Performance Measurement
December 9, 2014

Effective project management goes right to your bottom line

While government agencies do not have “bottom lines” in the way private sector organizations do, agency leaders are “under the microscope” at least as much (or possibly more) than their private sector colleagues to reduce or eliminate financial waste.

PMI’s 2014 Pulse of the Profession research shows that organizations are losing an average of $109 million for every $1 billion spent on projects. PMI’s Pulse research surveys the project management profession annually, providing analysis on trends within organizations. The report from the 2014 research highlights several key practices that organizations can use to improve their performance to reduce this risk.

The report shows that high alignment of projects and programs to organizational strategy is integral to success. Very important to successful strategies in 2014 is the growing power of tech-savvy, informed customers (meaning, in the case of government organizations, taxpayers). Research by IBM and PwC stresses the importance of collaborating with customers and building a customer-centred organization.

Being a High Performer
Pulse research distinguishes high-performing organizations from low performers by the percentage of projects completed on time, within budget and meeting original goals and business intents. Organizations with projects meeting these three measures 80 percent of the time or more are considered high performers, while those with 60 percent or fewer are considered low performers.

By looking at what high performers do to achieve success, those government agencies with less-than-stellar project results can garner some lessons learned.

People, Processes and Outcomes
The Pulse study finds that high performers focus on:

• People (developing talent and practices for developing talent; effective knowledge transfer; managing employees through organizational change; ensuring that executive sponsors are in place to help drive organizational change);
• Processes (standardizing and maturing project, program and portfolio management practices); and
• Outcomes (ensuring that a project’s outcome produces the projected benefits claimed by the business case).The report identifies several talent management practices that significantly more high-performing organizations have in place: ongoing project manager training; formal processes to develop project manager competency and mature project management practices; formal and effective knowledge transfer processes; and a defined career path.

The report also shows that high performers are significantly more likely than low performers to: understand the value of project management; have a project management office; have standardized practices in place; and have high project, program and portfolio management maturity.

Regarding benefits realization, high performers effectively identify, measure and communicate the intended benefits of their projects and programs. Organizations highly mature in benefits realization average 73 percent of their strategic initiatives meeting goals and business intent, compared with 44 percent for organizations with low maturity in benefits realization.

Additionally, high performers are three times more likely than low performers (31 percent versus 9 percent) to have high levels of organizational agility. They are in a better position to adapt when new strategic initiatives are needed to address shifts in consumer demands and expectations that ultimately shape strategy.

The message of this Pulse research for Canadian government organizations points toward investing in creating a strong project management culture. In order to become a high performer, focus on people, processes and outcomes. Not only will you increase your projects’ success rate, you will improve your agency’s “bottom line.”

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