In the face of increasing globalization and competition, which organizations survive and prosper in the coming years will, in large part, depend on how well they deploy their existing tools and resources.
Striking a balance between competing projects and competing project priorities can be quite difficult when it comes to identifying the most cost-effective returns. Once that decision has been made, failure to deliver on the project results in a loss of not only direct project costs, but also the opportunity cost of not implementing a competing project. Therefore, to best survive today’s tough economy, organizations now more than ever need to be able to deliver on their planned projects. Early detection and evaluation of potential project failures provides the surest route to corrective actions and improving project outcomes.
The Costs of Poorly Prioritized Projects
The Standish Group Chaos Report estimates that only about one-third of projects meet the success criteria of on-time, on-budget and with acceptable functionality. Research by other groups reports similar numbers. With that in mind, even modest improvements in the success of project prioritization and project delivery can provide large dividends to companies willing to invest the time and resources necessary to achieve those gains. In addition to the obvious monetary losses to project failures, the following are also frequent costs:
- Decreased employee morale
- Decreased effectiveness of competing projects
- Increased risk of competitor dominance
- Increased employee turnover
- Impact to the organization’s surrounding community.
When a project fails, the team’s morale is damaged 73 percent of the time, on average. This can lead to skepticism about future projects, as well as organization direction. Increasingly, this can lead to higher employee turnover due to the perceived stress of the position and, in some cases, downturns in the surrounding community, depending on the size of the organization.
Timely Evaluation of Project Effectiveness
Not every company will fail because it has poor project prioritization and project execution. However, especially in today’s economy, every company can benefit from improvements in its project and program management prioritization. Also, not all projects can be made to run perfectly. Instead, the key to improving is establishing a process for prioritizing the correct projects the organization should pursue, and then identifying and tracking the proper attributes to measure for success. Once a project has been appropriately prioritized, the company leadership needs to establish a process for the clear, concise assessment of projects early in their execution. This allows the proper corrective actions to be taken on a project before it strays too far. A further key to improvement is extrapolating the common attributes from individual projects that can be improved at a program level. This activity is called a Project Execution Assessment (or project assessment for short). The common project success attributes measured as part of this process can be grouped into three categories:
- Project scope assessment
- Project metrics and tools assessment
- Program level impact assessment.
Project success attributes within these categories include quality planning, requirements capture and project manager expertise. These attributes can be objectively evaluated and ranked using focused project interviews and project document reviews as part of the project assessment. A summary of these attributes can then be used to quickly target those areas of a project that are doing well, as well as areas needing improvement.
By providing a common measurement, the project assessment method can also identify those attributes that are having issues across projects. These areas provide opportunities for improvement across the program and potential for even further savings to the organization. iBi