership for the project. reinforcing leadership’s decision to support the project
For a real-world example, discover how C-suite buy-in when implementing a PPM solution helped Tracetebel not only standardize project management processes but most of all, encourage collaboration. One of the strategic goals of this global engineering and consulting company was to foster a unified company culture.
“Having strong management buy-in makes a big difference. When leaders support the change, adoption is much easier.”
— Yohan Fontanier, Application Manager at Tractebel
Start your journey to strategic success with Planisware
Projects’ failure to deliver on objectives is frequently blamed on poor execution. But achieving successful business outcomes is primarily about choosing the right projects.
Professional project portfolio management software like Planisware—trusted by over 800,000 users across hundreds of leading global organizations—will help you succeed on both fronts.
Explore our guide to becoming a strategic PMO to learn more about aligning project selection with strategy. If you are more of the learning-by-doing type, book a free one-to-one demo now!