As a profession, the Project Management industry is less wasteful.
Specifically, more projects are achieving original goals. they’re coming in within budget and they are aligned with business strategy. Which all added up means that fewer projects are failing.
However, this should not be seen as ‘mission accomplished’ but more as the start of a trend that when looked back upon in five or ten years will really be something to hail as a huge success.
Thing is, that efficiency and success are addictive and once you have tasted them … you crave more. Thankfully there is plenty more of both to be achieved.
The PMI report has a really useful benchmark for measuring waste against spend that allows even the most casual observer a valuable insight. By measuring waste per billion dollars spent on projects it is easy to see which industry sectors and geographical regions are successfully combating the problem of waste and which could do more. Comparing waste against previous years’ data allows you to unpack trends and identify what works and what doesn’t.
The previous year, across all sectors, an average of $122 million was wasted for every $1 billion invested. This represented a 12 percent increase from the year before and was a trend in the wrong direction that sent a warning shot across the industry. The reason was clear … poor project performance. Simple as that. This year the story is a happier one. The trend has apparently been reversed and organisations throughout the world have reduced the average amount of money they wasted on IT projects to $97 million for every $1 billion spent … reducing waste by 20 percent year on year.
There are some individual sector and regional success stories but there are also some red flags that need to be addressed. Many sectors, for instance, are sitting considerably above that average $97 million waste figure and if the trend towards reducing waste is to continue or (as is hoped) accelerate energy ($101m), telecoms ($106m) and healthcare ($112) need to be a little more introspectively critical.
Similarly, while India ($73m) and China ($82m) can celebrate, to remain competitive Europe needs to reflect on reporting the highest average waste on IT project spending at an average busting $131 million wasted per $1 billion invested.
There are 7 clear lessons that can be learned and repeated moving forward and the more that they become habits the less wasteful Project Management will become.
Habit 1 Explore Project Management as a Service Solutions
It is in the interests of a good project management partner be more conscious of reducing waste. Most reputable partners will look towards recommendations or future work that you may put their way rather than padding out a job to fleece you on this one. Having said that there are stories of firms who take the longer route to project completion in order to bulk up their bill. Find a partner who is habitually on their ‘client’s side’ and who will really get to know your business strategy and corporate culture.
Habit 2 Align Business with Project Culture
Often, waste occurs when cultures within businesses and project teams are at odds with one another. For example, a business with “do it now, do it brilliantly, do it for the customer” written into its mission statement was hampered by a project leader who (you could argue rightly) kept a tight grip on scope within his portfolio. The problem was that he was SO inflexible that business opportunities were being missed. The CEO had a great attitude to scope creep and was happy to sign off on contingency budgets if there was customer benefit but the project leader was running his portfolio by the book and saw requesting extra money as a failure.
Habit 3 Develop Talent
32% of respondents told the PMI that they consider both technical and leadership skills a high priority, this is a 3% increase on last year. There are many ways that you can develop talent from traditional training and attainment of qualifications to what I call the positive contagion effect of complementing your in-house talent with talent from the PMaaS sector. An injection of new ideas, best practice and efficient operating methods usually leads to an improvement in skills and performance and that in turn tends to drive down waste.
Habit 4 Make Waste Reduction a Manageable Benefit
Almost a third of organisations (31%) report high benefits realisation maturity. Inevitably, when you identify intended benefits at the outset of your project you proceed in a deliberate, thoughtful manner when the project is live to make them happen. For instance, by stating that 5% sales hike, quantifiably faster order processing and measurable waste reduction, are project outcomes you improve your chances of achieving them. Be mindful during your project’s lifecycle that waste reduction, for example, is one of your pre-ordained benefits and you and your team will look for ways to turn intentions into results.
Habit 5 Stimulate Stakeholder and Sponsor Engagement
When everyone is bought into an IT Project’s mission it is amazing how potential risks, like scope creep, take care of themselves as no-one wants to be the person who throws a spanner in the works! Actively engaged executive sponsors remain the top driver of projects achieving their original goals and business intent with an average of 62% of projects reporting with actively engaged sponsors (up 3% on last year).
Habit 6 Develop an Effective PMO
Business strategies and project mission statements are better aligned in organisations that have an effective Project Management Office (PMO). Half of firms with a PMO report having an ‘enterprise project management office’ (EPMO) and 38% more projects meet original goals at organisations where their EPMO and business strategy are aligned and 33% fewer projects are deemed to have failed.
Any gaps in your PMO should be bridged to trim waste, a Project Management Assessment can help refocus and refine or redesign your project management capabilities and via the PMaaS market, you can access a complete range of Project Management services, including full Programme Management Office.
Habit 7 Celebrate Being Less Wasteful
It’s funny, of all the project outcomes that inspire the popping of Prosecco corks, reducing waste rarely seems to be celebrated. I suppose that it’s not as ‘sexy’ as an exciting business change delivered through IT or a vast software roll out. Celebrated it should be though and I am encouraged by the focus on waste reduction in the PMI’s Pulse report. So measure your waste and as you see a trend emerge, make sure that you have a bottle on ice ready to rejoice!
Start tomorrow to make these good habits part of your IT Project DNA and watch yourself magically become measurably more efficient.