Every organization wants to deliver better results. But some consistently outpace the competition, while others remain stuck in the middle of the pack.
Over the years, PMI's Pulse of the Profession® research has found that high-performing organizations—those that deliver 80 percent of projects on time, on budget and meeting original goals—are more likely to use proven project, program and portfolio management practices. Yet, PMI's 2016 Pulse of the Profession report found that most organizations aren't committed to increasing their project management capabilities, with only 1 in 4 using standardized practices across the entire organization.
This is partly due to a lack of clarity around how project management helps organizations meet their strategic goals. Only slightly more than half of organizations say they fully understand the value of project management, and less than half report high alignment of projects to organizational strategy, according to the 2016 Pulse report.
Over the years, PMI's Pulse of the Profession® research has found that high-performing organizations are more likely to use proven project, program and portfolio management practices.
The use of PMOs and other proven success factors, including a focus on training and development and executive sponsor engagement, remained level or declined year-over-year. And the consequences have hurt the bottom line. The 2016 Pulse report found that organizations wasted US$122 million for every US$1 billion they invested due to poor project performance—a 12 percent increase over the previous year.
The good news? Widespread gaps in understanding the power of project management create an opportunity for organizations to gain a competitive edge. For instance, organizations that understand project management as a role, a profession and an organizational competency waste 13 times less money than less-accomplished counterparts. And those that work to create a culture that values project management report that 71 percent of projects meet original goals and business intent, compared to only 52 percent at organizations that make building this culture a low priority.
By nurturing the right skills and priorities, organizations can foster a culture that positions project management as a driver of high performance. The 2016 Pulse report found that organizations with high project management maturity earn strong marks three ways: They look beyond technical skills, engage executive sponsors and understand the strategic role of the enterprise-wide project management office (EPMO).
When organizations develop the ideal skill set—a combination of technical, leadership, and strategic and business management expertise—40 percent more of their projects meet goals and original business intent. Organizations with more than 80 percent of projects with actively engaged executive sponsors have an average of 65 percent more projects meeting goals. Organizations with less than 50 percent of projects with actively engaged executive sponsors have an average of 46 percent of projects meeting goals. And organizations that align their EPMO to strategy report 27 percent more projects completed successfully and 42 percent fewer projects with scope creep.
To realize the benefits of project management practices, project leaders must also make executives aware of the gaps within their organizations. The Pulse report found that executives and PMO directors often have different perspectives on the organization's ability to successfully formulate strategy, prioritize and fund projects, execute strategic projects and identify lessons learned. For instance, 83 percent of executive leaders believe their organizations successfully formulate strategy appropriate for changing market conditions, compared to 59 percent of PMO directors. Similarly, nearly three-quarters of executives said their organization fully understands the value of project management, while less than half of PMO directors said the same.
To bridge these gaps—and create a culture that understands and values project and program management—change must start at the top. But the end results will boost project success rates and the bottom line. PM
High performance and project management maturity go hand in hand—but many organizations are still in the slow lane.
ON TARGET
Having proven project, program and portfolio management practices in place makes a dramatic difference in project performance.
89% of projects at high-performing organizations meet original goals and business intent. (High performers complete 80 percent or more of projects on time, on budget and meeting original goals.)
34% of projects at low-performing organizations meet original goals and business intent. (Low performers complete 60% or fewer of projects on time, on budget and meeting original goals.)
BUILDING BLOCKS
At organizations that place a high priority on creating a culture that recognizes the importance of project management:
71% of projects meet original goals and business intent, compared with 52% at organizations that make it a low priority.
But most organizations aren't making the connection:
38% of organizations place a high priority on creating a culture that recognizes the importance of project management.
DOWN THE DRAIN
US$122 million Amount organizations waste on projects for every US$1 billion invested, due to poor project performance.
That's a 12% increase from 2015.
MISSED OPPORTUNITIES
Fewer organizations are leveraging key success factors compared to last year:
Apply standardized project management practices organization-wide
Have a formal knowledge transfer process
Projects that are strategic initiatives
Projects that have actively engaged executive sponsors
FIGHTING INERTIA
of organizations report high benefits realization maturity (no change since 2013).
of organizations have a PMO (no change since 2012).
THE TALENT TRIANGLE
25% of organizations consider leadership, business and strategic management skills, and technical skills a priority. (Of those organizations, 40% more of their projects meet the original goals and business intent.)
32% more projects are successful in organizations that invest in ongoing project management training, offer a defined project management career path and establish formal knowledge transfer processes.
GET IN SYNC
49% of organizations have an enterprise-wide project management office (EPMO).
Among organizations that have an EPMO:
44% are highly aligned with organizational strategy.
Among organizations that align their EPMO with strategy:
27% more projects are completed successfully.
42% fewer projects have scope creep.
SUPPORT FROM ABOVE
An actively engaged executive sponsor is the top driver of project and program success:
3 in 5 projects have engaged executive sponsors.
65% Organizations with more than 80% of projects that have executive sponsor support have 65% more projects that are successful.
Source: Pulse of the Profession®, PMI, 2016 (Methodology: 2,428 project management practitioners, 192 senior executives and 282 PMO directors around the world were surveyed in October 2015.)