According to the Project Management Institute (PMI), over the past year there has actually been a significant decline in project success! In their annual Pulse of the Profession report, they surveyed 2,428 project management practitioners, 192 senior executives, and 282 PMO directors to get a hold on where project management is going right–and where it is going really wrong.
PMOs for Project Success
Organizations must learn how to diversify their view and make technical, leadership, and strategic and management expertise the true goal. Those organizations that incorporate all three meet their project goals 40 percent more. PMOs can help to align this strategy. Organizations that have implemented enterprise-wide PMOs see 27 percent more projects completed successfully and a 42 percent decline in issues with scope.
Executive leaders and PMO directors do not view “success” in the same way, which aids in the problem of a declining project success rate. Everything from prioritizing project funding to the benefits of formal project management is differing. They do, however, agree that there is great importance in improving their competitiveness. This can be done by formulating strategies that will best accommodate the changing market and prioritize the organization’s funding.
When projects are not managed well, not only do they fail, but an immense amount of money is wasted. For every $1 billion invested, there is $122 million wasted. This sum is a 12 percent increase over last year’s numbers.
There are a number of trends that are directly impacting project management. First, the cost of energy is falling, because new shale oil and gas deposits are being monopolized. Second, globalization has greatly improved business conditions, because it has inspired investments in projects aimed at low- to middle-income economies. Finally, scientists and engineers are beginning to assess geoengineering projects, which will open the door to a multitude of new opportunities. Organizations who embrace these trends and begin to capitalize on them will see great potential.
The Value of Project Management
Projects are 2.5 times more successful when the team is utilizing project management practices. This is a comparison between 34 percent and 89 percent, with a decrease in wasted money by nearly 13 times. Organizations that have ongoing project management training, a defined career path, formal processes to develop project managers’ competencies, and formal processes to transfer knowledge are more profitable. Organizations that have all of these in place meet their goals 71 percent of the time, compared to organizations who have none of them and only meet their goals 54 percent of the time. Additionally, these great organizations stay within budget 65 percent of the time and deliver projects on time 63 percent of the time.
Sixty-eight percent of respondents stated that their organizations have a project management office, though 66 percent stated their organizations only use department-specific offices. An alarming 45 percent of executives believe their organizations do not fully understand the value of project management.
A lack in improvement coupled with a decline in other key organizational capabilities helps to explain the poorer project outcomes in comparison to last year’s results. Project management practices help to improve an organization’s ability to deliver great projects, because they reduce risks, save on costs, and make the project more successful. Embrace project management and see your projects blossom.
You can view the full report here: http://www.pmi.org/~/media/PDF/learning/pulse-of-the-profession-2016.ashx