Eight Steps to Use Projects to Close Organization Gaps

A project approval process is part of portfolio management. In many companies, the project approval process starts during a yearly business planning process. Projects are submitted, evaluated and approved for the following fiscal year. The following process represents a very simplified and high-level view of what is involved.

GAP

1. Complete Future State Analysis: Evaluate the future state of the organization and the marketplace. Questions include: What is the vision for the organization in three (to five) years? What will the marketplace be like? Where will the competitors be? What capabilities need to be in place?

2. Complete Current State Analysis: Evaluate where the organization is today. Questions include: What are the strengths and weaknesses? What is the primary mission and strategy? Are you winning or losing in the marketplace?

3. Create Gap Analysis: What has to happen to move the organization from where it is today to where it needs to be in the future? What skills need to be built? What capabilities need to be in place? What information systems need to be developed or purchased? What processes need to be implemented?

4. Propose projects to close the gap: What projects must be funded to get the organization from where it is to where it needs to be? This ends up being a wish list of work, including both IT and business initiatives.

5. Create a business case for each project: The business case provides enough preliminary information so that the projects can be prioritized later. This could include:

  • Assigning a sponsor.

  • High-level business requirements and major deliverables.

  • High-level estimated effort, cost, and duration.

  • High-level cost-benefit analysis. 

  • Describe how the project aligns to goals and strategies.

  • High-level risk analysis.

6. Prioritize the projects: Prioritize the projects based on business value and alignment to goals and strategies. This is not always an apples-to-apples comparison, since there are many reasons why a particular project might be of value. Even though all of the projects provide value to the business in some way, some projects may be rejected altogether while those remaining will end up on a prioritized list.

7. Determine which projects will be funded: The projects with the highest priority to the organization are put forward for funding. This could include the entire prioritized list, or some subset. For instance, the organization may have 20 prioritized projects, but may have funding for only 10. Projects that do not get funded go on a portfolio backlog.

8. Initiate the project: After the project is approved, at some point it will be ready for executing. The business sponsor should revalidate the business case to ensure the project is still viable. The organization must be prepared to commit the resources required to complete the project. If those items are all in place, and the organization is still in agreement to proceed, then you can start the project planning process.