November 15, 2018

Transcription

1 November 15, 2018

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3 Executive Summary Project management best practices are critical to organizational success, but they are inconsistently applied. This results in over 50% of projects being unsuccessful. Little wonder that C level executives are frustrated with disappointing projects that hamper achievement of corporate strategic goals. Project sponsors inadvertently contribute to this problem by not implementing important and well-known project and portfolio management best practices. Consistent, enterprise-wide application of best practices can dramatically increase project success. Managers can achieve this by: (a) taking a holistic approach to portfolio and project management practices; and (b) creating a process-based, best practices-driven organization.

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5 1 Project and portfolio management best practices are not new. It is important that both project managers and sponsors follow these best practices. Best practices, after all, tend to work across all projects. So, why reinvent or rediscover processes that have been known to work? Between project managers and sponsors, sponsors are far more instrumental in driving best practices. W. Edwards Deming was one of the first people to recognize (over 50 years ago) that good processes were required to consistently produce a quality product over time. It was not enough to hire good people and train them. Good people can still struggle when working in chaotic processes. Deming also believed that over 85% of the ability to change and optimize processes was in management s hands. He would tell sponsors to fix the processes not tell the workers to do better. A common answer is that this is the responsibility of a project management office (PMO). A PMO is a group that specializes in project and portfolio management processes. However, as Deming said decades ago, management is ultimately responsible for (all) processes in an organization. Sponsors can ask a PMO to help craft and implement an optimized set of project and portfolio management processes, but it is still up to the management team to sponsor the processes, implement the processes, and enforce the processes. Many PMOs do a stellar job creating these processes, but they are usually not the right group to enforce them. The implementation and enforcement of the processes falls squarely in the management wheelhouse. Sponsors miss the mark when they lament about the PMO s inability to implement best practices. They often play a role inadvertently, of course in exacerbating the issue. The management team is responsible for developing, optimizing, enforcing, and monitoring the business processes in the organization. This includes operational functions and processes such as Sales & Marketing, Customer Management, Supply Chain Management, and Finance. It includes project and portfolio management processes as well. For many sponsors, it is easier to assume responsibility for operational processes. Sponsors usually rise up the ranks in a functional organization and are more comfortable working with processes in their defined areas of expertise. But who in an organization specializes in the world of project and portfolio management processes? In September of 2018, TenStep conducted a survey to focus on this endemic issue. TenStep asked respondents about a set of project-related best practices that required management support to implement. In every case, the project managers and sponsors recognized the importance of the best practice to overall project success. Yet, both parties also agreed that there was a large gap between the level of importance and the actual implementation of the best practices.

6 2 For example, 89% of project managers and 90% of sponsors agreed that it was very important for project managers to have adequate time to plan a project. (The survey did not say one month or three months, but simply that there was adequate time. This does not seem too controversial.) Despite the importance, only 49% of project managers and 55% of sponsors state that project managers always or usually have enough time. This is somewhat surprising, coming from sponsors. Project managers are not usually going to shortchange their own planning time. This pressure to start executing projects must come from functional managers and sponsors. Even though sponsors understand that it is highly important to have enough time to plan the project, roughly onethird of the time this best practice is not followed. (The percentage of projects that are not properly planned may be as high as 45%, given that 10% of sponsors did not rate this a highly important best practice.) Assess the current state of project and portfolio management practices in the organization. Work as a management team on a collective vision for the desired future state. Create a roadmap of work to close the gap and move to the desired future state. To be effective, organizations need a holistic approach to implementing common project management and optimized portfolio management practices. It is not enough to merely implement common processes for managing schedules, budgets, risks, etc. (These are project management practices.) Success would be limited if the organization has too much work, too few resources, and lack of governance. (These are portfolio management processes.) The processes associated with project management, portfolio management, financial management, procurement management, and other processes must all be aligned. Executives are constantly wondering why so many projects in their organizations fall short of hitting scope, schedule, and budget expectations. Yet, one of the biggest reasons is right in front of them not following best practices in project and portfolio management that they know are important. It is possible, even likely, that projects will be more successful if they have adequate planning time, the right resources, proactive sponsor support, engaged stakeholders, etc. Image taken from Arden Consulting, Short Hills, NJ. USA, Ph: +1(973) The good news is that implementing wellunderstood best practices is within the collective control of the management team in every organization. Organizations can implement better practices with a well-known process current state, future state, gap. When implementing projects, look holistically at processes, people, and tools. Yes, it takes longer. However, a partial solution will likely only bring partial success. TenStep s SPOTM framework is a useful, holistic framework to conduct organizational assessments. We use the SPOTM framework to evaluate the current state of processes, organizational structure, technology, and metrics in an organization, driven

7 3 by and aligned with the company s corporate and divisional/business unit strategy. We then look at the future state across those same elements. The framework is an invaluable guide to ensure that we ve evaluated the enterprise holistically - across all the essential organizational elements. This discussion applies to Agile projects as well. Agile projects also need to implement a holistic set of Agile best practices that include processes, people, and tools. It is perhaps more important in Agile lest the entire Agile model collapse. It is likely that readers will see many of their own organizational characteristics in this survey. Read the details further. The most interesting points are highlighted in the detailed results. Study the results and resolve to do something about it. We hope that the findings will lead to a discussion within the management team on how to move to a best practices-based, process-driven organization in the future. C level executives are frustrated with disappointing projects that slow down achievement of their strategic goals. Sponsors inadvertently contribute to this problem by not implementing important and well-known project and portfolio management best practices.

8 4 Management Body of Knowledge (PMBOK Guide) from the Project Management Institute (PMI). Through this research we set out to assess: How well project managers and sponsors understand the importance of a set of project and portfolio management best practices. How often these practices are actually implemented on projects. If there is a difference in perception between project managers and sponsors. If there is a gap between the level of importance tied to these best practices and the actual use of these best practices on projects. If there is a perception gap between project managers and sponsors on project success. We summarize and discuss our findings in detail in the rest of this white paper. Sponsors or management refers to functional managers. Functional managers have staff reporting to them. Sometimes these functional managers are project sponsors. Sponsors are responsible for a project from a business perspective. Both terms are used as they are defined in A Guide to the Project Best practices refers to a specific set of processes and techniques that are considered beneficial to project success. Many are related to portfolio management. For example, the authors did not ask whether project managers communicated proactively on projects. This is a generic best practice, but it is mostly, if not entirely, within the control of a project manager. A project manager can choose to communicate proactively or not. Their ability to communicate is normally not impacted by functional managers or sponsors. The best practices chosen for this survey were those that most likely required management involvement. For example, we asked a question regarding whether the project manager was given a fixed deadline date rather than estimating the end date on his or her own. Since it is unlikely that a project manager would set this deadline, we can logically assume that any fixed deadline would come from a manager either a functional manager or the sponsor. These were the types of best practices that were of interest for this survey.

9 5 We asked these two questions for each best practice to ensure that the practices were, in fact, important from the responder s perception. It would be easy to dismiss a best practice, for example, if the respondents did not think the best practice was important. We chose a subset of best practices that were heavily influenced by management. We designed different surveys for project managers and sponsors. We asked each group similar questions regarding the application of the chosen best practices. For each question, we also asked the respondent how important the best practice was. This ensured that we analyzed only the important best practices. This was a truly global survey. We invited over 30,000 respondents from around the world to participate. 331 project managers and 89 sponsors completed the survey. We designed the survey for two audiences with one set of questions targeted for project managers, and another for sponsors. The questions were the same except that we asked them in the context of the role of the respondent. For example, we asked project managers How often do you have enough time to properly manage a project?, while we asked sponsors How often do project managers have enough time to properly manage their projects? There were 17 best practices questions for each group. Many of the questions were related to portfolio management, but also have a direct impact on projects. For each of the 17 best practices, we asked each group two questions: 1. How often was the best practice actually applied on projects? 2. How important was the best practice? For each question, we asked each group about how often the best practice was applied. There were six possible answers: Always Usually Sometimes Rarely Never Not applicable/not sure Both groups were asked to respond from first-hand knowledge. Project managers were asked about projects that they managed. Sponsors were asked to respond regarding projects that they sponsored or oversaw. The survey authors understand that ratings of 1-10 allow a more nuanced answer, but they chose the 1-5 scale as it provided sufficient differentiation. The authors also considered that some surveyors prefer to have an even number of answers so that a respondent does not give the neutral middle 3 and is forced to choose one way or the other. This survey, however, did not ask for preferences, but for the perception of how often a best practice is observed. In this case, the sometimes in the middle seemed a valid option. The importance question allowed three responses: Very important Neutral Not important Again, the authors understand the preference that some researchers have for a larger rating scale, and for elimination of the neutral option. However, the authors are trying to keep the scales simple. In practice, only a small percentage of the respondents chose the neutral option, so this argument ended up being moot. Of the 17 questions on best practices, we eliminated one question, as we believed that the respondents might have been confused by the question.

10 6 In addition to 17 questions on best practices, we asked each group three questions regarding their perception of project success based on hitting expected scope, schedule, and budget. There are more potential success criteria, but the authors felt the three project constraints would be applicable and understandable to all respondents. The results of the following three questions are described in detail and are examples of the following eight questions, which are summarized later. We asked whether project managers were allowed to estimate their own end dates after detailed planning. Three things jump out: 1. Project managers (81%) and sponsors (82%) agree that this is a very important practice. 2. Despite the importance, project managers report that they are allowed to always or usually set their own start dates only 41% of the time. Sponsors have a slightly higher perception (46%) of how often it happens. 3. If 82% of sponsors think this practice is very important, it would be logical to think that the sponsors would apply this practice. However, there is a large gap (36-40%) between knowledge and practice. Even though project managers and sponsors agree this is important, the best practice is not applied 36-40% of the time on projects. Note that only 18% of respondents thought this was not an important best practice. Of these, only 3.5% thought this practice was low importance. The remainder rated it in the neutral middle.

11 7 The question: Are project managers allowed to estimate their own budget? 1. Project managers (75%) and sponsors (78%) agree that this is a very important practice. 2. In spite of the importance, project managers report that they are allowed to always or usually estimate their own start dates only 46% of the time. Sponsors have a slightly lower perception (42%) of how often it happens. 3. If 78% of sponsors think this practice is very important, it would be logical to think that the sponsors would actually implement this practice. There is, however, a large gap (29-36%) between knowing and doing. Even though project managers and sponsors agree this is important, they fail to apply the best practice on projects 29-36% of the time. Only 22% of respondents thought that this was not an important best practice. Of these, only 3.5% thought this practice was low importance. Are project managers given enough time to fully plan a project? 1. Project managers (89%) and sponsors (90%) agree that this is a very important practice. 2. Project managers report that they are always or usually given enough time only 49% of the time. Surprisingly, sponsors agree: project managers

12 8 always or usually have adequate time only 55% of the time. 3. If 90% of sponsors think this practice is very important, it would be logical to think that they would apply this practice. However, there is a large gap (35-40%) between knowing and doing. Even though project managers and sponsors agree this is important, the best practice is not applied 35-40% of the time on projects. While only 10% of manger respondents thought this was not an important best practice, none rated this of being low importance. The remainder rated the neutral middle. This trend continued through a similar set of best practices-related questions (see the table below). Question: How often do you... PM PM Importance Manager/ Sponsor Mgr/Spn Importance Average Gap Receive additional budget, when needed, for approved scope changes? Receive additional schedule, when needed, for approved scope changes? Have the right resources assigned to complete the project? 36% 78% 43% 80% 40% 43% 76% 40% 85% 39% 53% 94% 54% 84% 36% Have enough time to properly manage a project? 59% 92% 51% 89% 36% Have engaged stakeholders that provide sufficient project requirements? 50% 86% 56% 74% 27% Have a fully committed project sponsor? 60% 86% 59% 83% 25% Have the full support of your functional manager? 62% 84% 72% 94% 22% Receive clear oversight from your sponsor, your manager, or a PMO? Questions Project managers and sponsors understand the importance of these best practices. On average, 84% rate these techniques as highly 48% 69% 55% 70% 18% important. Yet, on average, these practices are always or usually followed only 53% of the time a gap of 31%!

13 9 The question asked whether project managers were utilizing a common project management process on their projects. 1. Both groups agree it is important. However, sponsors viewed this practice as much more important (85%) than individual project managers (71%). 2. Project managers appear to be applying common project management practices in line with their perception of importance. In other words, 71% of project managers think this practice is important and 70% are always or usually applying the practice. This is one of the few questions where the importance and the practice line up. On the other hand, sponsors rate the importance much higher, and the utilization somewhat lower. In other words, if project managers are applying common processes, the sponsors are not always seeing it.

14 10 The question asked whether project managers were utilizing a common project lifecycle process on their projects. 1. Interestingly, this is the only question where project managers rate the application of the best practice higher than the importance. Sponsors rate this as much more important about as important as any best practice on the survey. 2. The difference between project manager and sponsor perceptions is 38%--the largest gap between the groups in the survey! We asked whether project managers understood the business value of a project. 1. Project managers (86%) and sponsors (85%) agree this is an important practice. 2. There is a large gap between the perceptions of whether the project manager always or usually knows the business value. Project managers think they understand business value (81%), while the sponsors are not so sure (59%). The difference between project manager and sponsor perceptions is 22% - quite significant, since in most areas there is much closer agreement. The question asked whether project managers understood how the project aligns to organizational goals. 1. Project managers (80%) and sponsors (89%) agree this is an important practice. Sponsors put more weight on this than project managers.

15 11 2. Both groups think that project managers understand alignment about 75% of the time. This results in a small gap for project managers, but a much larger gap (of 14%) for sponsors. Still, compared with other gaps between importance and practice, this gap is relatively small. This is an area that seems to be getting more attention. The survey asked whether projects were successful. The results seem to indicate that the two groups are rating different projects! 1. Project managers think they are generally hitting expectations for scope (68%), schedule (60%), and budget (58%). 2. Sponsors view projects as being much less successful less than 50% in all categories. The biggest gap is whether projects deliver the expected scope of work. Project managers say they always or usually deliver the project scope 68% of the time. Sponsors think they deliver to scope expectations only 41% of the time a gap of 27%. All three gaps are large, although they are slightly better for schedule and budget mostly because the project managers have lowered their perception of success in those two areas.

16 12 There are four high-level findings: 1. Since the survey focused on best practices that were heavily influenced by management, we expected that the importance level would be very high for project managers. After all, they are often impacted in these areas, and they are not usually in control. The survey results confirmed this perception. On the other hand, the authors thought that sponsors would not view these best practices with as high an importance. Since sponsors often set fixed end dates for projects, they may not have thought it was important for project managers to be allowed to set their own deadlines based on the planning. The findings are that both groups thought the chosen best practices were very important. 2. Both the project managers and sponsors tend to agree on how often these practices are followed. We were surprised by how close the responses were in most cases. The finding? The perceptions of both groups are very similar. 3. There was usually a gap, sometimes significant, between the importance of the best practice and how it was applied. 4. There is a large perception gap between project managers and sponsors on project success (based on schedule, budget, and scope). Organizations should strive to consistently implement these best practices. These best practices are not within the complete control of project managers. They require management support. Management understands the importance. PMOs can take the lead to close this gap with management sponsorship and support. Optimized portfolio management is the key to a number of the best practices, including staffing, oversight, and manager/sponsor support. Organizations should implement a consistent model for understanding project success. Project managers and sponsors need to agree on the project success criteria. Project success should be measured so that there is no difference in the perception of success. Sponsors think projects are on schedule, budget, and scope 40-41% of the time. This is very low. It is likely that more consistently applying recognized best practices can improve these numbers. PMOs should be working in this area to implement all these findings.

17 13 TenStep LLC ( is a global project management consulting and training company with operations in 35 countries. We help companies successfully execute their critical projects in four ways. Through our Consulting services, we ensure that organizational processes are aligned to support projects - by assessing projects and organizations, implementing project management best practices, optimizing portfolio management processes, starting and running Project Management Offices, implementing stronger governance models, and much more. Our PMO Outsourcing services help companies with four Cs : creating a focus on their core business, increasing PM capability, enabling flexible PM capacity, and lowering costs. Through our flexible Staffing solutions, we offer services ranging from qualifying candidates companies have selected to staffing their complete project team. TenStep s Training classes significantly enhance the project management skills across organizations. While every organization has projects, most struggle with successfully executing them. TenStep s consulting, outsourcing, staffing, and training services helps companies successfully implement projects and deliver strong stakeholder returns. TenStep s corporate portfolio also includes a communications training and consulting firm, and an onsite technical support, consulting, and training organization for global manufacturing companies. Tom Mochal, PMP is the President of TenStep. Tom is the author of Lessons in People Management" (a book on managing people), and a companion book on project management ( Lesson in Project Management. ) He won the Distinguished Contribution Award from the Project Management Institute (PMI) for his role in spreading knowledge of project management around the world. Tom consults with companies and organizations worldwide. He is a member of the Atlanta, Georgia (USA) chapter of the Project Management Institute (PMI), the American Management Association (AMA), and the American Society for the Advancement of Project Management (asapm ). Himanshu Kumar is the CEO of TenStep. Himanshu has global P&L, operations management, and project management experience across multiple industries--including integrated steel production, manufacturing, consulting, software services, and consumer packaged goods. In his 25+ years of management consulting and executive experience around the world, he has restructured, created, and managed best-in-class global operations for several Fortune 500 companies significantly increasing shareholder value in the process. He helped run a $1 billion APAC regional operation across 14 countries in Asia Pacific. He managed the Business Transformation function for the company s global business unit integrating country operations, managing highly complex transformation projects, and building and managing an innovative global IT organization across the US, Brazil, Hungary, China, Malaysia, and India.

18 14 Contact TenStep at TenStep LLC 30 Chatham Rd, #388 Short Hills, NJ

19 15 Tenstep LLC 30 Chatham Road, #388 Short Hills, NJ USA Phone Online