Why Aligning IT Projects with Business Strategy is Critically Important

Why is it critically vital to support IT projects with a business strategy?

A project consists of a beginning and end; in many cases, projects are used to achieve strategic organizational goals. A company may use projects to innovate, move into a new business market or use a project to drive down cost within the organization as described by Verzuh (2015).

Information technology is critical to most thriving businesses today. Information technology, in many cases, is essential in assisting in automation or streamlining business operations. Categorizing information systems projects that deliver the greatest business benefits, organizations must develop an information system plan that is in line with the organizations overall high-level strategic plan. As Laudon & Laudon (2007) points out, the strategic plan provides the organization a road map. The plan contains a statement of corporate goals and specifies how information technology will support the attainment of those goals.

One method of organizing future information technology projects with business strategy is project portfolio management (PPM). PPM aligns resources with the organizational strategy. PPM has three principal purposes as outlined by Verzuh (2015). First, the organization's strategy needs to be arranged with project selection. Then the allocation of resources built on the urgencies or priorities of the project. The last principle is to manage and enhance the resources used across projects in the organization so that they are optimized. Each project have risks associated with them, and some projects have the ability to increase the bottom line of the company significantly, and some are of dire importance to the organizations to survive in the marketplace as Verzuh (2015) points out.

There are four PPM benefits identified by Verzuh (2015). The first is that the organization PMO and senior managers can balance the risk and reward of the project. Encouraging a focus on meaningful results directly supporting all the strategic goals is the second. The third is to invest in the right projects with enough resources to bring the project to completion. The last PPM benefit as Verzuh (2015) points out is to use strategic priorities or plan to help assist in the allocation of resources.

In my mind, the plan to align future IT projects with business strategy should include a product owner or project office maintaining all the clients feature requests and suggestions in a document. Having them listed and prioritized order assists in delivering upgrades to the product or service that if one client wants it is most likely the others will enjoy and use too.

One example of this is a project strategy to keep clients at the company where I work. It has to do with types of imagery our company produce and provide to clients. Up until the middle of last year, we only delivered satellite imagery from our satellites, and no other third party imagery was available our product the clients use. Today our company has partnered with other third party satellite imagery companies and incorporated the third party imagery into many of our products which have aligned an IT project with business strategy. Our company now passes this imagery benefit onto our clients by providing third party imagery that the company does not specialize in and have it available for clients to use in our product. The idea was a company strategy intended to supply our clients with our imagery and thrid party imagery within one product. Having our imagery and the third party imagery available to our clients has provided the customer satisfaction, so they did not need to use the competitor’s imagery via other tools.

References

Laudon, K. C., & Laudon, J. P. (2007). Management information systems: managing the digital firm (10th ed.). Upper Saddle River, NJ: Pearson Education.

Verzuh, E. (2015). The Fast Forward MBA in Project Management, 5th Edition [VitalSource Bookshelf version]. Retrieved from (https://bookshelf.vitalsource.com/books/9781119086673)

Institute, P. M. (2013). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition, 5th Edition [VitalSource Bookshelf version]. Retrieved from (https://bookshelf.vitalsource.com/books/9781935589815)

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