Business affairs are going pleasantly, order books are well filled, and you could enjoy and work on shaping the future. But then there are again issues coming up at some nasty project – do you have to take care for everything yourself?!
The colateral of ignorance is alarming
Coincidentally researches report since years about on average more than 46% of all projects failing to meet their schedule, cost and/or scope/quality targets, 19% to be terminated early. 33% of budgets is spent for „repair“ of projects in distress. Just do the math for the amount of money which is burnt here …
If you look at the causes it’s not technical (6%) and resource (9%) issues holding the top ranks, but rather insufficient project management (16%) and lacking management and organization support (18%). Additionally in most cases there are unclear requirements and stakeholders‘ goals (12%), and bad communication (15%) among the involved parties incl. the management.
You think that should lead to considerations at those responsible for authorizing investments initiating projects. 60% of responsible executives know about the opportunity cost of bad projects, but only 20% support PM initiatives to improve the situation in their companies instead. Moreover project management is perceived as a commodity by many managers – and treated accordingly.
The classical management science leaves out projects
The classical study books of business administration and economics (Schumpeter over Keynes to Taylor and Drucker) confine themselves to the management of the running business of enterprises like production, financials, sales etc. But isn’t conducting projects to adapt the company to the market requirements and to shape it for the future an equally necessary daily business and a strategically important task?
To manage projects properly and professionally, to optimize processes and equipment, to pay an attention to them adequate to their strategic importance to achieve the enterprise’s business objectives – shouldn’t that be an imperative for everybody in charge of projects on the C level, just like it’s practiced in the operations area?! With the business you earn the money, in investments and the resulting projects you build for growth and future ! The capability to manage projects professionally should therefore be a strategic asset as well, shouldn’t it?
Where is the business value of proper project management then?
As to operative benefits there are significant improvements in PM process quality, often even costs neutral:
- Effective monitoring and control of the project’s situation
- Faster and more efficient reaction
- Process performance and efficiency control
- Consistence and repeatability of results
In addition there is a considerable qualitative improvement at the project results, increasing adherence to planning and targets (CPI/SPI min. +20%) and cost savings, e.g. by avoiding unplanned long hours, expensive rework etc.
What management profits from
Management receives planning stability by „clean“ processes like more realistic estimates leading to practicable planning and as a result to stable calculations. Improved project control / governance provide better information for decisions, and pro-actively managed risks prevent losses and ensure higher returns on investment.
And last but not least there are the strategic advantages: Efforts prioritized by returned business benefits generates better resource efficiency, which makes for more throughput/capacity and therefore more revenue and/or flexibility. More reliable results increase customer satisfaction and retention, thus providing advantages at image and competition, and, and, and …
It seems to be worthwhile taking project management serious and valuable in companies, and supporting your projects more actively. Just start considering project management as a strategic asset – I’m happy to provide you many more good arguments for this !
Please read more about this topic in the latest research from PMI’s Pulse of the Profession „The high Cost of low Performance“