Oracle, the owners of Primavera have sponsored a survey by the Economist Intelligence Unit of The Economist, looking at the link between project management excellence and long-term success. The report was based on a survey of 213 senior executives and project managers worldwide and in-depth interviews with nine executives and project management experts.

I have not had the chance to read the full report yet but one item in the executive summary really caught my attention. The editors state “An impressive 90% of respondents say project management is either critical (47%) or somewhat important (43%) to their ability to deliver successful projects and remain competitive.”

This statement raises two interpretational questions:

1. What do the other 10% do? How is it possible to undertake projects and not do project management. I would have thought is was impossible to do a project without doing project management and consequently project management was critical to doing projects. More than 50% of the people interviewed disagree. And interestingly more then 50% of project fail maybe there’s a correlation?
2. Probably a more significant question is what do the respondents to the survey mean by project management? Despite the well established standards defining project management ranging from the PMBOK® Guide to PRINCE2, do over 50% of the people responsible for project still fail to grasp the essentials??

The same survey found nearly one-half (49%) of the respondents only follow formal project management practices on large or complex projects and few (20%) use a standardised set of project management tools including enterprise-level systems. Which is consistent with Gartner’s findings that smaller project fail more frequently then lager projects.

It looks as though PMI, IPMA and academia have a lot of work to do to make project management effective in business. It would appear that whilst executives recognise the value of delivering projects on time, on budget and to the customer’s expectations very few are prepared to invest the resources needed to achieve effective project management.

This reminds me of another quote by Lister DeMarco from a few years ago: “Quality is free, but only to those that are willing to pay heavily for it!” There should be a PM equivalent somewhere…..

Project Management 2.0 (PM 2.0) seems to be going the same way some Agile anarchists are trying to take software development which is essentially not to do project management and hope a group of people with good will and good luck will create something useful.

Not doing ‘project management’ is a really good idea if you and your client have no idea what’s needed, when its required, or how much budget is available. Journeys of exploration can be fun and can be highly creative but are nothing to do with managing projects.

Wikipedia (retrieved 27/9/2009 from: http://en.wikipedia.org/wiki/Project_management_2.0) lists the following differences between PM 2.0 and ‘traditional’ project management.

PM 2.0 -v- Traditional PM

Whoever wrote this has absolutely no idea what good traditional project management looks like and has probably never worked on a successful major project. Good traditional project management differs from this highly subjective and biased list in many ways:

• Control is not centralised, authority and responsibility are devolved to the appropriate management levels.
• All good project management is based on collaboration.
• All good project management requires open access to the plan both as an input to its creation and to know what needs doing during delivery.
• Access to information is vial when and where needed.
• Open and effective communication is critical.
• Project are,  by definition, separate management entities – a holistic approach (ie, not doing projects) is called general management.
• Tools, see: A fool with a tool is still a fool, and you need the right tools for the right job. Amateurs try to do jobs with inappropriate tools. Easy to use and flexible are fine if you know exactly what you are doing, it is a recipe for wrong information and wrong decisions if you don’t.

The table is correct in so much as project management involves a degree of top down planning. Project management is about delivering a required output to the specifications requested by the client. The product or service is a failure if it does not meet the quality requirements set by the customer; which may include time, cost and scope parameters.

It is also correct in respect of the implied structure – projects work because there is an implied structure that sets a framework for collaboration. If you don’t know who is doing what it is nearly impossible to collaborate. Even Wikipedia and Linux have structure in their collaborative frameworks.

I have emphasised good project management throughout this post. Bad project management involves excessive attempts to ‘control the future’, lack of stakeholder involvement, excessive bureaucracy, and many other problems. These traits are bad management full stop.

One comment on the Wikipedia article is important though: PM 2.0 is good for small jobs. This is consistent with a survey of construction projects in the UK undertaken by the Chartered Institute of Building, focused on time management, which found that on ‘simple projects’ there was no difference in performance between those projects with a properly developed and managed schedule and those without. The same proportions finished early, on time and late.

However, as soon as the projects became ‘complex’; there was a marked difference in performance. Projects with effective schedule control performed significantly better than those without, and the bigger/more complex the project, the more significant the difference. ( I will put up a post on the CIOB’s work and its new practice standard for scheduling in a few days).

The CIOB’s findings and a closer look at many of the blogs and comments on both PM 2.0 and Agile seem to fit this trend. I would suggest two conclusions could be drawn:

1. If the work is small, simple and easy to understand there is no need for much in the way of traditional project controls. Knowledgeable people know what needs to be done and can just get on with the work.
2. If the required output is not capable of being determined by the client and the objective is to ‘create something wonderful’ it is very difficult to apply too many project management techniques – basically you don’t know what needs to be planned, costed and scheduled, etc. Time and cost are secondary to creativity and the exploration of problems.

In both of these circumstances traditional project management may not be appropriate. In fact I would question if either circumstance is actually a project given the definition of a project is to produce a defined product, service or result that meets the needs of a customer.

The challenge for senior organisational management is recognising the threshold where PM 2.0 and ‘free form Agile’ cease to be appropriate and more traditional forms of project management are needed. Traditional project management does not mean ridged control, the type of project influences what’s needed (see: Projects aren’t projects – Typology) but appropriate systems do help optimize cost, time and quality to deliver client satisfaction.

This does not mean dumping the new ideas, rather melding them into an improved project management process. Agile software development fits in nicely to ‘rolling wave’ planning. Similarly some aspects of PM 2.0 can really help enhance team communication and collaboration. Used wisely, these ideas and technologies simply help improve the way projects work to deliver quality outputs to their clients. This change is really no different to the shift from faxes and carbon copy paper to emails. Good project management has always adapted to use improvements in processes and technology to improve the quality of service provided to the project’s clients. This next wave of improved technologies should be no different.

However, be wary of the zealots suggesting the ‘old ways’ don’t work and should be abandoned and use examples of really bad project management to prove their point. This is even more important if the zealots also advocate employing them to solve all of your problems for a fee. Management fads come and go – modern project management has been generally successful in achieving positive outcomes for well over 50 years now and continues to evolve and improve. For further comment see Glen’s post on: Herding Cats

I enjoyed this Popular Mechanics piece on the problematic foundations that underpin forensic science — CSI Myths: The Shaky Science Behind Forensics.   Per the piece’s header:

Forensic science was not developed by scientists. It was mostly created by cops, who were guided by little more than common sense.

In fact, I was reminded of the debate that we’ve had about project management as a profession (here, survey here, survey results here).  The article reinforced just how far we have to go to true professionalization.

While we have many common sense PM practices, how many of them are demonstrably linked to project success?  Which are the most important and why?  The Value of PM is still pretty fuzzy…

I have been dipping into a fascinating new book, The Lazy Project Manager kindly provided by its author, Peter Taylor.

This is not a book about managing projects…. it’s a book about managing yourself whilst you manage projects. The Lazy Project Manager is not intended to replace project management training manuals, courses, standards and other earnest but boring tomes. It’s the book you read when you are skilled at successfully running projects or programs and need to get a life outside of work as well.

Building on the ideas of Walter Chrysler and others ‘Whenever there is a hard job to be done I assign it to a lazy man he is sure to find an easy way of doing it.’; productive laziness is about achieving the success that matters with the minimum necessary effort. More bang for your buck!

Using a combination of humour from The Jungle Book (movie), Monty Python (and brontosauruses) and others, plus science from more reputable sources this is a fascinating read full of practical ideas.

To preview and buy visit: http://www.thelazyprojectmanager.com and you too may become productively lazy. Now all I need to do is find the time to finish reading it……

This blog is going to try and link project and program management with change management and benefits realization.

As a start, the only point of undertaking a project or program is to realize some form of value. Benefit realization! To realize value, three elements need to be brought together:

1. There needs to be a new product or process created (an artifact);
2. People within the organization need to make effective use of the artifact to deliver a service;
3. The service as delivered needs to be accepted and used in the ‘market’.

The role of Strategic management and Portfolio management is to determine what services are likely to be accepted or needed by the market; a new shopping centre, an improved insurance package or simply a more efficient process to deliver information. These decisions will depend on the objectives of the organization, and is not the province of this blog.

The generally accepted role of project management is to create a unique product, service or result (an output) and the role of program management is to manage a group of related projects to achieve an outcome more efficiently than if the projects had been managed in isolation. Neither of these processes achieves real value in themselves. The realization of sustained value is achieved by the organization using the program’s outcome effectively over many months or years.

The Scope of Change Management

Projects and, to a greater extent, programs can realize some benefits, partially in the design and delivery of their respective outputs. Early benefits realization is frequently linked to ‘soft’ elements in the range of deliverables such as developing effective training, managing the transition to operations and ensuring a proper support framework is developed. Achieving these elements require the project/program team to really understand the requirements of their stakeholders. However, as demonstrated by the cost/benefit graph, benefits realization should continue for years after the program is finished and closed.

The extended timeline for value realization has important ramifications for organizational change management. Each project is an intense burst of change and the program absorbs these changes and has additional change effects of its own. These ‘activity related changes’ will include beneficial and negative impacts on a range of associated stakeholders. Some changes are disruptive caused by the execution of the work, learning curves, etc. Some changes positive caused by the improvements the projects and programs were initiated to deliver. Achieving a successful project/program outcome requires the effective management of these stakeholder communities, but the stakeolder management activity is essentially tactical.

The critical requirement to deliver sustained value is the organizational culture change needed to actively embrace the program’s outcomes and make valuable use of them. Embedding a culture change into an organization is a 2 to 3 year process as the change migrates from ‘new and threatening’, to ‘accepted (but the old way are still fondly remembered)’ to the ‘established old way’ things are done around here. This type of long term organizational change can only be accomplished by the organization’s line management supported by senior management. This is the realm of the program sponsor and executive management!

These ideas also have important ramifications for effective stakeholder management:

• Project level stakeholder management is relatively short term and focused on minimizing opposition to the work whilst ensuring necessary organizational support is in place to deliver the project’s outputs effectively. This is essentially tactical in nature.
• Program level stakeholder management has a wider view that needs to engage with the organizations strategic vision to ensure the program’s outcome is optimized to the changing circumstances within and around the organization. The key issue here is identifying and responding to changing stakeholder requirements, needs and expectations/perceptions over time; so as to optimize the value of the ‘outcome’ the project was established to deliver.
• Organizational level stakeholder management needs an even broader and longer term view focused on the strategic needs of the organization and its long term relationship with both internal and external stakeholders. Sustained value creation requires both the organizations internal staff and its external customers to jointly perceive the programs ‘output’ as valuable to them and also to perceive the organization favorably so they together maximize its use:
  • For a new shopping center with a 20 year lifespan this translates to retail tenants being willing to rent space and the ‘public’ seeing the shopping center as a ‘good place to shop’.
  • For a new call centre management system this translates into the call centre staff seeing the system as efficient and easy to use and clients of the business perceiving the system and staff as friendly, efficient and effective so they are happy to make repeated use of the system.

Conclusions

Change management and stakeholder management are closely aligned. Effective stakeholder management is essential for successful change management.

Change management and stakeholder management must start as soon as the project or program are initiated but should continue well after the project/program are completed.

The on-going organizational component of change management supported by strategic stakeholder management is critical if the real value of the outputs/outcomes created by the projects and program are to be realized.

Benefits realization is a line management responsibility starting with the project sponsor. All project and program managers can do is ensure their deliverables are crafted to facilitate and encourage benefits realization.

The project management profession would appear to be in a confused state!

PMI’s 2008 Pulse of the Profession survey shows improved performance from 2006 with over 55% of project completing on time and over 58% on budget.  The survey also found a strong correlation between the project management maturity of the organisation and improved project outcomes.

Meanwhile, the new Standish Group report (April 23, 2009) shows a marked decrease in project success rates,

• 32%   Successful (On Time, On Budget, Fully Functional) – worst in 5 years
• 44%   Challenged (Late, Over Budget, And/Or Less than Promised Functionality)
• 24%   Failed (Canceled or never used) – worst in 10 years

These numbers represent a downturn in the success rates from previous studies, as well as a significant increase in the number of failures.

Around the same time as PMI, Human Systems International Ltd and the Association for Project Management (APM – UK) conducted a survey. The results of this survey reported in the May 2009 edition of Project Manager Today which showed that whilst value realisation is a long way from satisfactory it is not as bad as Standish would suggest. The survey showed 48% of organisations do not measure benefits realisation and of the remaining around half achieve more than 80% of the expected benefit and 22% less than 60%.

It’s hard to know what to make of the conflicting data – superficially, it would appear that organisations that employ professional project management staff (APM and PMI members) do better then organisations overall. But even then, the results are not that good. 

An alternative view may be the definition of a project with the APM & PMI membership being more focused than the Standish survey. For more on this see: What is a project?

The last alternative is IT projects (surveyed by Standish) are worse on average than projects in general.

Confused????  I certainly am. The real key seems to lie in the area of project management maturity. Maybe OPM3’s time has come at last?? (PMI’s Organizational Project Management Maturity Model).

The Project Management Manifesto is a call for the US government to properly oversee and manage projects that will be financed with taxpayer money. The originators of the Manifesto recognise that lawmakers and government officials in the USA have good intentions and are working hard to address the recession. But it is the project management profession that understands how to plan, manage and govern programs and projects. There are best practices available that should be used and promoted. It is very important that the stimulus funds are used as effectively as possible, and not wasted.

According to the PM Manifesto website: “We are a community of project management leaders who are experienced in delivering results. As seasoned professionals, we know that there are three key elements to achieving the successful completion of projects that all Americans want and our country desperately needs. We urge that these elements be part of all projects launched through The American Recovery and Reinvestment Act.”

I believe this initiative should be extended to Australia and every other nation who’s government is planning to spend our children’s taxes to minimise the impact of the world-wide recession. The challenge is for project management leaders world wide to latch onto this initiative, couple it to effective practices and standards such as PRINCE2, PMBOK® Guide, OPM3, P3M3 and others and make a difference.

Project managers, project management professionals, company executives and government leaders are encouraged to visit the PM Manifesto website at http://pmmanifesto.ning.com to read the declaration and proposed policy measures, and then decide how to best make use of them ‘at home’.

For more on the launch see the PM Forum web site at seen at http://www.pmforum.org/blogs/news/2009/01/ProjectManagementManifestoPublishedinUS.html.

PMI launched four updates to its range of standards on the 31st December 2008. The four standards are aligned and consistent which will help ensure all levels of the profession are using the same terms, have the same understanding and can promote harmonisation across all levels of an organisation. Earlier blogs have discussed the changes in the PMBOK® Guide and their impact on the credential examinations for PMP, CAPM, PgMP and PMI-SP. This blog focuses on the changes to OPM3 and The Standards for Program and Portfolio Management and their potential benefits for organisations.

The second edition of PMI’s Standard for Portfolio Management describes good practices in the discipline of portfolio management focused on ‘doing the right work’. It does not matter how good an organisation is at delivering projects and programs if the outputs are of no real benefit to the organisation. On-time, on-budget and not used is just a wast of money and resources.

The new standard builds on the processes for managing a portfolio of projects and programs defined in the first edition to include Portfolio Governance to include the responsibility of senior management to be accountable for investment decisions throughout the portfolio lifecycle; and Portfolio Risk Management. The key element in portfolio risk management is not avoiding risk, but balancing the types of risk accepted to deliver the maximum potential return from the organisation’s overall investment in its portfolio of projects and programs. Portfolio Governance makes sure the investmant is managed effectively.

We have been advocating the need for PMI’s standards to include Governance since 2005, Patrick Weaver presented a series of papers at PMI Congresses that appear to have had some influence on the new Standard. For copies of the papers see: http://www.mosaicprojects.com.au/Resources_Papers.html#Governance

The most significant difference between the First edition and the Second Editions of the Standard for Program Management is in the development of program-specific knowledge areas. These included knowledge areas that are critical to successful program management as well as knowledge areas that are significantly different at a program level than at a project level.

A second significant difference between the two editions was in the removal of “themes” that were introduced in the first edition.

• The theme of Program Stakeholder Management was expanded into a knowledge area.
• The theme of Program Governance was significantly expanded and also became a knowledge area.
• The theme of Benefits Management was incorporated into the body of the document. 

The challenge now facing organisations is to make effective use of the resources represented by these new PMI Standards; this is where OPM3 comes into play.

OPM3® – Second Edition

OPM3 is a model for measuring project management maturity against a comprehensive set of best practices based on the PMBOK® Guide (projects), Program and Portfolio Management Standards. The updated OPM3 Standard, its self assessment module and the more capable OPM3 ProductSuite are fully aligned with the new PMI standards and have incorporated the concept of Organizational Enablers, previously only found in ProductSuite. Organizational Enablers are the attitudinal and structural elements of an organisation that enable the efficient management of projects and programs.

The updated OPM3 tools and reports allow assessment results to be categorised by Knowledge Area, by Business Results, and by Balanced Scorecard to ensure any planned improvements are focused on the areas of a business that provide the greatest return on investment. In short, OPM3 is the tool that allows organisations to create a better value proposition from their investment in projects and programs.

For more on OPM3 see: http://www.mosaicprojects.com.au/OPM3.html (this page will be progressively updated as we develop a better understanding of the new OPM3 tools – Mosaic is one of the very few organisations in the Asia Pacific region with consultants qualifed to deliver OPM3 ProductSuite assessments ).

Das Project Management Institute® hat Janice Thomas, Ph.D., und Mark Mullaly, PMP damit beauftragt, den Nutzen von Projektmanagement wissenschaftlich untersuchen zu lassen. Die Beantwortung der Frage, ob Investitionen in das Projektmanagement einen entsprechenden ROI bringen, ist für das PMI® natürlich von Bedeutung. Denn sollte heraus kommen, dass sich Investitionen in ein professionelles Projektmanagement nicht rentieren, wäre ja auch eine solche Organisation obsolet.

Eigentlich sagt einem schon der gesunde Menschenverstand, dass ein entsprechend systematisches Projektmanagement bei komplexen, neuartigen Vorhaben von Vorteil ist. Egal, was bei derartigen, recht groß angelegten Untersuchungen raus kommt.

Trotzdem geben derartige Studien auch immer Grund zu (häufig berechtigter) Kritik. Beispielsweise kann man sich fragen, ob ein solches Forscherteam überhaupt zu einem objektiven und aussagekräftigen Ergebnis kommen kann, wenn der Auftraggeber der Studie auch gleichzeitig ein großes Interesse an einem ganz bestimmten Ergebnis hat. In diesem Fall, dass heraus kommt, dass Projektmanagement doch soooo viel Nutzen für ein Unternehmen bring.

Cornelius Fichtner, PMP, der ThePMPodcast.com betreibt, hat kürzlich mit einem der Studienersteller, nämlich Mark Mullay, ein Interview geführt. Unter anderem sind sie dabei auch genau auf die kritischen Punkte der Studie eingegangen. Ich finde, dass Mark dazu sehr überzeugend und authentisch Stellung bezogen hat. Dies hat mein persönliches Vertrauen in diese Untersuchung wesentlich erhöht.

Zurück zur Studie. Ich muss zugeben, dass ich mir die 365 Seiten (ohne Anhang) noch nicht gänzlich “rein gezogen” habe. (Die Studie kann übrigens von PMI Mitgliedern kostenlos unter www.pmi.org herunter geladen werden.) Auf den ersten Blick sieht die Studie aber sehr professionell, fundiert und gut gemacht aus. Die Autoren haben sich auch wirklich Mühe gegeben, ein solides Forschungsdesign zu entwickeln, welches ein hohes Maß an Objektivität und Aussagekraft der Ergebnisse zum Ziel hat.

Was mir besonders gut gefällt (angelehnt an die einzelnen Kapitel der Studie):

• Die gesamte Studie basiert auf einer umfangreichen Recherche relevanter Literatur. Daraus leiten die Autoren ein so genanntes “Conceptual Model” ab (Sensibilisierendes Modell). Das Modell ist insofern sehr überzeugend, da es einerseits auf die spezifischen Faktoren der PM Implementierung eingeht, andererseits aber auch besonders auf den organisatorischen Kontext, in dem Projektmanagement implementiert und eingesetzt wird. Es wird also nicht angenommen, dass es EIN Projektmanagement gibt und EINEN organisatorischen Rahmen. Vielmehr plädieren die Autoren für eine differenzierte Betrachtungsweise, was meines Erachtens unablässig ist. Denn andere Studien haben genau hier ihre größten Schwächen.
• Weiters wird das Forschungsdesign “Methodology and Methods” sehr transparent offen gelegt und auch begründet.
• Zudem kommen nicht nur quantitative sondern auch qualitative Methoden zum Einsatz. Auch dies ist meines Erachtens im vorliegenden Thema notwendig, um zu aussagekräftigen Daten und Ergebnissen zu kommen.
• Weiters wird der “Value of Project Management” in “tangible” (messbare) und “intangible” (immaterielle) Faktoren unterteilt:
  • Level 1: Satisfaction (Zufriedenheit)
  • Level 2: Alignment (Kontinuität und Systematik, man könnte den Punkt inhaltlich sogar mit “PM Kultur” übersetzen)
  • Level 3: Process Outcomes (Effizienz und Effektivität von Projekten)
  • Level 4: Business Outcomes (Geschäftsergebnisse)
  • Level 5: Return on Investment (Kosten-Nutzen-Verhältnis von PM)

Fazit: Wenn Sie sich mit der Wirksamkeit von Projektmanagement auseinander setzen möchten, dann ist diese aktuelle PMI Studie meines Erachtens ein echtes “Must have”!

Für Schnell-Leser/innen: Eine kurze Zusammenfassung der Studieergebnisse finden Sie übrigens in diesem Beitrag der FinancialPost vom 4. November.

Und die Unterlagen zu einer Präsentation von “Value of Project Management” anlässlich der diesjährigen “PMI Research Conference” in Warschau finden Sie HIER.

Waking up the C Suite

PMI are launching an on-going marketing campaign surrounding the release of its Value of Project Management research study. This groundbreaking study has clearly demonstrated the link between implementing good project management practice and a solid ROI [download the Research Overview]. PMI’s campaign through 2009 is designed to get C level executives and Boards of Management to recognise and support project management in their organisations by making a compelling case for project management’s ability to positively influence bottom-line drivers.

Increasing the awareness of the value of project management among the top organisational decision-makers is the vital first step in enabling organisations to introduce the capabilities they need to achieve well executed projects (as identified by OPM3 ProductSuite). Only when executives are actively thinking about, evaluating and seeking to improve their organisation’s project management practices, that the value of well executed project, program and portfolio management can  be fully realised.

Many organisations may already feel they have implemented effective project management processes and have an array of project, program and portfolio managers on staff. However, without an impartial measurement of their actual capabilities there is a high probability things are not as ‘rosy’ as senior management would like to think. There are several reasons for this:

• Taking a ‘top down’ view: Human nature tends towards optimism; experiments have shown most people feel they are ‘above average’ in any given situation. In the absence of effective benchmarking and an empirical measurement system some of the ideas in ‘prospect theory’ are likely to take over and senior management would ‘expect’ their business to be ‘above average’.
• From the opposite direction, it would require a very open culture to allow middle and junior managers to honestly inform their seniors ‘we are not very good’. In most organisations if this message is heard the messenger would be blamed.

As a consequence it is easy for senior management ‘think’ their business is in good shape and middle management is encouraged to support this view if they wish to preserve their position.  The antidote is hard data and benchmarking but the only way this type of assessment can be introduced successfully is from the very top.  The CEO and governing board must lead the initiative to assess the real situation with a view to investing in appropriate improvements.  To achieve this, the organization has to effectively assess its current level of maturity against an appropriate ‘maturity model’. Maturity models are not new, CMMI has been around in the systems engineering space for nearly 20 years and there are several newer models focused on project management.

PMI’s OPM3 (Organizational Project Management Maturity Model) offers a unique set of benefits including a focus on all levels of project governance from portfolio alignment through program management to project management. It also provides a benchmarking capability and an improvement planning capability that can be focused on the areas of ‘improvement’ that will deliver the maximum benefit to the organisation. In short, OPM3 is complete, comprehensive and customisable, particularly is the OPM3 ProductSuite is used.

The value of using OPM3 is not in the assessment; it is in the planned improvements to the organisations processes. Most organisations have a range of ‘low hanging fruits’ that are easy to pick for quick wins (and this is important). It is also true that the payback from increasing levels of maturity may reduce as the organisation’s maturity levels increase. However, as with the quality movement (TQM) the ultimate level in an OPM3 improvement process is the ability of the organisation to continually improve. This is an essential medium term objective, because if an organisation is not continually improving it will be going backwards compared to its competition. If you are not continually improving they will be with the inevitable consequences to your ‘bottom line’ over time (just ask General Motors!).

In my experience, the critical success factors for any organisational improvement initiative are:

• Firstly top level support from the CEO and governing board (it is impossible to initiate an effective OPM3 initiative at the middle management levels).
• Secondly the willingness to invest in improvements; over 95% of the cost of any initiative will be in developing and implementing the improved processes to achieve the desired benefits – doing the OPM3 assessment is the easy bit.
• Thirdly understanding real culture change takes time, investing in an OPM3 initiative can, and should, deliver quick wins but the real benefits come from the changed attitudes and culture within the organisation and this takes several years to really bed down. And until the culture of the organisation has changed, the CEO needs to keep focused on driving the improvements needed to make the organisation successful. 

The second part of this blog will provide an overview of the value proposition proved by PMI in its report Researching the Value of Project Management.

Last week’s PMI GCC executive forum featured a presentation from Janice Thomas, a co-author of the Value of Project Management study (the study’s preview PDF is here and a 90 minute presentation by the lead authors is embedded here).

Janice elaborated on one of the findings — that ROI calculations were almost never done (my earlier post here).  It turned out that only one of the 64 organizations studied could put together rock-solid ROI numbers.  A number of others could have put some numbers, but didn’t.  These organizations found generating figures on returns onerous — and not worth the effort — because of a three-fold problem:

• ROI had not been considered closely enough at the beginning of the PM initiative.  In other words, little benefits realization work had been done — few if any KPIs were envisioned or no baseline was established for those KPIs. 
• PM initiative costs weren’t tracked closely enough.  Amazingly enough, it appears that few of these project management improvement efforts weren’t managed as projects or programs.  Oops.
• Organizations that didn’t perform projects for a living were more concerned with fixing the basics of PM.  Improving customer satisfaction or project delivery measures was good enough for these organizations.

Executive buy-in and support: more comments on the first results of the PMI Value of PM study, earlier posts (here , here, here, here, and here).

Value measures should first focus on the tangible (e.g., ROI, better margin) or making the intangible more tangible (e.g., tying customer satisfaction to revenue or reduced escalation costs).  In addition, I would also suggest that one should also look at how much value one’s executives attribute to project management.  Of course, the initiative has to have delivered results.  But many PMOs forget to ensure that senior leadership understands exactly how PM improvement translates to the firm’s bottom-line, top-line, brand value, etc.

One of the most powerful endorsements of SAP’s project management efforts came from the current CEO of SAP America, Greg Tomb.  During our global services leadership summit, each regional leader presents a short presentation on the “whats and whys” of his/her unit’s performance.  When Greg was discussing the excellent revenue, margin, and customer satisfaction results in the Americas, he explicitly credited project management as the foundation for all three.

“Public” and vocal executive references are some of the best intangible value proof points.  Not only was the recognition appreciated by the Americas PMO leadership, it also reinforced the global PMO message to the rest of the global leadership team: project management works.

Guess which color is the maturity rating and which is cost/revenue...

Re: demonstrating tangible value — comments on the first results of the Value of PM study — earlier posts (here and here), the study’s preview PDF (here) and a 90 minute presentation by the lead authors (embedded here).

Only half of the case study organizations could demonstrate tangible value from their project management efforts and initiatives. The study had several observations about these two groups, the first applies directly to our PMO: “Organizations That Could Calculate ROI… those that deliver projects for customers”

The fact that we support units responsible for customers, revenues, and profit made a huge difference in our ability to measure ROI.  In no small measure, SAP’s increased margins over the past four years have come from our ability to better bid, monitor, and control projects. 

And we have nice data series and graphs that track increased global maturity vs. SAP margins and SAP troubled project expenses.  That’s not to say we didn’t run into the challenges the study noted:

However, even where ROI could be calculated… It isn’t.  The data isn’t being collected [and] the answer isn’t considered meaningful.

Early on, PM skeptics challenged our claims. The data was considered unreliable and at first we couldn’t show a direct impact from our efforts. 

But the fix was simple: rather than giving up, we highlighted global and regional initiatives that created or improved key processes that all acknowledged were margin levers. Even better, we used that original graph to map those initiatives to inflection points in our performance.

Funny how the skeptics disappeared after seeing the updated graph for the first time.

As promised, I’m going to blog on the Researching the Value of Project Management study that PMI will release soon (preview PDF here).  This conclusion about value growth and persistence struck me first:

Where Value Is Being Sustained And Continuing To Grow, There Is On-going Focus And Improvement Underway

Well, that sounds a bit obvious. One would expect that value would grow with “on-going focus and improvement”. But is value already demonstrated and delivered automatically “being sustained”? The answer apparently is “No”…

Organizations That Stop Focusing On Value, Or Believe That They Are ‘Done’:
– Stop demonstrating value
– The act of not enhancing value appears to destroy value

Ah… now that’s something to remember. Our PMO fell into this trap.  We thought our “Level 2″ project management training was just fine, thank you. Unfortunately, our customers didn’t think so.  It got to the point where one of our most important regions developed its own training to replace ours. 

Some of the value decline was real: our training missed topics that had emerged since its development.  However, the most critical part of the value decline was perceived.  Our unwillingness to address pain points — and the need for one of our customers to become self-sufficient — undermined our relevance. 

The bottom line is simple.  If my group doesn’t stay focused on sustaining and building value, people start to ask: Why do we have a Global PMO anyway?