Chapter 2. Strategy, Objectives, and Project Selection
2.5 Key Takeaways
- Organizations create specific strategies that should be pursued in the long term. These long-term objectives help organizations to gain a competitive advantage and a higher market share, or to acquire a variety of tangible and intangible benefits in line with organizations’ field of operations (e.g., businesses, government agencies, nonprofits). Projects are utilized to accomplish these long-term strategic objectives.
- The SMART protocol is commonly utilized by organizations to clearly define achievable and relevant objectives that contain measures and time-bound targets of how to assess whether they have been achieved. A commonly utilized guideline to create this kind of objective is to follow the SMART protocol. The SMART acronym represents being specific, measurable, achievable, relevant, and time-based.
- A business case is a feasibility document that justifies a need for an organization. It consists of the need statement, analysis of the current state and the desired future state, requirements, designs, and recommended solutions, and the evaluation of the solution to understanding the potential value.
- Organizations cannot put all the business cases and ideas into practice due to the constraints such as lack of time, resources, and budget. Thus, they implement project selection models to evaluate candidate projects and select some of them which satisfy the criteria of the models. These models are assessed in two main categories, that are financial and non-financial models. While payback period and net present value (NPV) fall into the financial models, weighted scoring models are used as non-financial models.