Choosing the Right PMO Vision: 2. Senior Executive Pain- the Raw Numbers
My last few posts concentrated on some key considerations when choosing a PMO vision. They had to do with why a PMO is being considered in the first place, the reporting structure and the underlying theme. All of these are important because they are often the basis of pursuing the wrong direction and wrong vision. Once a good discussion of these three areas is performed the degree of the problem specific to the company should then be analyzed, understood, and agreed upon. This problem deals with the pain that the organization is feeling which translates to senior executive frustration.
Here are some fairly well researched statistics related to project management performance gleaned from a variety of sources. It doesn’t matter if they are on the nose- what does matter is where your company is in relation to them:
1. 74% of projects are unsuccessful. Let’s just say that unsuccessful means overshooting project budgets, not completing major tasks, not producing to expectations. This doesn’t even consider whether the projects are the right projects to be doing. Some estimate that this failure rate is higher on IT projects. Why not 100% success- what is holding us back?
2. 25-40% of project spend is waste because of rework. A lot of this is due to stopping and starting due to resources that are multi-tasked. Other reasons simply have to do with poor requirements definition and changing purposes of projects.
3. Less than 10% of formulated strategies are effectively executed. Projects are required for strategies to succeed. If project management is out of control and/or projects have a high failure rate, execution of strategies will suffer.
Senior executives may intuitively know that they are in the same boat. Worse yet many do not know how to correct the situation and many do not see execution of strategies as a project management issue. My next post will complete the senior executive pain area with some equally frustrating problems that are not as easy to quantify.
