The high cost of project management immaturity
Organisations that self-identify as having low project management maturity are six-and-a half times more likely to fail at delivering projects on time and on budget than organisations with level five (the top level) maturity. However, even those with just an average maturity level are able to dramatically improve both the outcome and cost of projects.
Those were some of the findings to emerge from a study of US-based education, government and healthcare organisations that was undertaken this year by project management company TeamDynamix on behalf of ProjectManagment.com. The research and publication of the White Paper based on its findings was endorsed by the international Project Management Institute (PMI).
The survey found that just over 40% of the respondents identified as having level 1 and level 2 maturity. This was defined as either having no formal project management processes (level 1) or some governance and intake control (level 2). At the other end of the maturity spectrum, 30% said they had a formal project management framework, dedicated project managers, and formal processes for intake, tracking, budgeting, capacity-planning and so on.
Those that self-identified as having level 3 maturity – 10% of the respondents – claimed to have full intake and project tracking, while those at level 4 (17%) had formal intake, project tracking and budgeting processes in place.
The report notes that in today’s world, organisations simply cannot avoid undertaking IT projects as tech spend rises in organisations across the economic spectrum, including healthcare, education and government.
The good news to emerge from the survey was that in response to a question about the percentage of projects that achieved their business goals, only 7% of respondents reported a less than 50% success rate. However, the difference in the success rate of the high and low maturity organisations was stark.
Almost 13% of level 1 and 2 maturity organisations admitted that more than 50% of their projects had to be restarted – three times as many as those in the top maturity band – pushing up the costs of the project to their organisation.
When it came to questions about whether their projects were completed on time and within budget, only around 30% of low maturity organisation were able to respond in the affirmative, compared to between 60% and 70% of those at the highest level.
Yet the survey found that almost two-thirds of the low maturity group use dedicated project managers. While this suggests that organisations are committed to the concept of projects, they don’t have the infrastructure in place to support them.
Three steps to improve project management maturity
The report’s authors suggest that addressing some of the infrastructure elements will go a long way towards improving maturity.
They recommend three steps in particular that should be taken to improve project management maturity:
1. Create a formal project management office (PMO). Over 80% of the level 5 respondents had a PMO – more than twice as many as in the level 1 and 2 categories. However, if the organisation is unable to set up a PMO, enlisting a dedicated project manager would be a good first step.
2. Conduct resource capacity planning on an ongoing basis.
More than twice as many level 5 organisations as those in the lower level bands focused on resource capacity planning regularly. This involved more than just knowing how many people were required for a project; it also required the optimal alignment of people with work, including how quickly resources could be added to or replaced.
3. Create an effective intake and governance process.
Level 1 and 2 maturity respondents had admitted to having no intake or governance processes in place.