Completing project on time, on budget 'not good enough'
Completing projects and programs successfully - on time, on budget - is essential. But just as important is whether or not the expected business benefits are achieved.
That's the view of Mark A Langley, President and CEO of the US-based Project Management Institute (PMI) which recently published its 11th annual global survey of project management practitioners, "Pulse of the Profession".
The survey involved 3 234 project management professionals, 200 senior executives, and 510 PMO directors from a range of industries. There were also interviews with 10 corporate leaders and seven PMO directors and directors of project management. Respondents spanned most world regions including the Middle East and Africa (EMEA) alongside North America, Asia Pacific, Europe, Latin America and the Caribbean.
According to Langley, this year's survey took a broader view of what could be deemed project success by taking account of what the PMI terms "an organisation's benefits realisation maturity level", which it defines as "the collective process of identifying benefits at the outset of a project and ensuring, through purposeful actions during implementation, that the benefits are realised and sustained once the project ends."
The report states that benefits realisation management (BRM) is a powerful way to align projects, programs, and portfolios to an organisation's overarching strategy. But because there is no single, widely accepted BRM process to follow, many organisations are hesitant to take this on.
Despite that, the PMI found that more organisations were taking steps to establish procedures for identifying benefits and monitoring progress toward achieving them throughout the project life cycle and beyond. In fact, 31% of organisations in the survey reported high benefits realisation maturity.
XHerad = Champions and underperformers
The PMI report labelled elite organisations - those that had high levels of benefits realisation maturity and had invested in proven project management practices, had completed more than 80% of projects on time and on budget as well as met original goals and business intent - "champions". Only 7% of organisations involved in this study fell into this category.
The survey found that "champions" not only enjoyed more successful business outcomes, they also wasted nearly 28 times less money due to poor project performance; and fared better at other measures of project completion.
Nevertheless, even champions experienced difficulties with an average of 28% of their projects experiencing project creep; 14% failing resulting in budget losses; and 6% deemed outright failures.
Underperformers, on the other hand - some 12% of organisations - completed only around 25% of projects on time and within budget; and had only one third of projects meeting original business goals and intent. Project creep plagued 68% of their projects, budget losses were experienced in almost half of all their projects while a quarter of projects failed completely.
Nevertheless, the PMI report indicated that there were indications of a positive change in the way organisations were managing projects. For the first time in five years, more projects were meeting original goals and business intent, more were being completed on time and within budget; and the amount of money lost due to poor project performance had declined by some 20% compared to a year ago when the previous survey was conducted.
However, organisations were still losing a whopping $97 million for every $1 billion invested due to poor project management.