2016 Pulse of the Profession®: The High Cost of Low Performance Demonstrates Need
For Stronger Worldwide Implementation of Project, Program and Portfolio Management
Mumbai, February 08, 2016: Project Management Institute’s (PMI) 2016 Pulse of the Profession®: The High Cost of Low Performance reveals organizations around the world waste an average of USD 122 million for every USD 1 billion spent on projects as a result of poor project management practices. Amid worsening project outcomes, increased competition, an uncertain economy and other disruptive global trends, the report identifies a number of ways organizations can improve their performance.
The 2016 Pulse of the Profession findings show that organizations that effectively use formal project, program and portfolio management practices waste 13 times less than organizations that don’t; however, the report also demonstrates that few organizations are successfully embracing these proven capabilities. The report concludes that organizations should place a greater emphasis on project management training and development, strategic alignment and benefits realization. Further, more organizations should utilize executive sponsors who can lend project support from the C-suite.
Commenting on the report Mr. Raj Kalady, Managing Director PMI India said, “This year’s Pulse of Profession report has again highlighted the urgent need of incorporating project management practices. It is observed that lack of key organizational capabilities is one of the key reasons that lead to weaker project outcomes across organisations. The report reinforces both tangible and intangible value that project management delivers to an organization, including risk reduction, cost saving, and, of course, more successful projects and programs”
”Organizations should consider project management as the strategic competency that can drive success.” he added.
The 2016 Pulse of the Profession features feedback and insights from 2,428 project management practitioners, 192 senior executives and 282 Project Management Office (PMO) directors from a range of industries including government, financial services, information technology, telecom, energy, manufacturing, healthcare and construction. It also includes insights from eight corporate leaders and 10 PMO directors and directors of project management. The global totals in the report represent feedback from North America, Latin America, Europe, the Middle East, and the Asia Pacific region.
Of the industries included in the study, Financial services reported the highest average waste on project spending: USD 149 million per USD 1 billion spent.
Sudhakar Kesavan, Chairman and CEO at ICF International Inc. said, “We are doing more training across the firm to make sure people understand that project management is a learned skill,” adding that an organization can’t just make decisions as they go along. “The more project management expertise we have, the less likelihood of complications with the client, overruns and cost issues,” he continued. “We need to train people so that we can have fewer issues with projects as they are run.”
Recommendations
- Look beyond technical skills. Effective project and program management relies on blending technical skills with broader leadership and business qualities. The most successful organizations empower well-rounded professionals capable of overseeing long-range strategic objectives. Organizations that expand their focus in this way see 40 percent more of their projects meet goals and original business intent.
- Recognize the strategic role of an enterprise-wide project management office (EPMO) and get it aligned to strategy. Project Management Offices are essential to overseeing strategic initiatives throughout an organization. This dedicated group can lead to significantly improved business outcomes. Organizations that align their EPMO to strategy report 27 percent more projects completed successfully and 42 percent fewer projects with scope creep.
- Drive success with executive sponsors. Executive sponsors are uniquely positioned to overcome barriers to successful project outcomes. They are able to secure funding, champion strategies and objectives and foster collaboration within an organization. As a result, when more than 80 percent of projects have an actively engaged executive sponsor, 65 percent more projects are successful.
In addition to tracking trends in project management, this year’s Pulse of the Profession incorporates insights from executive leaders and PMO directors to report their perspectives on why higher project success rates aren’t being achieved. Among the chief findings:
- Executive and PMO heads perceive project management differently.
Executive leaders and PMO directors do not view organizational success and the benefits of project management in the same way. They have significantly disparate views about their organization’s performance when it comes to formulating strategy, prioritizing and funding projects, executing strategic projects, and recognizing lessons learned. Additional gaps in perception exist between the benefits of using formal project management and improving risk identification and management, success with complex projects, customer satisfaction, and success with organizational change.
About PMI:
PMI is the world’s leading not-for-profit professional membership association for the project, program and portfolio management profession. PMI delivers value for more than 2.9 million professionals working in nearly every country in the world through global advocacy, collaboration, education and research.
For more information log on to: www.pmi.org