Maturity matters PwC Belgium survey on programme and project management March 2014

Transcription

1 Maturity matters PwC Belgium survey on programme and project management March 2014

2 Table of content Executive summary....1 Introduction....2 Key findings...4 Part 1: Project performance...6 Part 2: Project management processes...8 Part 3: People and organisation...14 Part 4: Project management methodologies Let s talk...24

3 Executive summary In today s difficult economic times, organisations are faced with the challenges of fiercely competitive and changing environments driven by regulatory modification and organisational restructuring. Environmental forces - competitive, economic, technological, political, legal, demographic, and cultural - create challenges and opportunities for organisations. They must, therefore, continuously adapt to the environment if they are to survive and prosper. Top management are thus confronted with the critical task of analysing and improving the ability of an organisation to change, survive, and grow in a complex and changing global economy and volatile world. In order to stay competitive, today s organisations have been moving from operations and business as usual, to project management as part of their competitive advantage strategy. The ability to successfully execute projects is what drives the realisation of intended benefits and the achievement of business objectives. Organisations that execute projects successfully employ effective Project Management (PM) practices as a tool to drive change. Given the strategic impact that projects have on business, organisations must follow effective project management processes that capitalise on innovation; measure progress, value, and risks; and confirm that the right projects can be delivered in alignment with organisational strategy. In 2004, PwC invited senior executives and practitioners to participate in our first Global project management Survey. The survey s main objective was to investigate whether a higher maturity level would go hand in hand with higher project performance. In 2007, PwC conducted a similar survey to determine the current state of project management maturity in organisations across the world. The survey s main objective was to identify current trends in project management, and pinpoint the characteristics of project management that are applied to higher-performing projects. Beginning with the first survey in 2004, PwC sought to find the leading practices of successful companies, followed by the 2007 survey that validated three points: There is a link between higher maturity levels and high project performance. Senior management that supports project management-driven key initiatives achieves stronger business results. Effective project management is vital to many organisations. Now, with increased scrutiny over budgets and doing more with less, efficiency and effectiveness are key factors of successful organisations. In 2013, we decided to do a survey on the Belgian market to help identify correlations between PM and organisational success within our five key performance indicators (delivering projects on time, within budget, to scope, to quality standards, and with the intended business benefits). We continued our analysis to determine the current state of PM maturity on the Belgian market. The survey also sets out current trends and best practices in PM and the characteristics of higher performing projects. We evaluated what was working well, and where areas for improvement were needed within the PM discipline. We encourage you to share this report with your colleagues to help identify best practices across your organisation. We hope that this report provides you with a thorough view of PM trends. Additionally, we encourage you to share this report with your colleagues to help identify best practices across your organisation and to promote PM and its positive influence on business performance. PwC Belgium survey on programme and project management Maturity matters 1

4 Introduction Methodology The survey was conducted in 2013 with participation of 50 companies of various sizes, from different sectors and business industries in Belgium. Most of the study participants were executive management, functional management and project managers. The data was gathered via a webbased quantitative survey that consisted of 76 closed questions across different categories. Figure 1: Survey respondents industries We believe these survey results give us good insight into the collective opinions of the participants on a wide range of topics, such as: Project performance, aspects considered in this area are reasons for project failure and project success rates. Project management processes with a focus on project cost, benefit and risk management. People and organisational aspects. The use of project management methodologies and leading project management practices. Survey respondents profiles The largest participating industry was the Information Technology (IT) sector at 20.3%. Consulting was the second largest participating industry at 14.2%. We also noted that 84% of participants reported working in the private sector and 16% in the public sector. 2 PwC Belgium survey on programme and project management Maturity matters

5 Figure 2: Survey respondents positions (in %) Figure 3: Average number of projects per year at the survey respondents organisation (in %) Figure 4: Average value of projects at the survey respondents organisation (in %) Survey results show a balanced representation from all organisational levels. It was not only respondents involved in project, programme or portfolio management during their day-to-day job that participated in the survey. Rather, executive management and functional managers also represent a significant share of respondents. Refer to figure 2 for a complete breakdown of respondent functions. The average number of projects within the respondents organisations varies widely. The survey includes both a representative number of respondents (33%) from organisations that have less than 20 projects per year as well as respondents from organisations (35%) that have more than 100 projects yearly. Refer to figure 3 for a complete breakdown. From all the projects in an organisation s portfolio, the largest share of them (41%) has an average value between 100,000 and 500, % of respondents indicate that the average value is above 500,000. A complete breakdown of the structure of the average value of the projects, expressed in EUR, in a respondent s organisation s portfolio can be found in figure 4. Acknowledgements PwC would like to especially thank all organisations and individuals who took time to contribute to this study by completing the survey. PwC Belgium survey on programme and project management Maturity matters 3

6 Key findings Project performance #1 Poor scope management is the main reason for project failure #2 Delivering projects over budget and/or behind schedule has become the norm Project management processes #3 Organisations should have a mature project cost and budget management process #4 A well-established risk management process offers higher project performance scores #5 Business imperative is the main driver for projects #6 Systematically delivering project benefits successfully requires an active benefits management process People and organisation #7 Project Management Offices are not yet widely spread #8 Project management courses are widely provided by companies #9 Project management training enables organisation s business performance 4 PwC Belgium survey on programme and project management Maturity matters

7 Project management methodologies #10 Prince2 and PMBOK remain the dominant project management methodologies #11 Most organisations are open to new methodologies, but agile project management is not yet widely used #12 Agile project management approach has a positive impact on project efficiency and on the realisation of business goals #13 Earned Value Management has yet to gain popularity PwC Belgium survey on programme and project management Maturity matters 5

8 Part 1 Project performance Project performance 1 Poor scope management is the main reason for project failure The survey respondents were asked about the major reasons for project failure. As shown in Figure 5, the main reason for project failure is changes to the project scope in the middle of a project. Figure 5: Reasons for project failure (in %) Many stakeholders come up with new requirements, special wishes, etc. that were not agreed upon beforehand. Neither time, resources nor budget were foreseen to implement these changes, meaning the project team cannot (fully) comply, leaving the stakeholders unsatisfied with the outcome of the project. The top three most common reasons for project failure are completed by poorly defined goals/objectives and by poor estimates in the planning phase. 25% of the respondents identify changes to the project scope in the middle of it as the main reason of project failure. 6 PwC Belgium survey on programme and project management Maturity matters

9 Project performance 2 Delivering projects over budget and/or behind schedule has become the norm When looking further at project performance, we questioned survey respondents about the average performance of projects in their organisation in terms of (1) finishing within budget, (2) finishing ahead or on schedule, (3) delivering the initial scope, (4) meeting quality standards and (5) delivering business benefits. Although frequent complaints are heard about the budget constraints of projects, the time dimension seems an equally important area of attention. Indeed, although there is already a great deal of focus on these two elements, still we see that more than 57% of respondents state that more than half of their project portfolio is faced with delays and almost 50% of the respondents state that more than half of their projects exceed the foreseen budgets. Delivering the agreed upon scope, while meeting the quality standards and delivering the business benefits appeared a bit less problematic with the respondents, as shown in the three other graphs. Figure 6: Projects that finished on or ahead of schedule (in %) Figure 7: Projects that finished within budget (in %) Figure 8: Projects that delivered the agreed upon project scope (in %) Figure 9: Projects that meet the organisation s quality standards (in %) Figure 10: Projects that delivered the projected business benefits (in %) PwC Belgium survey on programme and project management Maturity matters 7

10 Part 2 Project management processes Cost management 3 Organisations should have a mature project cost and budget management process All projects cost money to the organisations running them. In order to prevent projects from spending more money than beneficial to the organisation, good practice requires that all projects have an approved project budget a limit to the cost of the project. 81% of participants responded that indeed a budget was always developed and appropriately approved before the start of a project. The remaining respondents neither agreed nor disagreed. However, when going further and inquiring if that budget also included a reasonable contingency amount, 42% did not (strongly) agree with that statement. Furthermore, 42% of survey respondents indicated that the underlying budget assumptions were not clearly documented beforehand, assessed and considered reasonable. Figure 11: Project budget includes a reasonable contingency amount (in %) Figure 12: Underlying budget assumptions have been clearly documented and assessed (in %) 40% of companies do not have mature project cost and budget management process. 8 PwC Belgium survey on programme and project management Maturity matters

11 Cost management 60% Only of project budgets include a contingency amount or clearly document underlying budget assumptions. Changes to the budget during projects are sometimes necessary for various reasons. 61% of survey respondents confirmed that an effective, formal process is in place in their organisation that identifies, documents, manages and approves any change made to the budget. Routine status reporting also included cost reporting in 64% of the surveyed organisations. Companies with a mature project cost and budget process (contingency amounts are built in, budget assamptions are documented and assessed, routine cost reporting and formal budget change process in place etc.) deliver significantly more projects within budget than companies with a less mature process. Figure 13: Companies delivering minimum 75% of their project within budget (in %) Companies with a mature cost and budget management process deliver significantly more projects within budget. PwC Belgium survey on programme and project management Maturity matters 9

12 Risk management 4 A well-established risk management process offers higher project performance scores When conducting projects, plenty of risks can manifest themselves during the course of projects. It is crucial for the success of projects that the risks and potential consequences are timely identified and mitigating actions are set up and ready to be deployed when the risk becomes an actual issue. When survey respondents were asked if the project teams and senior management in their organisation had a clear understanding of risk management and the risks impacting projects, 60% (strongly) agreed with the statement. Hence, results indicate a clear awareness of risk management. When investigating the project risk management practices in detail however, survey results show that only 31% agreed that all project stakeholders were adequately involved in the risk assessment process. Furthermore, only 29% of survey respondents indicated that they develop appropriate contingency plans for accepted risks. So it appears there is a clear understanding of risk management and risks impacting projects, however not all stakeholders are involved in developing that understanding nor are appropriate mitigation plans put in place. The importance of identifying risks is clearly understood, the implementation of all risk management practices is however not yet established everywhere. Figure 14: Maturity of company s risk management process (in %) 10 PwC Belgium survey on programme and project management Maturity matters

13 During project execution, a satisfactory monitoring approach should be established to identify new risks that arise and track the evolution of already identified project risks. A quite significant portion of the survey respondents, over 42%, indicated that this was not the case at their organisation. Frequently, risks are considered a given after the initial establishment and no further attention is given to them. Figure 15: Impact of risk management on project performance (in %) Companies that that do have a wellestablished risk management process achieve a higher project performance than those with a lower maturity level (see figure 15). PwC Belgium survey on programme and project management Maturity matters 11

14 Benefits management 5 Business imperative is the main driver for projects Although the economic climate is not optimal, and cost savings are words more frequently used nowadays than ever before, it is quite surprising to see respondents indicate that only 10% of their projects are conducted for cost reduction reasons. Most projects (45%) are conducted for business imperative reasons, to realise a major change or goal such as developing new products or significantly improving customer service. The second main reason why projects are run, according to 27% of survey respondents, is to generate extra/new revenues for the organisation. Figure 16: Main drivers for projects (in %) 6 Systematically delivering project benefits successfully requires an active benefits management process A project should be established to realise certain outcomes, also known as benefits. Good practice prescribe that these benefits should be clearly described, including related metrics, before project start, to allow appropriate project authorisation ( Is it worthwhile carrying out the project? ) and appropriate project evaluation ( Have the benefits been realised? ). 63% of survey respondents confirmed that this is applied within their company. In 16% of companies, the expected benefits are not systematically formalised at the start of the project. Refer to figure 17 for a complete breakdown. Figure 17: The business case clearly outlines expected project benefits (in %) 12 PwC Belgium survey on programme and project management Maturity matters

15 Benefits management Once the expected benefits are defined, an effective monitoring and tracking process should be in place to ensure that major project deliverables are completed and that the associated business benefits are realised in a timely manner. When the survey respondents were asked about the existence of such a monitoring and tracking process in their organisation, only 42% of them indicated that their organisation had effectively established such a process (see figure 18). Figure 18: An effective tracking process is in place to ensure major project deliverables are completed and associated benefits are realised (in %) Business cases outline the expected benefits of a project, but no effective tracking is in place to ensure realisation. Systematically succesful delivering project benefits requires an active benefits management process, where measurable benefits are defined and agreed upon prior to project commencement and actively monitored and managed throughout the course of the project. Figure 19: Percentage of companies delivering minimum 75% of their projects with the expected business benefits We noted that 52% of companies with a mature benefits management process deliver 75% of their project with the expected business benefits. This is signifanctly more than the companies without such a process. In the latter, only 18% of them deliver 75% of their project portfolio with the expected benefits (see figure 19). PwC Belgium survey on programme and project management Maturity matters 13

16 Part 3 People and organisation Project Management Office (PMO) 7 Project Management Offices are not yet widely spread A Project Management Office (PMO) interacts with all project stakeholders and supports project sponsors and project managers by providing assistance, guidance and subject matter expertise related to project management processes and functions to increase the likelihood of project success and the achievement of business benefits. Of the surveyed organisations, only 53% indicated that they have a dedicated Project Management Office. 73% of organisations that have established a PMO, only did so in the last five years. Another 19% have set up their PMO six to nine years ago and only 8% of organisations have been running a PMO for more than ten years. 53% of the surveyed organisations indicated they have a dedicated Project Management Office. 14 PwC Belgium survey on programme and project management Maturity matters

17 Project Management Office (PMO) The organisations that did establish a PMO seem to be more than happy. Over 73% of survey respondents indicated that their PMO improves the efficiency and quality of project delivery compared to only 8% that disagree (see figure 20). Figure 20: My organisation s PMO improves the efficiency and quality of project delivery (in %) Companies that do have a PMO report a positive impact on project delivery. PwC Belgium survey on programme and project management Maturity matters 15

18 Project management training 8 Project management courses are widely provided by companies Project management training allows employees to learn the techniques of project management and also to apply them in a correct way during day-today activities. Experience shows that many employees know the basics of project management, but a few fail to apply them appropriately when managing a project. When asked if their organisation provides opportunities for formal project management training, 73% of survey respondents confirmed this to be the case. This left 27% of survey respondents that were not provided with such an opportunity by their organisation, as shown in figure 21. Figure 21: Does your organisation provide opportunities to obtain formal project management training? (in %) 34% Figure Only of companies have a formal project management training curriculum. Delving deeper, of those participants that do receive formal project management training, a mere 34% indicate that they (strongly) agree that their organisation has a formal project management curriculum. This means that most organisations allow their employees to follow trainings, yet fail to guide them in their path. Refer to figure 22 for a complete breakdown of the responses. 22: Does your organisation has a project management curriculum? (in %) 16 PwC Belgium survey on programme and project management Maturity matters

19 Project management training 9 Project management training enables organisation s business performance Some organisations feel that providing opportunities for employees to obtain project management training does not contribute to their effectiveness and does not enhance their work. However, when survey respondents that indicated their organisation did provide opportunities for formal project management training where asked, only 9% felt that project management training did not contribute to enabling their organisation s business performance. For a complete breakdown of the responses, refer to figure 23. Figures 23: Does project management training significantly contribute to enabling my organisation s business performance? (in %) 70% Almost of respondents agreed that project management trainings significantly contribute to their organisation s business performance. PwC Belgium survey on programme and project management Maturity matters 17

20 Part 4 Project management methodologies Prince2 and PMBOK 10 Prince2 and PMBOK remain the dominant project management methodologies The survey reveals that almost 80% of surveyed companies use a project management methodology. 27% of organisations uses Prince2 compared to 20% who uses PMBOK. On top of this, 18% uses an in-house developed project management methodology based on a mix of common standards. It would be interesting to further investigate the correlation between project performance and the use of standard project management methodologies. It would seem logical that organisations using them would yield more high-performing projects. Figure 24: Use of industry-standard project management methodologies (in %) 24% of Belgian companies do not use a project management methodology. From the survey results though, we can see that both organisations with a high and low degree of well performing projects apply standard project management methodologies. The conclusion to be drawn here is that merely applying standard project management methodologies is not sufficient; they should be correctly applied by somebody with the required training, experience and skills in the methodologies. 18 PwC Belgium survey on programme and project management Maturity matters

21 Agile project management 11 Organisations are open to new methodologies, but agile project management is not yet widely used In the last couple of years, quite a number of new project management methodologies have been developed. Probably one of the most interesting and booming new project management methodologies in the field of IT software development is that of agile project management. 25% of the surveyed organisations indicated they have already used an agile project management approach. Figure 25: Is my management receptive to new project methodologies? (in %) Agile methods emphasize incremental delivery of working products, focused on maximising customer value. Through establishing a cycle for phased product delivery, agile project management assumes that changes and improvements will be incorporated throughout the product development life cycle. An agile methodology enables developers to respond to changing needs. And it includes business stakeholders, enabling them to have a say in the functionality they want delivered, provide actionable feedback, and change the requirements as the product is built. In an agile environment, the IT and business units work together as part of a cross-functional, collaborative team that maintains a business-focused ownership of projects. Software developers are fully attuned to the needs of the customer, whether that is an internal business unit, a supplier, or a business partner. And the customer participates as an integral member of the development project. Most organisations are quite open to discussing and considering using new methodologies, with only 16% of survey respondents indicating that their management was not at all receptive to new project methodologies (see figure 25). Only 25% of our survey participants indicated that their organisation is using agile project management on at least one project. From the survey respondents that indicated that their organisation uses an agile project management methodology (see figure 26), over 58% indicated that they only use such a methodology in less than 25% of their projects. Only 34% of respondents indicated that the agile project management methodology is frequently used and embedded in wider project management methodology. Figure 26: What percentage of your projects use agile project management? (in %) PwC Belgium survey on programme and project management Maturity matters 19

22 Agile project management 12 Agile project management has a positive impact on project efficiency and on the realisation of business goals As stated before, in an agile environment, the IT and business units work together as part of a crossfunctional, collaborative team. This close alignment of IT developers and business stakeholders helps ensure the software is delivered timely and that the end product meets user requirements and expectations. Consequently, many organisations are finding that agile software development contributes significant value to the business. The cross-functional nature of the agile method creates a spirit of cooperation between IT and business. Agile development further solidifies this sense of shared purpose by empowering the team with decisionmaking authority. In agile projects, workers most knowledgeable about the project make decisions, not managers who may be several layers removed from the day-to-day work. Figure 27: What role does the project manager play on your agile projects? (in %) 75% In of the projects, the project manager continues managing every detail of the project directly. 20 PwC Belgium survey on programme and project management Maturity matters

23 Agile project management Organisations seeking to adopt an agile approach are sometimes concerned about some of the messages and myths of agile project management, and it can be very difficult to separate rumour from fact. For example, some agile approaches suggest that project management is irrelevant or unnecessary a very worrying message for organisations that rely on their project managers, and organisations that may have invested heavily in creating a pool of experienced and accredited project managers. This has led some to an incorrect perception that agile project management is only applicable to small, simple pieces of work, and that organisations need to choose either agile or formal project management or corporate processes. On the contrary, one of the advantages of agile project management methodologies, is that organisations can adopt them as an approach that complements and works with existing corporate processes, such as PRINCE2 and many others. When asked whether agile project management contributes to the efficiency of projects, more than 92% of survey respondent indicated that this was always or usually the case. This clearly indicates a positive attitude towards the agile methodology from stakeholders of projects that use an agile approach (see figure 28). When finally asked whether they felt that agile project management significantly contributes to enabling their organisation s business performance goals, 67% responded that they (strongly) agreed with the statement. The remaining 33% were neutral about the statement. Again it should be noted that none of the survey respondents indicated that they strongly disagreed, showing a clear positive attitude about the contribution of agile project management to achieving business performance goals. Figure 29 offers a complete breakdown of respondents responses. Figure 28: Of those projects that use agile project management, does agile project management contribute to the efficiency? (in %) Figure 29: Does agile project management significantly contribute to enabling my organisation s business performance goals? (in %) PwC Belgium survey on programme and project management Maturity matters 21

24 Earned Value Management (EVM) 13 Earned Value Management has yet to gain popularity Earned Value Management (EVM) is a technique used in project management to monitor and control the planning, costs and performance of projects. EVM allows for the integration of scope, resources and schedule as a project progressmeasuring tool. Some background This technique took root in the United States Department of Defense in the 1960s when it set guidelines for its contractors to collect, analyse and present financial and progress data. In the late 1980s, EVM emerged as project management methodology and the benefits of applying this methodology to tracking and controlling project performance was recognised by the Project Management Institute (PMI) and included in their Project Management Book of Knowledge (PMBOK). EVM is now recognised worldwide as an accurate and useful monitoring and controlling technique. 22 PwC Belgium survey on programme and project management Maturity matters

25 Earned Value Management (EVM) Of our survey respondents, 63% indicated that their organisation never uses EVM during project management activities. Another 8% uses it only rarely and 17% sometimes, as indicated in figure 30. When asked for the reasons why EVM is not used, the top answer was that the current project control system worked, so they did not feel the need to use EVM. However, also among the top reasons we could find: lack of EVM expertise and experience; lack of computer infrastructure and software systems; high cost and time commitment. Figure 30: Organisations using Earned Value Management (in %) Earned Value Management is a strong tool, yet still suffers of a lack of expertise and experience. This is a clear indication of a lack of knowledge about EVM. EVM can be applied by using simple spread sheets; no high-tech computer systems or expensive software is needed. Furthermore, when an efficient and effective process is established for gathering the required data at regular time periods, there is no high cost and time commitment required to perform EVM, it become even quite easy to quickly generate useful results. Figure 31: Earned Value Management as a useful tool for project monitoring & controlling (in %) For those companies that do apply EVM, the majority finds EVM a useful tool to predict the success of a project and that EVM plays an important role in the success of the project. PwC Belgium survey on programme and project management Maturity matters 23

26 Let s talk If you have any questions about this Belgian programme and project management survey or would like to discuss any of these topics further, please reach out to us. Floris Ampe Partner Tel: floris.ampe@be.pwc.com Pierre Wangen Director Tel: pierre.wangen@be.pwc.com Olivier Jacqmotte Senior manager Tel: olivier.jacqmotte@be.pwc.com Marc Vergote Senior manager Tel: marc.vergote@be.pwc.com 24 PwC Belgium survey on programme and project management Maturity matters

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