PROJECT MANAGEMENT SURVEY

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1 INDUSTRY TRENDS PROJECT MANAGEMENT SURVEY JANUARY 2015

2 Introduction 2015 will continue to see organisations across all sectors facing one of the most competitive, challenging and changing corporate environments ever seen. Businesses must continually adapt to a changing political and economic landscape as well as complying with an ever increasing regulatory environment at a time when most economies are in recovery mode. Set against this landscape, it is almost universally recognised by top management that Project & Programme Management ( PPM ) is critical to the future success of their businesses. PPM is central to their ability to grow, contain or reduce costs and adapt to an ever more complex corporate environment. In fact, we would suggest it is almost impossible to find an organisation today that does not deploy some level of Project & Programme Management expertise. It is against this backdrop that we launched this survey. The survey s main objective was to investigate the current state of Project & Programme Management across the industry and to identify current trends in relation to the effectiveness in achieving a return on investment from projects and programmes. We have analysed specifically how companies perform in the four stages of the investment lifecycle: BACKING THE RIGHT IDEAS SETTING UP FOR SUCCESS EXECUTING WITH EXCELLENCE REAPING THE REWARDS The target respondents for this survey were Board level Executives and Senior Management within multi-national companies, with detailed input from those involved directly in project and programme delivery. The survey was undertaken in the months of October, November and December 2014 and we received over 1,000 responses. The data was gathered via a web-based quantitative survey, which consisted of closed questions and was supported by a number of face-to-face interviews. The survey gives us an insight into the collective opinions of these groups of key people on a wide range of topics relating to Project and Programme Management performance. Comparisons are also made with an almost identical survey the authors undertook in Acknowledgements P2 Consulting would like to give its thanks to all of the companies and individuals that took time to complete the survey. We hope you find value in the results. 2

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4 TOP 10 FINDINGS Project Management is absolutely vital to business success; 99% of the Executives and Senior Managers involved in this survey confirm this. Project delivery performance has improved over the last 10 years, although only by a small margin and insufficient to make a material impact on the bottom line. Most organisations still do not have the required Project Management maturity level and rely heavily on external, temporary or consultant Project Management staff - this appers to be a generally accepted way to manage the peaks and troughs associated with project delivery. More importantly, while there is strong sponsorship for individual projects, most organisations lack the required governance and control at Senior Executive level to effectively manage a portfolio of projects. Many organisations are attempting to deliver too much change at any one time this is a key factor inhibiting value creation. Of major concern, more than half of all projects resulted in little or no tangible business benefit. Executives recognise the need to flex their project portfolio in response to the changing external environment, although few are able to do this at the required speed. Project failures are often a consequence of issues that are organisational and over which Project Managers have little influence. If a project ceases to become viable during its life, few organisations have the mechanism or required Governance to stop investing further, with timely, insight-driven MI sorely lacking to support such decision making. Programme Management Offices (PMOs) are now common place in organisations and are recognised as a key component to managing the multi-project environment; yet many are regarded as not fit for purpose. Project Management Certification has not gained pace in the last 10 years and there is no correlation between those organisations that report high levels of certification and those organisations that achieve positive project results. 4

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6 Backing the Right Ideas The majority of companies are effective at project selection and there is good alignment between their project portfolio and to the organisations strategic goals. The big challenge for organisations is how to manage the scale and complexity of the multi-project environment. Results 99% of companies state that project management is vital to the success of their business and will support their future business plans. 81% of companies report that there is strong alignment between the project portfolio and their respective business strategy. 79% of companies state that individual projects are strongly supported by their Executive team. 68% of companies have a structured approach for justifying and approving new projects. 55% of respondents believe that they always seem to have too many projects running at the same time and have difficulty prioritising. 41% of companies do not have adequate governance and control over their project portfolios. 34% of companies have engaged external support to help strengthen their governance and management techniques around portfolio selection and future management. Our Analysis Firstly, there is almost universal agreement that Project & Programme Management is a critical capability for organisations to survive and thrive in today s corporate climate. The majority of companies are actually very good at backing the right ideas that align with and, on the face of it, drive them towards their strategic goals. Indeed, individual projects seem to be well supported at Senior Executive level, with strong sponsorship. The big challenge for organisations is how to manage the complexity of a multi-project environment. Strong Portfolio Governance is generally lacking. Many organisations believe they are trying to do too much, with projects often competing for finite, limited resources and a reluctance or inability to stop projects that are no longer viable or profitable. This apparent lack of governance and oversight across the overall project portfolio appears to be the key factor inhibiting organisations from realising a return on investment from their projects. 6

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8 Setting Up for Success Given the importance that companies place on PPM as a necessary component to their corporate armoury, there is still much work to be done to drive up the required PPM skills and capability. Nearly half of all respondents believe they don t have the necessary expertise and experience. Results 94% of businesses agreed that Project & Programme Management is perceived to deliver significant results to their business. Yet only 56% of companies believe that they have the requisite level of developed Project & Programme Management skills. Our Analysis There is a clear disconnect between the perceived value that Project Management delivers for organisations and the strength of their PPM capability In the last decade Project and Programme Management skills have improved slightly up circa 3%. 61% of companies report to have clarity of key responsibilities and accountabilities (Sponsor, PM, Project team, etc.). 59% of companies reported that their business does have a consistent and robust framework for planning projects and programmes. 33% of companies report that the Controls Framework and associated PM processes and tools are not used effectively. Given the importance that companies place on PPM as a necessary component to their corporate armoury, there is still much work to be done to drive up the required skills and capability. No doubt this capability shortfall is also a consequence of the fact that the majority of organisations are running too many projects concurrently (see previous page). There is undoubtedly a capacity issue here also. 68% of companies provide Project Management training and development, although this tends to be targeted at the PM community rather than PMO. 8

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10 Executing with Excellence Project Management delivery capability against time, budget and benefits capacity has improved marginally over the past decade but not enough. Project failure rates are still unacceptably high and organisations are not doing enough to drive up their in-house capability. Results 39% of companies fail to deliver projects on time. 36% of companies fail to deliver projects against their allocated budget. Only 40% of companies report to have a proactive PMO that helps to drive and challenge projects. Only 53% of respondents believe that Project Reporting is regular, accurate and comprehensive, with little in the way of early warning MI. 71% of Stakeholders state they do not receive an adequate level of management information about their projects. 74% of companies confirm that they rely on external support to provide experienced Project & Programme Management skills. Our Analysis In general, Project Management capability has improved marginally over the past decade but not enough. Project failure rates are still high. There is near universal acceptance of the importance of the role of the Programme Management Office (PMO) in supporting the management and delivery of the Project Portfolio. PMO capability (and output) is generally inadequate and this is a major inhibitor to delivering value from the Project Portfolio. There has been a strong increase in the reliance on external, temporary or consultant Project Management staff over the last decade. The nature of project-based work will mean a level of external, flexible resourcing is always expected and required. However, given the importance organisations place on Project Management, this overreliance on consultants/contractors is a major failing. 10

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12 Reaping the Rewards Organisations are attempting to deliver too much change at any one time this is a key factor inhibiting value creation. Of major concern, nearly half of all projects delivered resulted in little or no tangible business benefit. Results 44% of companies confirm that their projects do not deliver the expected benefits as set-out in the project business case. 41% of companies confirm that effective sponsorship of change and ownership of outcomes is missing from their business. If a project ceases to become viable, only 47% of companies take the necessary action to stop the project. 39% of companies state there is no mechanism in place to drive continuous improvement across projects & programmes. In the subsequent interviews it became apparent that companies focus more on project delivery and creating the benefits capacity, rather than retaining their focus through to actual benefits realisation and seeing the benefits materialise in the company s P&L. Our Analysis There has been a marginal improvement in project delivery performance against benefits case (44% compared with 42% 10 years ago). This is still shockingly poor! One of the key contributing factors to this is that many organisations (as stated above) are attempting to deliver too many projects at any one time. Our study also points to poor portfolio governance and control and a lack of PMO skills contributing to the loss of value from nearly half of all projects delivered. In addition, there is inadequate planning, preparation and leadership by the business to leverage the benefits capacity that has been created when projects deliver. This lack of accountability for outcomes is a significant factor in destroying value for organisations. 12

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14 10-Year Trends (comparison to 2005) Companies are increasingly leveraging project management as a method to achieve their business objectives. Whilst things are generally improving at a project level, companies seem to be struggling with the effective management and control of a company-wide portfolio of projects and in driving out the potential benefits. Key Finding Project Management is regarded as important to the success of business Strong alignment between the projects portfolio and the business strategy 95% 99% 71% 81% Project Delivery performance against Time 69% 61% Project Delivery performance against allocated Budget 69% 64% Project Delivery performance against Benefits Case 42% 44% Too many projects ongoing at any one time and little prioritisation People in our business have well developed project management skills 60% 55% 51% 56% Percentage of formally Certified Project Managers 32% 43% PMOs that take a proactive role in driving project success 34% 40% We rely on external support to bring project & programme management skills/capability 68% 74% 14

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16 Conclusion It is no surprise that organisations remain completely reliant on Project and Programme Management to enable them to achieve their business objectives. Indeed, such capability is absolutely vital to the success of any business. Recognising the role that Project Management plays in the execution of business strategies, company executives continue to successfully champion and sponsor individual projects and programmes, particularly those within their direct control. However, it is clear that businesses are struggling to govern, prioritise and control their end-to-end project portfolios. In general, businesses are simply trying to run too many projects and more often than not in an uncoordinated manner. This is further compounded by the distinct lack of PMO capability in most organisations. Coupled with this, the planning, preparation and management within organisations to leverage the outcomes from projects is woeful 44% of projects do not deliver the planned benefits. A drive/focus on business readiness and benefits delivery is crucial if this trend is to be reversed. There is a growing importance for businesses to build a strong portfolio management capability that not only supports the initial prioritisation of investments, but can optimise and drive value for the business. Organisations with lean, focused project portfolios that have the means to cut projects rapidly (where they are no longer perceived to add value) will thrive in today s competitive landscape. Robust governance, control and coordination across the multi-project environment is critical and the PMO must take a front and centre role in driving this transforming from a project administration centre to a centre for excellence in Portfolio Management and ultimately value creation. 16

17 Participants Profile This survey was conducted in quarter with the participation of 1,081 respondents from over 300 companies. The majority of participants were senior management, programme and project managers. The data was gathered by a webbased survey supported by a number of face-to-face interviews. The survey analysis and results provide us with an insight into the collective opinions of these groups of key people on a wide range of topics relating to Project and Programme Management performance. Participants Designation CEO CFO CIO Director Department Head Line Manager PMO Head Programme Manager Project Manager Industry Sector Total Project Spend per Annum Other Public Sector Manufacturing Travel / Leisure Telco Energy Retail / FMCG Financial Services 0-5m 6-25m 26-50m m 101m+

18 About P2 Consulting P2 Consulting is the market leading Project and Programme Management Company. We work with you and your team to turn your business vision, objective, goal or strategy into reality. The company was formed by a revolutionary team of entrepreneurial leaders and award winning consultants looking to transform the way the world thinks about consulting. For more information about P2 Consulting visit

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