SEAM Framework: Leveraging Project Metrics to Enforce Strategic Alignment and Success

Introduction

In a rapidly changing competitive landscape, organizations heavily depend on programs and projects to execute their strategy. An organization's success depends on executing projects to meet the intended project goals and its alignment towards its strategy. Strategic alignment is achieved by grouping together projects and programs under one or more strategic business objectives. PMI's Pulse of the profession shows that 40% of the strategic initiatives do not meet the originally intended goals, and leaders struggle to bridge the gap between strategy and project execution. Further, organizations with an established Enterprise Project Management Office (EPMO) show that only 41% of organizations have a clear alignment of projects with their organization strategy (Pulse, 2017 & 2018). This paper introduces the Strategy Execution Alignment and Measurement (SEAM) framework to addresses the gap between strategy and project execution. It establishes a clear link between strategy and its associated projects and provides a top-down and bottom-up traceability between strategy and projects. It also uses consistent Project Measurement Units (PMU) to monitor project success and trace back to strategic objectives and organizational strategy. This framework provides clear visibility and control to leadership on how the strategy is executed, its progress, and its percentage of success at the corporate level. It also helps project and program managers understand how project outcomes contribute to the business strategy and organization's growth and success.

Two versions of the framework are presented in this paper. The first version is called Strategy Execution Alignment and Measurement Framework (SEAM) – Simplified. The simplified framework gives equal importance to all the strategic objectives grouped under one strategy. The Business unit or functional leadership can monitor all the funded strategic initiatives and their performance by rolling up all the project, program, and portfolio performance metrics. The second version is called Strategy Execution Alignment and Measurement Framework (SEAM) – Prioritized. The prioritized framework has the flexibility to apply a 1-5 scale relative priority to all strategic objectives associated with a strategy. The prioritization option will help executive sponsors focus on immediate and short-term goals while prioritizing long-term strategy. The prioritization also helps to optimize the allocation of funding and resources to execute programs and projects.

Key features of the framework:

1)     Enforce Strategic Alignment: The framework designed to enforce Project alignment to strategy by logically connecting all the strategic components and enforce alignment using a standardized Project Measurement Unit (PMU).

2)     Tracking and Tracing: It facilitates top-down and bottom-up tracking performance and tracing business strategy to projects.

3)     Standardized measurement: This framework uses a four-scale Project Measurement Unit (PMU) to consistently measure the performance across all layers of strategic planning and associated projects.

4)     One View: It provides a single view to link strategy and projects. Stakeholders at all levels of the organization can easily understand the metrics and take necessary actions if the project performance does not meet the target goals and objectives. The consolidated view of all strategic initiatives helps senior leaders to visualize the big picture and review strategic progress during the monthly, quarterly, semi-annual, and annual reviews.

5)     Dual Options: SEAM two different versions for monitoring and reporting the strategic alignment and success. 1) SEAM – Simplified 2) SEAM – Prioritized. The simplified version considers all strategic objectives are equal, and the Prioritized version allows for tracking using actual priorities.

6)     Digitization: The SEAM framework provides an easier way of grouping and prioritizing the strategic components. The quantitative approach and consistent use of the PMU scale facilitate digitizing the process and linking strategy to projects. Digitizing the measurement process helps stakeholders of the strategy monitor the status in real-time and change the priorities to meet changing needs of a business.

Organization and Business Strategy

Robert Kaplan and David Norton introduced the Balanced Scorecard (BSC) in the early 1990s and were adopted by many organizations to measure organization performance. It uses four perspectives to achieve growth and performance: Financial (How does the organization look to the shareholders?), Customer (How do the customers see the organization?), Internal Processes (What must the organization excel at?), and Learning and Growth (How can the organization continue to improve and create value?). The Balanced Scorecard is a common approach for organizations to measure performance and goals, achieve a balanced view of the company's performance, improve communication, and bridge the gap between the organization's objectives and day-to-day activities. (Albu, 2018, Niven, 2014, and Barclay, 2008). In most organizations, the BSC approach stops at the senior leadership level. Senior leadership has a clear understanding of the overall strategy and how it translates to an organization's success. However, it does not permeate into the lower ranks of the organization, who are instrumental in executing the strategy through programs and projects.

Strategic Alignment

To ensure project success, the project leaders (portfolio, program, and project managers) should understand the organization's strategy and how the outcome and the value delivered by projects will help the organization's strategy and success. Generating a Strategy to project execution link will help visualize how all the projects are related to programs. It also helps how all the programs and projects are related to the portfolio and how the portfolio(s) are related to one or more strategic objects and final to the organization strategy. Visualizing the project alignment towards strategy empowers project leaders to understand how the project outcome translates into value and benefits to the organization and its customers. PMI's Pulse of the Profession survey found that Enterprise PMO Bridges the gap between Strategy and value delivery. It also helps strategic alignment between business objectives and the projects and programs. One of the reasons for project failures is due to the gap between strategy design and delivery. (PMI, 2018)  Figure 1 below shows the linkage between organization and business strategy into programs and projects.

Figure 1. Strategy Alignment and Project Execution

Dynamic market environments and rapid technology changes reduced the organization's strategy and planning to a maximum of three years. Organization strategy starts with a goal to achieve and the goals broader in scope. The goals are then sub-divided into multiple strategic objectives. The strategic objectives are Specific, Measurable, Attainable, Realistic, and Time-bound (SMART). These objectives are designed to meet the incremental goals of the business and its strategy. The proposed SEAM framework uses five strategic components, starting from strategy to execution, and ensures strategy alignment by leveraging metrics and measurements.

Strategy Components and Measurement

While discussing project management 2.0, Kerzner (2015) states that project management is a strategic competency for organizations, and project managers are vital to bridging the gap between strategy and execution. Figure 2 below shows the five-level strategy components used to measure and track business and strategy success. Two types of metrics are required to implement this framework. 1) Project Performance Metrics and 2) Strategy Execution and Alignment Metrics.

Project Performance Metrics: This focuses on traditional metrics used by project managers to monitor and project execution to achieve the project/product goals. For example, on-time, meeting budget goals and deviation percentage, meeting original scope (in percentage or actual numbers), quality metrics, customer satisfaction score, etc. Performance metrics are used to monitor and improve the project success and are primarily used by portfolio, program, and project managers. Project performance metrics are shared with all the impacted stakeholders during the daily or weekly status meetings.

Strategy Execution and Alignment Metrics: This is a unified metrics to track how well the strategy is executed at the portfolio, program, and project level. Project Measurement Unit (PMU) is a four-scale measurement applied based on unified project performance metrics. Executive sponsors and business leaders use alignment metrics to monitor and track how well the business and organization strategy meets the goals.

Project Measurement Unit (PMU): To ensure consistent metrics, a 1-4 scale project measurement unit (PMU) will be used to track the project's success.

4 – Met the Defined [Strategic/Portfolio/Program / Project] Goals / Objectives

3 – On-Track to meet the Defined [Strategic/Portfolio/Program / Project] Goals / Objectives

2 – NOT-On-Track to meet the Defined [Strategic/Portfolio/Program / Project] Goals / Objectives

1 – Did NOT Meet the Defined [Strategic/Portfolio/Program / Project] Goals / Objectives

Figure 2. Five-Level Strategy Components

Level 1 - Project Performance: The first level, the lowest level of all the metrics, primarily focuses on project performance. PMI defines a project as a "temporary endeavor undertaken to create a unique product, service or result." In project delivery, the actual realization of outcomes can only be realized after the project is completed and delivered to customers. There two critical measures used to track the project performance. 1) Meeting the project goals 2) Meeting the product goals or Outcome realization goals.

The first one, meeting the project goals, is technical, people, and process-oriented to measurement. The key metrics used to measure project success are:

1) Delivering the original project scope

2) Meeting the planned timeline or commitment to customers

3) Meeting the planned cost of the project

4) Meeting the explicit (Functional) and implicit (Quality, User Experience, Performance, Availability, Reliability, Security, etc.) needs of the customer

The second one, meeting the product goals, is result-oriented and measures the outcome of the project's product or services. Successfully delivered projects may or may not meet the product goals defined in the product vision. It depends on customer adoption, ease of use, marketplace changes, technology changes, and other micro and macro-economic factors where the products are sold or used by the customers. Once the project is closed, it will be transitioned to product operations. Product owners will continue to work on the tactical improvements and incremental changes until they realize the planned product goals.

Level 2 - Program Performance: Multiple related projects are grouped and managed under a Program. The program performance is a unified measurement of multiple projects. The same PMU scale is used to indicate the program's success. The unified measurement will take the lowest value of all the related project's PMU score. For example, if there are two projects, project-A has a score of 4 (Met the defined program goals), and project-C has a score of 1 (Did not meet the defined program goals), then the unified score will be 1 (Did not meet the defined program goals).

Level 3 - Portfolio Performance: A portfolio consists of projects and programs grouped to align with one or more strategic business objectives (Ross & Shaltry, 2006). Portfolio performance is a combination of all related programs and project metrics combined. The same PMU scale will be used to measure strategic objectives performance. The unified measurement will take the lowest scale of all the related programs. For example, if there are two programs, program-A has a score of 4 (Met the defined program goals), and project-C has a score of 3 (On-Track to meet the defined program goals), the unified score will be 3 (On-Track to meet the defined program goals).

Level 4 - Strategy Execution Performance: A portfolio aligns with one or more strategic objectives. An organization's success depends on meeting all the strategic objectives associated with a strategy. The PMU scale will be used to measure the performance of the strategic objectives. The unified measurement will take the lowest scale of all the related sub-portfolios. For example, suppose there are two portfolios. In that case, portfolio-A has a score of 4 (Met the defined portfolio goals), and project-C has a score of 1 (Did not meet the defined portfolio goals), then the unified score will be 1 (Did not meet the defined portfolio goals).

Level 5 - Organization / Business Unit Performance: The strategy is the endpoint of the measurement, and its success depends on the success of all the strategic objectives associated with one strategy. Strategy execution is a long-term process, and it a journey involving leadership and cross-functional teams within and outside the organization. The PMU metrics are rolled up at the strategy level, and if all the strategic objectives associated with a strategy are met, then the strategy implementation is considered a success.

Strategy Execution Alignment and Measurement Framework (SEAM)

SEAM Framework has two versions. 1) Simplified, 2) Prioritized. Figure 3 shows the simplified model. This model considers all strategic initiatives to have equal priority and have a similar measurement scale. The first step of measurement is data capture. Project Measurement Unit is captured for all the programs and projects related to a strategy, and the formula below will be applied to calculate a strategy's success.

Strategy Success Percentage = (∑ (Current PMU Score) / ∑ (Target PMU Score))/100

Figure 3. SEAM Framework – Simplified Model

Figure 4 below shows the SEAM Framework – prioritized. A priority scale (1-5) is assigned to all the strategic priorities within a strategy. It is a relative measurement scale that ranges from 1-5. A value of 1 is a low priority, and a value of 5 is a high priority. A large global organization may have hundreds of active projects focusing on various strategic objectives associated with different business units and functions. Since the strategy is long-term (1-3 years), the strategic priorities may change due to market conditions, competitive landscape, macro and microeconomic conditions, local and global socio-political changes, and stability. When a long-term strategy spans multiple years, the prioritized model empowers the leadership team to dynamically change the priorities and measure success based on the current priority. The below formula will be used to measure the strategy's success with priority.

Strategy Success Percentage =

[(∑ (Current score for strategic objectives * Strategic Priority) + ∑ (Current score for Strategy, Portfolio, Programs, and Projects)) + ∑ (Target score for strategic objectives * Strategic Priority + Target score for Strategy, Portfolio, Programs, and Projects))] / 100

Figure 4. SEAM Framework – Prioritized Model

The case study below will show an example of how the SEAM framework could be applied in real-world situations.

Case Study

Company XYZ Inc. created a three-year Strategy to digitize and modernize Information Technology (IT) to reduce the time-to-market capabilities, improve application availability and resilience. The company had three strategic objectives associated with Modernize IT.

1)     Reduce Capex by 40 percent

2)     Improve application availability from 90.3% to 99.99%

3)     Reduce Run the Business (RTB) cost by 7%

The Modernize IT strategy is formally reviewed and approved by the senior leadership team. The executive sponsors approved the funding for execution, and it is planned to complete in three years. The company has a centralized Enterprise Project Management Office (EPMO) to monitor all the projects and programs. All these strategic objectives are grouped under the IT Digital portfolio and divided into multiple programs and projects. Figure 5 shows the strategy execution linkage map and its performance for all the components associated with a strategy.

Figure 5. SEAM – Strategy Execution Linkage Map

Under the IT digital portfolio, there are two programs to Modernize IT. The first one is the Cloud Transformation program, which has three projects 1) Training and development of cloud technologies within IT, 2) Migrate business-critical applications to the cloud, and 3) Retire cloud migrated applications to release infrastructure and associated resources. The second one is the Op-Excel program, which focuses on creating a new support model, re-organizing and optimizing teams to support the applications hosted in the cloud. Successful completion of these two programs and associated projects will meet the IT Digital portfolio goals. The Strategy to Execution Linkage Map indicates the employees are trained on cloud technologies, successful migration of applications to the cloud, the retirement of the applications dependent on the cloud migration project is On-Track to complete. By combining all these projects, the Cloud Transformation program is Green and is On-track to successful completion.

The second program Op-Excel is to optimize the operations to support the new cloud-based technology.  It involves technology, people, and process transformation. The project status is Not-on-Track for completion resulting in not meeting the third strategic objective of reducing Run the Business (RTB) Cost or OpEx by 7%.  

The executive sponsors can use the Strategy to Execution Linkage Map to reach out to respective project leaders to understand challenges and issues in meeting the strategic goals. Figure 6 shows the case study example using the SEAM – Simplified Model. The business strategy has three strategic initiatives - 1) Reduce CapEx by 40%,  2) Improve Business Critical applications availability to 99.99%, and  3) Reduce Run-the-Business (RTB) cost by 7%. Using the simplified model, overall, the strategy execution is marked On-track to completion with a success rate of 66.07%.

Figure 6. SEAM – Simplified Model – XYZ Inc.

Figure 7 shows the prioritized model by applying the prioritization scale of 1-5, with 1 being a low priority and 5 being the highest priority. In this case study, two strategic objectives Reduce CapEx by 40% and Improve availability of business-critical applications to 99.99%, have a priority of 5. The last strategic objective is to reduce Run-the-Business (RTB) cost by 7% with a priority score of 2. If we use the SEAM – Prioritized model and apply the priorities, the success rate increased to 71.59%.

The third strategic objective to reduce RTB by 7% involves significant changes in the operating model by introducing innovative technologies and process improvement. This will take time to implement and depends on evaluating new vendors with AI and ML expertise. Besides, optimization includes consolidating and augmenting existing vendor resources' capabilities to meet the unified cloud support model. Though the last strategic objectives are Not-on-Track, considering the overall completion of two key strategic objectives and their priorities, the strategy implementation is leaning towards success. The Op-Excel program should be revamped with additional funding and leadership support to bring the program On-track to achieve program goals and strategic objectives.

Figure 7. SEAM – Prioritized Model – XYZ Inc.

Implementation Process

Measurement programs should identify relevant, actionable, attainable metrics and limit the total number of metrics used for strategic progress and success. Besides, the metrics should be easy to collect, easy to understand, and recommends actions for not meeting the desired goals. According to Ebert (2004), four main reasons metrics measurement programs fail. 1) Collecting metrics without a meaning, 2) Not analyzing metrics 3) Setting unrealistic targets, 3) Measurement must be goal-driven, and 4) Paralysis by analysis.  Figure 8 shows the recommended process flow to implement the SEAM Framework effectively.

Figure 8. Metrics Implementation Process

Define Metrics Goals: The metrics should identify goals and associated metrics to achieve the desired goals. These metrics vary based on the five measurement layers strategy, strategic objectives, portfolios, programs, and projects. Projects have metrics on on-time delivery, meeting planned budget, meeting original scope, and realizing the product goals by delivering quality outcomes. Numerous secondary level metrics could be used to support these primary metrics. During the definition phase, it is vital to get buy-in from three types of stakeholders. 1) Stakeholders whose performance is measured 2) Stakeholders who will use the metrics to monitor and track metrics towards goals, and 3) Stakeholders who will be taking actions when there is a deviation from target metrics.

Design Metrics: Once the goals and associated metrics are identified, designing the metrics involves identifying the data source, frequency of data capture, accuracy and reliability of data, and metrics reporting timeliness. When multiple measures are consolidated to measure a single factor, the design should synchronize the data capture timings, use a consistent measurement scale, and co-ordinate reporting and distribution. The design should also be simplified to facilitate automated data capture, notification, reporting, and analytics. Design of metrics also should balance between cost vs. benefit in terms of efforts and value of implementing the metrics. Finally, the metrics should indicate what action should take if there are any deviations from the desired levels and who should be involved, and what action to remediate.

Communication Strategy: Metrics are created for a specific purpose, for a particular use, and a targeted audience. The communication strategy includes mode, frequency, format, and audience for the communication. As shown in Figure 2, Level-5 metrics are aggregated and summarized at the strategy level targeted for senior leadership, and Level-1 metrics are detailed, focusing on multiple process areas of projects targeted for project teams and stakeholders. The rolled-up metrics will be used by fewer people holding senior leadership positions responsible for creating and executing organizational strategy.

Automate and Predict: The best use of any measurement and metrics is to report metrics at the right time to the right audience and with the right content. Automating the processes to capture data from the source and integrating it with the analytics or dashboards will help the metrics available near real-time. Automation will also help timely reporting and send notifications for any deviations and empower the stakeholders to take proactive steps to prevent any major issues. Digitizing and integrating with analytics helps build history and predict possible future incidents and send alert notifications before the deviation happens.

Evaluate and Improve: Periodically evaluating the metric's usage and effectiveness will improve current metrics and eliminate metrics that no longer serve the original intended purpose. The evaluation process also helps to introduce new metrics or combine multiple metrics into one single metric. The metrics evaluation should be done at regular intervals. Also, metrics should be evaluated if there is any change in process, leadership, and priorities.

Conclusion

Strategic alignment helps to monitor strategic progress closely based on priorities and performance. This paper discussed the importance of strategy and project execution alignment to achieve the organization's growth and success. Also, introduced the SEAM Framework to enforce alignment using measurement and metrics. Using a case study, the author explained how the SEAM framework could enforce strategic alignment and bridge the gap between strategy and execution. He also used the SEAM framework to track success by utilizing a Strategy Execution Linkage Map and using a standardized Project Measurement Unit. Finally, this paper shared best practices to effectively implement the SEAM framework to achieve strategic goals through project success.

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About the Author

Kaali Dass is a Senior Project Consultant and has over 25 years of information technology experience spanning multiple industries. He has extensive experience in managing domestic and international projects, including Cisco Systems and LinkedIn. He is also an Adjunct Professor at USC Bovard College and serves as Director of IT – Digital Transformation and IT Security at NC PMI.

Kaali has a Ph.D. in IT Management, an MBA in Finance, and holds professional certifications including PMP, CISM, CSQE, ITIL, and CSM.

His focus areas are Portfolio management, Agile project management, IT strategy and planning, Enterprise architecture, Data architecture, IT Security, and Analytics.

For any questions about this article, he can be reached at [email protected] or https://www.dhirubhai.net/in/kaalidass