Wednesday 29 March 2023

Firms losing millions due to poor project management

PHILADELPHIA, February 6, 2016

Organisations around the world waste an average of $122 million for every $1 billion spent on projects as a result of poor project management practices, said a report.

This represents an increase of 12 per cent over last year, stated Project Management Institute’s (PMI) 2016 report 'Pulse of the Profession: The High Cost of Low Performance.'

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 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 geographic regions covered in the report, the Middle East reported the lowest average monetary waste on spending projects: $99 million per $1 billion spent.

Conversely, Brazil reported the highest average waste on project spending: $202 million for every $1 billion spent. North America came in under the global average, wasting on average $119 million for every $1 billion spent.

Of the industries included in the study, government agencies had the lowest average monetary waste on spending projects: $108 per $1 billion spent. Financial services reported the highest average waste on project spending: $149 million per $1 billion spent.

The 2016 Pulse of the Profession findings show that organisations that effectively use formal project, programme and portfolio management practices waste 13 times less than organisations that don’t; however, the report also demonstrates that few organisations are successfully embracing these proven capabilities.

The report pointed out that organisations should place a greater emphasis on project management training and development, strategic alignment and benefits realisation.

Further, more organisations should utilise executive sponsors who can lend project support from the C-suite, it added.

Commenting on the results, PMI president and CEO Mark A. Langley, said: "Again this year, our Pulse of the Profession findings demonstrate that organisations aren’t paying enough attention to their ability to execute against their strategy."

"Projects, even those identified as an organisation’s strategic initiatives, are failing, which results in wasted money, resources and time. That is not a sustainable business practice, and it is time to focus on what matters," he remarked.

”Organisations must take another look at project management as the strategic competency that drives success,” stated Langley.

On the ways to plug the wastage, the report said one needed to look beyond technical skills.

Effective project and programme management relies on blending technical skills with broader leadership and business qualities. The most successful organisations empower well-rounded professionals capable of overseeing long-range strategic objectives, stated the report.

Organisations that expand their focus in this way see 40 per cent more of their projects meet goals and original business intent, it added.

The PMI report also called for recognition of the strategic role of an enterprise-wide project management office and get it aligned to strategy.-TradeArabia News Service

Tags: Middle East | project management |

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