Is it good news when the losses are less? The Project Management Institute (PMI) seems to think so. In a new report on success rates, the organization pointed to a decrease in waste as a sign of progress. Specifically, a research project recently found that organizations wasted an average of $97 million for every $1 billion invested in projects and programs in 2016; that’s down by 20 percent from an average of $122 million waste per $1 billion in the previous year.
In other words, PMI’s 2017 Pulse of the Profession®: Success Rates Rise: Transforming the High Cost of Low Performance, declared, “More projects are meeting original goals and business intent while being completed within budget — and…fewer projects are deemed failures.” The most prevalent cause of failures reported for projects was a change in the organization’s priorities.
The research drew on responses from 3,234 professionals globally who represent diverse levels of experience and industries.
The new report has defined two types of organizations:
- “Champions” are companies or agencies that have high benefits realization maturity; 80 percent or more of projects are done on time and on budget and meet original goals; and
- “Underperformers” have low benefits realization maturity and see 60 percent or fewer projects done on time or on budget or meeting original goals.
The champions, according to PMI, have a 92 percent success rate with their projects vs. 33 percent of underperformers.
The project leaders have shown expertise in several areas:
- Developing project management talent. Thirty-two percent of survey respondents consider both technical and leadership skills a high priority — a three percent increase over last year.
- Managing project benefits. One in three organizations (31 percent) reports high benefits realization maturity.
- Establishing project management offices (PMOs), either program-wide or enterprise-wide. Among organizations in the survey that have a PMO, half report having an enterprise project management office (EPMO). Those environments where the EPMO is aligned to company strategy report 38 percent more projects meeting original goals and business intent and a third fewer projects deemed failures.
- Locking down executive sponsorship. As has been true seemingly forever, projects with actively engaged executive sponsors continue to do better at meeting the original goals. Survey respondents said they’re doing better at this; the number of projects with actively engaged sponsors grew from an average of 59 percent last year to an average of 62 percent this year.
- Mastering agile as a technique for managing projects. More than seven in 10 organizations (71 percent) reported the use of agile approaches for their projects “sometimes” or more frequently.
“We are encouraged to see that organizations are making significant progress and experiencing more success with implementing strategic initiatives and delivering intended project benefits,” said PMI President and CEO Mark Langley, in a prepared statement. “We have long advocated that project management is essential for any organization’s success and are excited that others are increasingly realizing this fact as well. Organizations that invest in proven project management practices waste 28 times less money because more of their strategic initiatives are completed successfully.”
The most efficient industries included in the study were IT, whose waste level was $78 million per $1 billion; construction, where waste ran $94 million per $1 billion; and financial services, where the waste ran $97 million per billion.
Of regions of the world, the most efficient was India, the lowest average monetary waste on projects was $73 million per $1 billion, followed by both China and the Middle East, where waste ran $82 million per $1 billion.