A five-point plan for project success

European businesses are improving their project management approach. For those still lagging, Project Management Institute research has revealed the five areas on which to focus

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Project success depends on forethought and dedicated executive support

As European organisations face increasingly complex challenges resulting from the demands of a rapidly changing business environment, staying competitive calls for effective management of projects and programmes. Successful organisations understand the benefits of disciplined project delivery: lower costs, greater efficiencies, improved customer and stakeholder satisfaction, and greater competitive advantage. We have always called for organisations to shift their thinking with regard to projects and programmes, and have urged organisations to embrace project management as a strategic competency for success. It appears through our latest research that organisations are listening.

Research unveiled earlier this year demonstrates that organisations in Europe and around the world are making meaningful improvements when it comes to the amount of money they waste on projects and programmes. For the first time in five years, we are seeing an increase in the number of projects meeting goals and being completed within budget. We first reported these findings earlier this year in our 2017 Pulse of the Profession report: Success rates rise: transforming the high cost of low performance, an annual survey that has tracked the major trends for project management around the globe since 2006. It is encouraging that organisations worldwide are making significant progress with success in implementing projects – the strategic initiatives that drive change.

This year’s data specifically showed that organisations in Europe wasted an average of €131m for every €1bn invested in projects and programmes due to poor project performance. This represents a significant improvement over the previous year, when organisations in Europe wasted an average of €141m for every €1bn invested in projects and programmes.

Projects and programmes are the core of any organisation’s strategic initiatives – they are how change happens

While progress is still needed, these results compare favourably to the improvement seen around the globe. The study found that, globally, organisations wasted an average of €97m for every €1bn invested in projects and programmes in 2016, compared to an average of €122m per €1bn in the year prior. Compared with last year, there was also a 20 percent decline in money lost due to poor project performance. Furthermore, organisations that invest in proven project management practices waste 28 times less money because more of their strategic initiatives are completed successfully. Our research showed that organisations are following five practices that are leading to improved project performance.

Developing talent
Projects and programmes are the core of any organisation’s strategic initiatives – they are how change happens. Having the talent to implement those initiatives successfully is the critical capability that gives organisations a competitive advantage to navigate through necessary change.

This means developing the technical, leadership, and business management skills of project professionals. When organisations focus on all three areas, 32 percent more projects meet original goals.

Realising benefits
Benefits realisation management – the collective process of identifying benefits at the outset of a project and ensuring those benefits are realised and sustained once the project ends – is key to ensuring that projects deliver value, and a powerful way to align projects, programmes, and portfolios to an organisation’s overarching strategy. Success is too often defined strictly in terms of whether projects are completed on time or on budget.

Successful organisations are taking steps to establish procedures for identifying benefits and monitoring progress toward achieving them throughout the project life cycle and beyond. One in three organisations (31 percent) reports high benefits realisation maturity. In Europe, 30 percent of organisations reported high benefits realisation maturity compared to the previous year’s 16 percent.

Leveraging delivery capability
Organisations are bridging the gap between high-level strategic vision and implementation by establishing project management offices (PMOs) and strategic enterprise project management offices (EPMOs) as a central delivery authority. PMOs are well-placed to be the conduit for executing an organisation’s portfolio of projects and strategic initiatives. The strategic role of a PMO is vital, often including the alignment of the project’s portfolio to strategy, monitoring progress and optimising delivery of strategy, navigating risk, driving benefits realisation, enhancing governance and accountability, and managing talent.

The percentage of organisations with a PMO continues to trend upward – from 61 percent in 2007 to 71 percent today. Among organisations in our survey that have a PMO, half report having an EPMO. And those that have a strategic EPMO report 38 percent more projects meet original goals and 33 percent fewer projects are deemed failures.

Strategic use of executive sponsors
Our research consistently shows that an actively engaged executive sponsor is the top driver of projects meeting their original goals and business intent. The best executive sponsors have detailed knowledge of a project and how it connects to business strategy, use their position and authority to clear roadblocks, make quick and effective decisions, and ensure appropriate resource allocation.

This year, organisations reported more of their projects have active sponsors – 62 percent, compared to 59 percent in the year prior.

Increasing agility
In order to retain flexibility to respond quickly to changing market conditions, more organisations are embracing a mix of value delivery approaches, including agile methods. 71 percent of organisations report they use agile approaches as part of their project management practice portfolio more frequently than in the past.

The most forward-thinking organisations are embracing a continuum of practices that range from predictive to agile, well-defined to iterative, and from more to less controlled. About a quarter of organisations are using hybrid or customised approaches that match techniques to the specific needs of the project and stakeholder group.

While it is promising that organisations are making improvements with the implementation of projects, there is still work to be done. As the global business climate continues to change at a rapid pace, any organisation looking for greater success with projects would be well served by focusing on these five key areas of project management.