Project Success Improves in Europe, But More Progress is Needed By Mark A. Langley, President and CEO, Project Management Institute
Since 2006, Project Management Institute’s (PMI) annual Pulse of the Profession study has tracked the major trends for project management around the globe. This year’s report yielded positive news; the 2017 Pulse of the Profession®: Success Rates Rise: Transforming the High Cost of Low Performance demonstrated that for the first time in five years, the percentage of projects meeting original goals and business intent and being completed within budget has increased. In addition, organisations around the globe reduced the amount of money they wasted on projects and programs by 20 percent compared to a year ago.
The latest Pulse found that organisations worldwide wasted an average of 97 million Euros for every one billion invested — the lowest number we have seen since we began tracking this metric in 2006.
However, while this year’s results showed that organisations are improving open the implementation of their strategic initiatives, this year’s study also demonstrates that European organisations are not achieving the same project success rates as those in other parts of the world. Our research demonstrated that European organisations waste 131 million Euros for every one billion invested, or 13.1% of their budgets. While this figure is an improvement compared to a year ago (141 million Euros wasted for every one billion invested), it still represents the highest wastage figure among the five regions surveyed (North America, Latin America, Europe, the Middle East and Asia Pacific). In addition, fewer projects in European organisations meet their goals and business intent, fewer are completed on time or within budget, and more projects are deemed failures.
These findings are a clear indication that while project success rates are improving overall, there is still work to be done — particularly among European organisations. When organisations embark on projects and programs, they do so with a clear mission: to add value, advance strategies, and increase competitive advantage. The more mature they are with project management, the more likely they will be to achieve their missions. PMI has long advocated that project management is essential for any organisation’s success, and is excited that others increasingly realise this fact as well. Organisations that invest in proven project management practices waste 28 times less money because more of their strategic initiatives are completed successfully. And, in PMI’s latest research, only 27 percent of organisations report low project management maturity.
Organisations throughout Europe, as in other parts of the world, are facing dramatic shifts related to technology, changing customer expectations and demographics that challenge traditional approaches to defining and achieving organisational success. An organisation’s ability to effectively navigate these changes will rely largely on its ability to implement strategic initiatives — which in turn depends on its maturity with various aspects of project management. The market conditions described above will demand continued commitment to excellence in project and program management and practices. The results of this year’s Pulse suggest that organisations are recognising their success depends on the success of their strategic initiatives — the kinds of projects and programs that drive change, enhance competitive advantage and fuel growth.
Companies aren’t the only organisations recognising the benefits of project management. The United States recently signed into law S.1550, the Program Management Improvement and Accountability Act of 2015 (PMIAA), which is designed to enhance accountability and best practices in project and program management throughout the federal government.
The legislation was approved by both chambers of the United States Congress with overwhelming bi-partisan support and signed into law late last year by then-United States President Barack Obama.
The PMIAA mandates the formal implementation of project management throughout the federal government to make it more consistent, efficient and effective. The legislation provides a framework for carrying out policy that corrects widespread inefficiencies, such as unnecessary cost overruns and preventable delays in meeting program goals and deadlines. The PMIAA works to improve service delivery, enable projects to be funded by the government — for instance, hospital construction and infrastructure development — and improves the ability of citizens and businesses to reap benefits from the spending of their tax dollars.
The law focuses on four items to reform federal program management policy. It creates a formal job series and career path for program managers, develops standard-based program management policy, recognises the essential role of executive sponsorship and shares knowledge of successful approaches to program management through an interagency council on project management.
The findings align with PMI’s Pulse of the Profession report that found organisations in the government industry waste an average of 97 million Euros for every 1 billion Euros spent on projects. The report indicated that developing project management talent, managing project benefits, establishing Project Management Offices (PMO) and strategic Enterprise Project Management Offices, driving executive sponsorship and using agile approaches were fundamental building blocks for organizations that achieve more successful project performances. The PMIAA looks to implement some of these approaches in the federal government. PMI encourages other governments around the world to pursue similar legislation, which is designed to improve overall performance and deliver greater taxpayer value.
Improving program management leads to benefits such as increased collaboration, improved decision making, reduced risk and a better likelihood for an organization’s project to be completed successfully, on time and within budget. A significant reason why the United States decided to move forward with the PMIAA was because legislators, from all parties, identified the many benefits of project management — and how these benefits could lead to less taxpayer money being spent on projects that ultimately fail.
As the current United States federal administration begins to focus on rebuilding the national infrastructure, this legislation provides opportunity for the government to enhance the role of project management and realize its many benefits.
European nations have an opportunity to improve their success by implementing frameworks that increase the likelihood of success. While an increasing number of organisations and entities worldwide are recognising the need to adapt to changing market demands, research indicates that too many still fail to connect project and program management to strategy. In fact, they often view project and program management as operational; of those surveyed, 60 percent considered a department-specific PMO to be tactical and operations focused. As a longtime advocate for project management and its essential role in any organization’s success, PMI is encouraged to see that more organizations are increasingly taking actions to increase their ability to implement strategic initiatives and achieving their missions. PMI hopes that this figure continues to increase in 2017.
