Office Read 3 – Program
Strategy Alignment
Objective of the office Read – This
artifact is a short summary of respective content that will be covered in
class. The summary is a great tool to review content however by no means
replaces the SPM V4. Standard for Program Management remains the authoritative
source of preparation for the PMP Exam
Goal of this
domain: IMP - Program Strategy Alignment is the performance domain that identifies
program outputs and outcomes to provide benefits aligned with the
organization’s strategic goals and objectives.
Weightage on the PgMP Exam: 15% (25 Questions)
3.0 PROGRAM STRATEGY ALIGNMENT
Quick Tip – Consider Program Strategy
Alignment as the first few steps taken before a Program can be initiated. It is
at this time justification of a program via a business case takes place which
may or may not get approved by Portfolio Review Board. Vison and Mission
statements along with Values are established. Goals in the form of outcome and
benefits are also listed out at a very high level along with Organisational
Strategy. Program Charter along with a very high level Roadmap is established
and presented to the Governance Board for approval.
Purpose of
this Domain: Program Strategy Alignment is the performance domain that
identifies program outputs and outcomes to provide benefits aligned with the
organization’s strategic goals and objectives.
This domain is a simpler domain in the exam and covers following
elements:
3.1 Program Business Case
3.2 Program Charter
3.3 Program Roadmap
3.4 Environmental Assessments
3.5 Program Risk Management
Strategy
When
an organization develops its strategy, there is typically an initial evaluation
and selection process that may be formal or informal to help the organization
determine which initiatives to approve, deny, or defer as part of the portfolio
management practice of the organization.
Mature
organisations are more likely to have a formalized process for program
selection such as a portfolio review board or a program steering committee.
Either may issue Program Charter that defines the strategic objectives and
benefits a particular program is expected to deliver.
Program
Strategy Alignment is initiated with following steps:
1.
development of a program business case. A
program business case is a documented economic feasibility study used to
establish validity of the benefits to be delivered by a program; it justifies
the need for a program by defining how a program’s expected outcomes would
support the organization’s strategic goals and objectives. As the documented
economic feasibility study is used to establish validity of the benefits to be
delivered by a program, the business case is then further used as an input to
the program charter and subsequently the program roadmap. These three documents
are established as part of program formulation activities
2.
Upon Approval of Business Case, a Program
Charter is established.
Very Important: The program charter is a document issued by a
sponsor that authorizes the program management team to use organizational
resources to execute the program and links the program to the organization’s
strategic objectives. It defines the scope and purpose of a proposed program
presented to governance to obtain approval, funding, and authorization. This
program charter confirms the commitment of organizational resources to
determine if a program is the most appropriate approach for achieving these
objectives and triggers the program definition phase.
During
program definition, the program manager collaborates with key sponsors and
stakeholders to develop the program’s business case. This business case is
developed to assess the program’s investment against the intended benefits. The
business case can be basic and high-level or detailed and comprehensive. It
usually describes key parameters that can be used to assess the objectives and
constraints for the intended program.
IMP: One critical component of Business Case is identification of
business need in the form of Problem and Opportunity statement.
Apart
from the Business Need, the business case may include the following:
1.
Program outcomes, 2. approved concept, 3. issues,
4. high-level risk and opportunity assessment, 5. key assumptions, 6. business
and operational impact, 7. cost benefit analysis (or in other words
justification) , 8. alternative solutions, 7. financial analysis, 8. intrinsic
and extrinsic benefits, 9. market demands or barriers, 10. potential profits, 11.social
needs, 12. environmental influences, 13. legal implications, 14. time to
market, 15. constraints, and 16. the extent to which the program aligns with
the organization’s strategic plan, 17. Success Criteria
2.
The
business case describes the intent and authority behind the drivers of the
program and underlying philosophy of the
business need.
3.
The business case also serves as a formal declaration
of the value that the program is expected to deliver and a justification for
the resources that will be expended to deliver it.
The
business case is required as one of the document deliverables before the
program can be formally chartered and may be considered as the primary
justification document for an investment decision.
3.2
PROGRAM CHARTER
To develop a Program Charter, approval of Business Case should be in place.
The
program steering authorizes the program by means of the program charter. Derived from the business case, the program
charter is a document that assigns and authorizes a program manager and defines
the scope and purpose of a proposed program presented to governance to obtain
approval, funding, and authorization.
Please note: the underlying concept above is same a PMBOK 6
Development of Project Charter.
Key
elements of a program charter consist of the 1. program scope, 2. assumptions, 3.
constraints,4. high-level risks, 5. high-level benefits, 6. goals and
objectives, 7. success factors, 8. Timing (high level roadmap), 9. key
stakeholders, and 10.other provisions that tie the program to the business
case, thereby enabling program strategy alignment.
Critical concepts about Program
Charter for the exam (Memorize the ones listed below) :
1.
Program charter formally expresses the
organization’s vision, mission, and benefits expected to be produced by the
program;
2.
Defines program-specific goals and objectives in
alignment with the organization’s strategic plan in support of the business
case.
3.
The program charter also provides the program
manager with the authority for leading other subsidiary programs, projects, and
related activities to be initiated, in addition to the framework by which these
program components will be managed and monitored during the course of the
program.
4.
The program charter is one of the document
deliverables that will be used to measure program success.
5.
It should include the metrics for success, a
method for measurement, and a clear definition of success.
Very
Important: Program Roadmap sometimes also referred to as high level roadmap
maybe included as part of the Charter.
3.3
PROGRAM ROADMAP
On my PgMP Exam, there were quite a few questions from this section.
These are all easy picks from exam standpoint, so pay close attention to this
section. Everything below is an scenario based exam question.
1. The
program roadmap is a chronological representation of a program’s intended
direction, graphically depicting dependencies between major milestones and
decision points, which reflects the linkage between the business strategy and the
program work.
2.
Program roadmap may look similar to a project
schedule, the roadmap instead outlines major program events for the purposes of
planning and the development of more detailed schedules.
3.
The program roadmap also reflects the pace at
which benefits are realized and serves as a basis for transition and
integration of new capabilities.
4.
The program roadmap can be a valuable tool for
managing the organization of a program and for assessing a program’s progress
toward achieving its expected benefits.
5.
Helps in effective governance of the program,
the program roadmap can be used to show how benefits are delivered within major
stages or milestones; however, it may include the component details, their
durations, and contributions to benefits.
6.
A roadmap
is an effective way to communicate the overarching plan and benefits to
stakeholders to build and maintain advocacy.
3.4
ENVIRONMENTAL ASSESSMENTS
There
are often internal or external influences to the program that have a
significant impact on a program’s success. Influences from outside the program
may be internal to the larger organization, or may come from sources external
to the organization. Program managers should identify these influences and take
them into account when managing the program in order to ensure ongoing
stakeholder alignment, the program’s continued alignment with the
organization’s strategic goals and objectives, and overall program success.
3.4.1
ENTERPRISE ENVIRONMENTAL FACTORS (these remain
same as PMBOK 6).
Think about environmental factors as all those factors influence your
organization as whole. As program manager we must adjust our programs as and
when changes to environmental factors take place.
Enterprise
environmental factors refer to conditions, not under the immediate control of
the team, that influence, constrain, or direct the program.
Strategic
goals change, however, in response to environmental factors. When this occurs,
a change in the direction of the organization may cause the program to be
misaligned with the organization’s revised strategic plan. In this case, the
program may be changed, put on hold, or canceled regardless of how well it was
performing.
Environmental factors may include but are not limited to:
Business environment; Market; Funding; Resources;
Industry; Health, safety, and environment; Economy; Cultural diversity; Geographic
diversity; Regulatory; Legislative; Growth; Supply base; Technology; Political
influence; Audit; New business processes, standards, and practices; and Discoveries
and inventions.
Program
Managers conduct environment analysis using various techniques listed below to
monitor any changes to the environment in which the program is conducted. Below
are the various forms of analysis that may be used to assess the validity of a
program’s business case and program management plan.
3.4.2.1 COMPARATIVE ADVANTAGE ANALYSIS
1.
When conducting environmental analysis for a
strategic initiative and/or business case, it is important to consider that
competing efforts may reside within or external to the organization.
2.
A typical business case includes analysis and
comparison against real or hypothetical alternative scenarios.
3.
Where appropriate, comparative advantage
analysis may also include what-if analyses to illustrate how the program’s
objectives and intended benefits could be achieved by other means.
3.4.2.2 FEASIBILITY STUDIES
Using
the business case, organizational goals, and other existing initiatives as a
base, this process assesses the
feasibility of the program within the organization’s financial, sourcing,
complexity, and constraint profile.
Imp: This analysis contributes to the
body of information that decision makers require to approve or deny the program
proposal.
3.4.2.3 SWOT ANALYSIS
1.
An analysis of the strengths, weaknesses,
opportunities, and threats (SWOT) faced by a program provides information for
optimizing the program charter and program management plan.
2.
The SWOT analysis, in particular the analysis of
weaknesses and threats, may be a valuable input to the development of the
program risk management strategy.
3.
SWOT analysis may also form part of the
feasibility study as well as the business case.
3.4.2.4 ASSUMPTIONS ANALYSIS
1.
Assumptions are factors that, for planning
purposes, are considered true, real, or certain.
2.
Identified initially during business case
development, assumptions affect all aspects of the program and are part of the
progressive elaboration of the program.
3.
Program managers regularly identify and document
assumptions as part of their planning process.
Golden
rule: continue to validate assumption
3.4.2.5 HISTORICAL INFORMATION ANALYSIS (this info can be used during
the program definition phase)
1.
Previously completed programs and completed
phases of active programs may be a source of lessons learned and best practices
for new programs
2.
Historical information includes artifacts,
metrics, risks, and estimations from previous programs, projects, and ongoing
operations that may be relevant to the current program.
3. Historical information describing the successes,
failures, and lessons learned is particularly important during program
definition.
3.5
PROGRAM RISK MANAGEMENT STRATEGY
3.5.1 RISK MANAGEMENT FOR STRATEGY ALIGNMENT
Strategy
alignment comprises the alignment of the program roadmap and its supported
objectives to organizational strategy. This involves having a risk management
strategy that ensures effective management of any risk that can cause the
program to be out of alignment with organizational strategy. Such a risk
management strategy includes defining program risk thresholds, performing the
initial program risk assessment, and developing a high-level program risk
response strategy, as well as determining how risks will be communicated to
strategic levels of the organization.
3.5.2 PROGRAM RISK THRESHOLDS
Risk
threshold is the measure of the degree of acceptable variation around a program
objective that reflects the risk appetite of the organization and program stakeholders.
Examples
of program risk thresholds include:
·
Minimum level of risk exposure for a risk to be
included in the risk register,
·
Qualitative (high, medium, low, etc.) or
quantitative (numerical) definitions of risk rating, and
·
Maximum level of risk exposure that can be
managed within the program (beyond which an escalation is
triggered).
Establishing
program risk thresholds is an integral step in linking program risk management
to strategy alignment and therefore should be done as part of early planning.
Program
Governance may be responsible for ensuring that program risk thresholds are
established and observed in the program.
3.5.3 INITIAL PROGRAM RISK ASSESSMENT
While program risk management is conducted
throughout the life of the program, the initial program risk assessment,
prepared during program definition, offers a unique opportunity to identify
risks to organizational strategy alignment.
It
enables risk to be considered when developing the program roadmap and when
examining environmental factors. As such, it is critical that the initial
program risk assessment identifies any risk to strategy alignment, which
includes but is not limited to any uncertain events or conditions that, if they
occur, could lead to:
·
Program objectives not supportive of
organizational objectives,
·
Program roadmap not aligned with organizational
roadmap,
·
Program roadmap not supportive of portfolio
roadmaps,
·
Program objective not supportive of portfolio
objectives, and
·
Program resource requirements out of sync with
organizational capacity and capability.
Once
the initial program risk assessment is performed, a risk response strategy is
developed to complete the program risk management strategy.
3.5.4 PROGRAM RISK RESPONSE STRATEGY
Program
risk response strategy combines the elements of the risk thresholds and the
initial risk assessment into a plan for how program risks will be managed
effectively and consistently throughout the life of the program. For each
identified risk, the risk thresholds can be used to identify the specific
response strategy based on a number of rating criteria.
A
robust program risk management strategy comprises a specific risk response
strategy for each of the risk rating levels that have been developed to reflect
the program’s risk thresholds.
Once
established, the program risk management strategy drives consistency and
effectiveness in program risk management activities throughout the program as
part of program integration and supporting activities. Risk management strategy
enables the program to communicate and manage program risks consistently
throughout the course of the program performance as part of governance.
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