Project Management Institute: UK Organizations Risk Millions for Every Billion Spent on Projects

Unknown, 2013-03-16

A new study announced by The Project Management Institute (PMI) found that UK organizations risk on average GBP169 million for every GBP1 billion spent-higher than the GBP135 million for every GBP1 billion risked by companies that make up the global average.

According to a release, research also shows that high-performing organizations that implement success measures mitigate risk by improving their project and program outcomes; 90 percent of their projects are meeting original goals and business intent (compared to 36 percent success rate for low performing organizations), and they risk 14 times less than their low-performing counterparts, creating a significant competitive advantage.

"These findings should concern executives, particularly in today's complex business landscape," said PMI President and CEO Mark A. Langley, who unveiled the Pulse of the Profession findings today at a meeting attended by high-level project and program executives from leading UK organizations. "When organizations continue getting better at executing their projects and programs, they drive success. But when executives undervalue the benefit of effective project, program and portfolio management-strategic initiative management- they put real money, and their futures, at risk."

PMI said risk looms for many organizations. According to the 2013 Pulse of the Profession, 59 percent of organizations in the UK understand the value of project management, slightly higher than in the global sample. Compared to the average, UK companies demonstrate an approach to project management, with 54 percent of UK respondents reporting that their organization has a formal process for developing project manager competency compared to 45 percent globally. Slightly more than half of UK companies also have a defined career path for those engaged in project or programme management, compared to 42 percent globally.

Even so, project success rates are declining, with fewer than two- thirds of projects meeting their original goals or business intent - a significant decline since 2010. Conversely, the number of projects experiencing scope creep globally has risen from 41 percent in 2010 to 45 percent. In effect, across the globe, projects are becoming less successful and more expensive.

Though PMI's Pulse of the Profession survey uncovered these declines, however, it also revealed positive movement in the strategic application of project management practices and alignment with an organization's broader business goals. More than three- quarters of project managers (76 percent) say their projects are better aligned to organizational strategy.

In this complex environment, the Company said aligning with overall organizational strategy and understanding what it takes to become a high performer - completing 80 percent or more of projects on time, on budget and within goals - has the potential to affect an organization's outcomes. The Pulse finds that organizations looking to become high performers are significantly more likely to focus on three key factors:

-Talent management. High-performing organizations provide consistent, continuous training and development for project managers to enhance organizational success. They are significantly more likely than low performers to provide a defined career path for project managers, a process to develop project management competency and training on the use of project management tools and techniques.

-Standardization. Standardization leads to an efficient use of resources, which allows more time and resources to focus on products and services-and leads to a competitive advantage. High performing organizations are almost three times more likely than low- performing organizations (36 percent vs. 13 percent) to use standardized practices throughout the organization, and have better project outcomes as a result.

-Strategic Alignment. High-performing organizations are at least four times more likely than low-performing organizations to have achieved maturity in their project management practices. The Pulse data show that more mature project, program and portfolio management practices lead to better project performance. Organizations with successful project management practices, integrated benefits realization processes, and aligned portfolio management capabilities along with high organizational agility all have significantly better project outcomes than their counterparts.

More information:

www.PMI.org

((Comments on this story may be sent to newsdesk@closeupmedia.com))

A service of YellowBrix, Inc.