Projects are How Business is Done

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2 LEARNING OBJECTIVES Define project success Understand the risk of project failure and the financial impact of project failure Explore ways to drive project success through people, process, and outcomes

3 PROJECTS: TEMPORARY ENDEAVORS TO DELIVER A PRODUCT OR SERVICE Innovation/ Shape Our Future Transformation/ Organizational Change Urbanization/ Infrastructure Digitalization/ Process Innovations Globalization/ World is Flat Cooperation/ Network of Organizations Projects are How Business is Done

4 PROJECT SUCCESS FACTORS Scope, Quality Standards & Intended Business Benefits Time/ Schedule Cost/ Budget

5 PROJECTS SUCCESSFUL PROJECTS Met project business objectives; including all customer/user required features Delivered on time Completed within budget CHALLENGED PROJECTS Partially met project business objectives; missed some required features Delivered late Exceeded budget FAILED PROJECTS Undelivered Cancelled Unused Significant re-work required

6 37% Successful 60% CHAOS REPORT TRENDS 42% Challenged 50% 40% 30% Successful Challenged Failed 21% Failed 20% 10% 0%

7 2014? Only 56% of strategic initiatives meet their original goals and business intent PMI Pulse of the Profession, 2014

8 DOES EVERYONE KNOW THE $ AT RISK? Average Project Size in US $ 7.6% 16.5% 8.5% 31.4% <$1M $1M - <$10M $10M - <$100M $100M - <$500M >$500M 36.1% PwC, Insights and Trends: Current Portfolio, Programme, and Project Management Practices, 2012

9 FAILED PROJECTS For every US$1billion spent on projects, US$109 million is lost forever unrecoverable. % of Projects Not Meeting Goals % of Failed Projects Budget Lost % of Every Dollar at Risk PMI Pulse of the Profession, 2014

10 PROJECT FAILURE = DOLLARS LOST PMOs taking on a more $140 $120 $100 $120 $135 $109 strategic $80 role in the organization $60 $40 $20 $ PMI Pulse of the Profession, 2014

11 POOR PROJECT PERFORMANCE 1. Poor estimation during the planning phase 2. Lack of executive sponsorship 3. Poorly defined goals/objectives 4. Change(s) in scope mid-project 5. Poor communication 6. Lack of stakeholder involvement 7. Change in environment 8. Change in strategy 9. Inadequate risk planning 10. Lack of change management PwC, Insights and Trends: Current Portfolio, Programme, and Project Management Practices, 2012

12 MAKE PROJECT MANAGEMENT A COMPETITIVE ADVANTAGE Focus On People Talent Management HIGH PERFORMERS Outcomes Drive Strategic Alignment Support Standardized PM Process PMI, Pulse of the Profession, March 2013

13 STRATEGIC ALIGNMENT Aligning projects with strategic objectives has the greatest potential to add value to an organization. Organizations report three of five projects are not aligned to strategy. PMI, Pulse of the Profession, 2014

14 DRIVE STRATEGIC ALIGNMENT What business are we in? Why should we do the project? What would the business be like if the project was not undertaken? What is the vision/scope? Tied to overall corporate strategy Encompass short & long-term project benefits (outcomes) Agreed to by all stakeholders Written down!!! 10% 8% Drivers for Establishing Projects 6% 5% Business Imperative 30% 40% Revenue Generation Cost Reduction Regulatory Requirement Obsolete Tech Refresh Other Chart: PwC, Insights and Trends: Current Portfolio, Programme, and Project Management Practices, 2012

15 DRIVE STRATEGIC ALIGNMENT Fallacy: Numerical goals Redefinition of terms Distortion and faking Running up costs Fallacy: ROI Fictional technology ROI numbers ignoring cost of business rearchitecture ROI rarely drives the technology investment decision Best for ME? What do you want the target to be? W. Edwards Deming, The New Economics Why Tech Projects Fail: 5 Unspoken Reasons, InformationWeek, August 22,2013

16 CUSTOMER INVOLVEMENT What are the end user requirements? Does the customer want innovation? No customer asked for electric lights No customer asked for photography No customer asked for the smart phone No customer asked for the tablet

17 CUSTOMER INVOLVEMENT 54% 10% Goal: Customers exert a Undertake projects CEO Perception of Customer Influence which create bigger influence on their organization s customers for life Limited Extent Some Extent 36% Large Extent business strategy than all but the C-suite itself The Customer-activated Enterprise: Insights from the Global C-suite Study, IBM, 2013

18 INSPECT WHAT YOU EXPECT Regular portfolio/project reviews Ensure projects align to strategy Confirm outcomes meet customer expectations Look for any unexpected environment changes Know project kill point

19 MAKE PROJECT MANAGEMENT A COMPETITIVE ADVANTAGE Focus On Talent Management HIGH PERFORMERS Drive Strategic Alignment Support Standardized PM PMI, Pulse of the Profession, March 2013

20 ACTIVE PROJECT SPONSORSHIP Fewer than two in three projects (63%) have actively engaged sponsors C-suite executives are often missing in action. Rather than micromanaging, C-suite executives should identify and focus on the key initiatives and projects that are strategically relevant. PMI, Pulse of the Profession, 2014

21 IMPROVE PROJECT COMMUNICATIONS COMMUNICATIONS AS A CRITICAL SUCCESS FACTOR Effective communication is associated with a 17% increase in finishing projects within budget Highly-effective communications practices are 1.7 times more likely to outperform their peers financially COMMUNICATIONS GAPS Understanding the business benefit Using unclear language peppered with jargon PMI, The Essential Role of Communications, May 2013

22 IMPROVE PROJECT COMMUNICATIONS For every US$1 billion spent on a project, US$75 million is at risk for ineffective communications % of Failed Projects Budget Lost % of Projects that Fail Due to Ineffective Communications % of Every Dollar at Risk Due to Ineffective Communications PMI, The Essential Role of Communications, May 2013

23 IMPROVE PROJECT COMMUNICATIONS Communication positively affected projects quality, scope, and business benefits Communication negatively impacted meeting schedule and budget objectives PwC, Insights and Trends: Current Portfolio, Programme, and Project Management Practices, 2012

24 IMPROVE PROJECT COMMUNICATIONS Close communications gap around business benefits Tailor communications to different stakeholder groups Use standardized project communication practices and use them effectively Formal communications plan Tools Formats Terminology PMI, The Essential Role of Communications, May 2013

25 PROCESS STANDARDIZATION: PWC PROJECT MANAGEMENT MATURITY MODEL Level 1 Sporadic Level 2 Initial Level 3 Implement Level 4 Monitor Level 5 Optimize Sporadic use of PM Lacking formal documentation and knowledge of PM standards Limited organizational support Formally approved PM methodology Follow basic processes; not standardized across all projects Lessons learned not gathered regularly Most projects implemented using approved PM methodology Management supports use of standards Approved PM methodology used on all projects and use is monitored Track project benefits Project support strategic plan PMO established Conduct regular renewal of PM methodology Standardized knowledge management and transfer process Focus on continuous improvement PwC, Insights and Trends: Current Portfolio, Programme, and Project Management Practices, 2012

26 MAKE PROJECT MANAGEMENT A COMPETITIVE ADVANTAGE Focus On Talent Management HIGH PERFORMERS Drive Strategic Alignment Support Standardized PM PMI, Pulse of the Profession, March 2013

27 GAP: The number of individuals fully prepared to lead and manage projects PMI STANDARDS 1. PMBOK Guide + 3 Extensions Software Construction Government 2. Program Management 3. Portfolio Management 4. OPM3 5. Risk Management 6. Earned Value Management 7. Project Configuration Management 8. Scheduling 9. Project Estimating TRAINING 449,803 PMI Members 282 Chapters 32 Communities of Practice 91 PMI Global Accreditation Center accredited degree programs in 46 institutions 603,216 PMPs 4,421,290 PMBOK Guide copies in circulation As of 31 January 2014 PMI Today, March 2014

28 CRITICAL PROJECT MANAGEMENT SKILLS PMI, Pulse of the Profession in Depth Study: Talent Management, 2013

29 MAKE TALENT A COMPETITIVE ADVANTAGE Recruiting project managers with strong leadership & business management skills Prioritizing and evolving talent management offerings Clearly defining career paths Integrating talent management programs across the organization Measuring talent-related outcomes Providing ongoing training for staff on use of project management tools and techniques PMI, Pulse of the Profession, 2013 & 2014

30 MAKE PROJECT MANAGEMENT A COMPETITIVE ADVANTAGE Focus On People Talent Management HIGH PERFORMERS Outcomes Drive Strategic Alignment Support Standardized PM Process PMI, Pulse of the Profession, March 2013

31 POOR PROJECT PERFORMANCE 1. Poor estimation during the planning phase 2. Lack of executive sponsorship 3. Poorly defined goals/objectives 4. Change(s) in scope mid-project 5. Poor communication 6. Lack of stakeholder involvement 7. Change in environment 8. Change in strategy 9. Inadequate risk planning 10. Lack of change management PwC, Insights and Trends: Current Portfolio, Programme, and Project Management Practices, 2012

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