From day one, we are conditioned to compare. Whose baby has the cutest smile, who had the most hits in the Little League game, and what is your GPA and SAT scores? As we grow older the comparisons shift and the stakes increase – how am I doing vs. my peers, is my company performing well vs. my sector or industry, and how can I beat the competition?
Project management professionals – PMOs, CIOs, and IT Management – must focus on how the project portfolio stacks up. Why? Because the portfolio is where a majority of the investment goes. The project portfolio is likely comprised of innovation projects, maintenance work, sustaining operations, strategic initiatives, and new product development. More importantly, the project portfolio is where resources are spending a majority of their time and they are the organization’s most valuable asset.
Innotas recently conducted a survey across various industries, organizations, and roles. Below are five key statistics that describe the landscape:
1) Over 50% of organizations say their projects and resources are not well aligned with business goals
I once heard someone say a successful project that is not aligned to business goals is like a doctor saying, “The operation was successful, but the patient died.” The purpose and goal of projects should not be focused on the output, but the outcome. Successful execution or completion of projects and initiatives is no longer enough. The focus must be on the project outcome – creating value for the organization which means your projects must be aligned with business goals. Simply put business alignment = business value.
2) Resourcing is the #1 challenge for most organizations
Organizations reported that resourcing is less of a challenge than in 2014, but it maintains the top challenge heading into 2015. This should not be a surprise. Every organization has more project demand than they can handle and it is usually because of limited resources (or budget to hire resources). Prioritization has become a greater challenge (when comparing year over year) with the #2 spot. Rounding out the top three is alignment, implying project and portfolio management teams are placing increased emphasis on improving upfront planning to create more value for their key stakeholders.
3) Over 60% of organizations do not have enough resources to manage project demand
This is not surprising as the top challenge for organizations has been resourcing for the past two years. With close to two-thirds of organizations still struggling with finding enough resources, there must be focus on optimizing the available resources to ensure delivering maximum value. This will require asking the tough question: “Are our resources working on the right projects at the right time?” If you cannot answer “yes” confidently, then your organization likely has room for improvement with project prioritization and resource scheduling. Utilizing tools that integrate predictive analytics technology or what-if scenario planning can help ensure your resources are optimized.
4) 49% utilize scoring based on business objectives to align and prioritize projects
Scoring is the most popular method among organizations who have a formal methodology for prioritizing and aligning projects. This is largely unchanged from 2014, where the survey found 50% were using scoring. Scoring is by far the most efficient and low hurdle way to get some prioritization method started in any organization. The reason is scoring can be customized to fit your specific organizational needs and culture – you can make your criteria simple or as complex as desired. For example, organizations can start with a simple 0 to 10 score for incoming project demand. As acceptance and adoption increases, the scoring criteria can become more complex to include weighting or aggregating a pool of scores across team members and key stakeholders. The key is to build consensus on the criteria and build from there. Getting a few “quick wins” into the organization can go a long way.
5) 45% are investing in a project portfolio management (PPM) solution
Implementing prioritization, organizing resources, or aligning project work all require some form of process or organizational change. However, you cannot measure and manage the effectiveness of the processes without a tool to help you report and communicate the progress. Project portfolio management (PPM) software is designed to create efficient project management and strategically define a system for resource optimization. With a portfolio management solution in place, organizations are better equipped to execute on their initiatives, achieve desired results and ultimately drive more value.
Regardless of how mature your organization is, benchmarking and knowing where you stand is the first step towards improvement. You can download the full report here and get more key statistics to help assess where your organization stands.