More projects are meeting original goals and business intent backed by strong project management
PMI’s 2017 Pulse of the Profession®: Success Rates Rise: Transforming the High Cost of Low Performance
demonstrates that last year organizations around the globe reduced the average amount of money wasted on projects and programs by 20 percent compared to the previous year. Globally, organizations wasted an average of $97 million for every $1 billion invested in projects and programs in 2016, compared to an average of $122 million per $1 billion in the previous year.
India reported the lowest average monetary waste on projects, $73 million per $1 billion invested, followed by China and the Middle East, both of which reported a loss of $82 million per $1 billion. The highest average waste was reported from Europe with $131 million per $1 billion.
Raj Kalady, managing director, PMI India, said, “As organizations face increasingly complex challenges from forces such as innovation, disruption, uncertainties, and the demands of a global business environment, the inextricable link between strategy and implementation must be addressed. What’s also critical is an understanding of how change occurs: Operations run the business; but projects change the business.
A formal approach to project and program management can be the link that ensures that an organization has the capabilities for change and strategy execution that it needs.”
The report further determines that organizations are becoming more mature with project management and are distinguishing themselves by:
- Developing project management talent. Developing technical, leadership, and business skills for the management of projects continues to draw significant attention. Thirty-two percent of survey respondents consider both technical and leadership skills a high priority — a three percent increase over last year.
- Managing project benefits. There’s growing attention to benefits realization management, which is the collective process of identifying benefits at the outset of a project and ensuring, through purposeful actions during implementation, that the benefits are realized and sustained once the project ends. One in three organizations (31 percent) reports high benefits realization maturity
- Establishing Project Management Offices (PMOs) and strategic Enterprise-Wide Project Management Offices (EPMOs). Organizations can bridge the gap between high-level strategic vision and implementation with a PMO. Among organizations with a PMO that participated in the survey, half reported having an EPMO. And those that align their EPMO to strategy (i.e., have a strategic EPMO) reported that 38 percent more projects met original goals and business intent and 33 percent fewer projects were deemed failures
- Driving executive sponsorship. Actively engaged executive sponsors continue to be the top driver of whether projects meet their original goals and business intent. That fact was not lost on survey respondents, who revealed an increase in the percentage of their organizations’ projects with actively engaged sponsors compared to last year — an average of 62 percent compared to 59 percent, respectively.
- Addressing agile approaches. Organizations increasingly embrace agile as a technique for managing projects. As many as 71 percent of organizations reported using agile approaches for their projects sometimes or more frequently.
Commented PMI President and CEO Mark A. Langley, “We are encouraged to see that organizations are making significant progress and experiencing more success with implementing strategic initiatives and delivering intended project benefits. We have long advocated that project management is essential for any organization’s success and are excited that others are increasingly realizing this fact. Organizations that invest in proven project management practices waste 28 times less money because more of their strategic initiatives are completed successfully.”
Added Mr. Kalady, “Change in an organization takes place through projects and programs. When a project and program management mindset is embedded in an organization’s DNA, performance improves and competitive advantage accelerates. We need to strengthen the conversation around the importance of project management and the issues essential to improving project and business results—the right skill set, the EPMO, and executive sponsors.”
Of the industries included in the study, healthcare reported the highest average waste on project spending. A more detailed breakdown of several key industries included in the study is given below:
- Healthcare – $112 million per $1 billion
- Telecom – $106 million per $1 billion
- Energy – $101 million per $1 billion
- Manufacturing – $98 million per $1 billion
- Government – $97 million per $1 billion
- Financial Services - $97 million per $1 billion
- Construction – $94 million per $1 billion
- IT – $78 million per $1 billion
The 2017 Pulse of the Profession features feedback and insights from 3,234 professionals globally who represent diverse levels of experience and industries, including government, information technology, telecom, energy, manufacturing, healthcare, and construction. These organizations are from countries in North America, Latin America, Europe, the Middle East, and the Asia Pacific.