Poor project performance saps money from organizations, taking a costly financial toll that is much higher than simply frustrated stakeholders. The Project Management Institute’s (PMI) recent Pulse of the Profession report estimates that for every $1 billion a company invests, $99 million is wasted, which translates to a loss of 9.9% to subpar project performance.
What Causes a Project to Fail?
While there isn’t a single driver for poor project performance, several key factors are often at the heart of failed projects:
- Organizations fail to move from strategy design to implementation.
- Executives don’t believe projects help deliver strategy.
- Project management isn’t viewed as a driver of the organization’s strategy.
Is Project Performance Improving?
However, as more companies begin to invest in project management, the PMI reports, project performance has improved in some cases. Overall waste has improved from a reported 13.5% in 2013, which represents a total 27% decrease. And, this savings tends to have a compounding effect, as organizations can use it to improve other areas, produce more product and increase overall revenue. However, the overall trend isn’t particularly established and the current trajectory is murky, as the 2017 PMI report actually reported better numbers than 2018. The takeaway here is that project performance doesn’t appear to have been mastered quite yet.
The Path to Improvement: Project Management Buy-In
Project management organizational buy-in is the clear solution to prevent poor performance. In a competitive landscape rife with disruption and regularly transformed by technology innovations, implementing successful strategy is paramount to an organization’s success. And putting that strategy in place requires strong project performance, with a skilled project manager at the helm. The numbers speak for themselves. Among organizations the PMI classified as a “Champion,” which is one that achieves projects on-time, in-budget, to goal and with achieved benefits at least 80% of the time, projects waste only an estimated 1.4% of money invested. By following proven project management practices, these champions often hold more mature project talent, expanded project capabilities and a culture that supports skilled project management professionals who are both equipped and empowered to drive necessary change.
Project management is critical to project success because it ensures one person is responsible for coordinating the end-to-end process, keeping stakeholders informed and contributors accountable. Without a project manager, everyone is narrowly focused on their part of the project. From inception to implementation, project managers plan and execute a project, watching budgeting, coordinating talent and preempting issues. While many organizations may ask their employees to follow project management practices, without someone at the helm to oversee the process and retain a larger perspective, Gallup suggests, even the best practices may fall short. Not only does a project manager ensure the steps of the project are followed, but he or she also addresses more nuanced items, like conflict, stakeholder sentiment, specificity of objectives, communication and leadership.
Solving the PM Talent Gap
A growing talent gap may also be at the root of many organizational challenges in realizing project success. Looking to the decade ahead, the PMI assessed that need for skilled project managers will only continue to grow, widening the gap of available, skilled professionals.
In addition to an explosion of jobs that require project-focused skillsets, a slew of retiring professionals have left behind an experience and talent deficit. Growing markets like China and India have also ignited demand for project management. By 2027, the PMI estimates this demand will reach 87.7 million project management-focused professionals across the globe. Businesses have an imperative to strive to close this talent gap, as unfilled roles are thought to represent a potential loss upwards of $207.9 billion in GDP through this time period, according to the PMI.
While those potential losses sound dire, for project management professionals either in the workforce or preparing to join the workforce, this need, coupled with advances and increased adoption of technology, represent ample opportunity for skilled professionals across a growing list of industries.
How to Get Started
To launch a career in project management, many professionals pursue certifications and degree programs in this field to establish an educational foundation for this highly-skilled career path. To be competitive, aspiring project managers should be well-versed in preferred project management practices and a master of the latest PMBOK Guide. With demand only expected to explode, companies will continue to invest in project management professionals because it’s too costly not to. To learn about Florida Tech’s 100% online project management programs, click here.