According to the PMBOK Guide and The Standard for Portfolio Management, projects are not isolated activities; they are the primary means by which organizations implement their strategic plans.
* Strategic Alignment: Organizations use projects to bridge the gap between their high-level organizational strategy and the actual delivery of business value. Every project should be linked to the organization ' s goals to ensure that resources are being used effectively.
* Business Value Creation: Projects are initiated as a result of one or more of the following strategic considerations:
* Market demand (e.g., building a new fuel-efficient car).
* Strategic opportunity/Business need (e.g., a training company authorizing a project to create a new course to increase its revenue).
* Social need (e.g., a non-governmental organization authorizing a project to provide potable water to a community).
* Environmental considerations (e.g., a project to reduce a company ' s carbon footprint).
* Portfolio Management Link: Projects and programs are often grouped into portfolios specifically to ensure they align with and support the overall organizational strategy and objectives. If a project no longer aligns with the strategy, it is often terminated to redirect resources to more relevant initiatives.
Comparison with other options:
* A. Product performance: While a project might improve a product ' s performance, this is a technical objective or a result of a project, rather than the high-level organizational reason why the project was undertaken in the first place.
* B. Budget process: The budget process is a functional activity that supports the project by providing funds. Projects are not undertaken to support the budget; rather, the budget exists to support the projects that drive the strategy.
* C. Collective capabilities: While projects can enhance the " collective capabilities " of a team or organization (through learning and development), the fundamental driver for initiating a project is to meet a strategic business goal.