When Organizations Understand the Value of a Strategic Approach, Good Things Happen
PMI's 2018 Pulse of the Profession®
BY NOVID PARSI
Virtually every industry is being buffeted by the winds of change. Whether it's the emergence of new digital disrupters or geopolitical risks, organizations are grappling with business models and fast-changing competitive landscapes. While the future remains foggy, one thing is clear: When organizations master project management capabilities, they gain a competitive advantage that delivers results.
PMI's latest research, reported in the 2018 Pulse of the Profession®: Success in Disruptive Times: Expanding the Value Delivery Landscape to Address the High Cost of Low Performance, shows a clear ROI. Champions—high-performing organizations whose projects meet their schedule, budget, scope and benefits realization goals—waste 21 times less money than organizations with poor project performance, according to the annual global survey of project professionals and leaders. When it comes to waste, a streak of good news continues: Overall, since 2013, there's been a 27 percent decrease in the amount of money organizations are wasting because of poor project performance.
Yet there's opportunity to grow. Most organizations still haven't grasped the strategic role of project management. For instance, organizations that undervalue project management as a strategic competency for driving change report an average of 45 percent more of their projects failing. And failure has a big price tag: 9.9 percent of every dollar is wasted because of poor project performance. That's $99 million for every $1 billion invested. (Figures are U.S. dollar amounts but represent a percentage that applies to any currency.)
There are three keys to improvement: actively engaged executive sponsors, controlled project scopes and mature value delivery capabilities. Nearly 7 in 10 champions prioritize developing their executive sponsors’ skills, compared to fewer than 1 in 10 of their underperforming counterparts. One-third of champions’ projects experience scope creep, compared to nearly 70 percent of underperformers’ projects. Finally, almost 9 in 10 champion organizations—and just 1 in 20 underperformers—have mature value delivery capabilities.