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Turning Project Management into a Competitive Advantage

According to the Project Management Institutes (PMIs) 2014 Pulse of the Profession report,
organizations lose $109 million on average for every $1 billion spent on projects1. Although the waste
could be worse, organizations should examine ways to reduce it further. PMIs recommendations for
minimizing these losses include greater coupling of projects with organizational strategy and a greater
organizational agility that includes more emphasis on customers and processes. In this article, we will
provide commentary on this report and offer additional solutions from the perspective of our project
management experience.
In the PMI report, the authors state that 56 percent of strategic initiatives meet their original
goals and business intent. This statistic is one factor in the money loss from projects. If a project does
not meet the business goals that inspired it to exist, then it does not help the organization in the way
that it should. Following up this statistic, three out of every five organizations reportedly do not
adequately link their projects to their organizations overall strategy. These misaligned projects report a
greater rate of failure (48 percent to 71 percent).
Projects that are aligned have a greater chance of success for many reasons. It is typically easier
to control the scope of an aligned project because there is a clearer picture of what is required.
Misaligned projects have a greater chance of undergoing scope changes to adhere to strategy, leading to
wasted time, money, and resources. Another reason is that aligned projects are an easier sell to
stakeholders. When stakeholders can see the impact of a project on the organizations plans, they

Project Management Institute (2014). Pulse of the Profession: The High Cost of Low Performance. Project
Management Institute, Inc. Web. 405 N. Jefferson Ave, Springfield, MO 65806 417.414.9886

should be more willing to remove barriers and authorize additional resources to help the project
While the coupling of organizational strategy and projects is important, it is equally important
that organizations assess what their strategy focuses on. In particular, PMI reports that aligning projects
to customer needs is increasingly important. This sounds obvious, but as the authors show, many
organizations had placed customer needs low on their list of priorities. For smaller organizations,
adopting Agile is one way to develop a more customer-centered approach because of its focus on
delivering constant value to the customer.
The people focus should be both outward and inward. Talent management is important for
developing project managers that are empowered to succeed, and also helps to guard against
knowledge loss from outsourcing. Some of the specific practices identified for talent management in the
PMI report include ongoing project manager training, formal processes to develop project managers and
project management practices, and a defined career path2. Project management is a complex job that
encompasses a lot of different areas and capabilities, and having proficiency in all of these is a path that
should take many years to master. With a growing need for project managers, developing them now is
of vital importance.
In addition to developing and managing customers and project managers, organizations must
also manage their processes, finding opportunities for constant improvement. Among some of the
process-related questions in the PMI report survey, respondents reported that maturity in project,
portfolio, and program management were present in the highest number of project successes. Other
conditions present in project success are standard project management practices, the presence of a
PMO, and a commitment to the value of project management.
Among these conditions, arguably the most important is for organizations to understand the
value of project management. Achieving buy-in on project management practices helps secure
commitment to improving processes as time goes on. Without that commitment, the setbacks that are a
natural part of the maturity process may lead to abandonment of project management practices rather
than improvement.
Two recommendations for process improvement include starting small and using data. Whereas
a large project can overwhelm resources quickly, implementing sweeping process changes quickly can
lead to confusion and overwhelm personnel, so starting with small, manageable changes is a good way
to both achieve and measure success. In addition, project managers on process improvement projects
should perform both qualitative and quantitative analysis of the problem. The qualitative data helps
capture the problem, while the quantitative shows it in a compelling light to help overcome typical
resistance factors to change, including entrenched practices (i.e. Its always been done this way).

Project Management Institute (2014). Pulse of the Profession: The High Cost of Low Performance. Project
Management Institute, Inc. Web. 405 N. Jefferson Ave, Springfield, MO 65806 417.414.9886

To recap, organizations need to align projects with their own strategy in order to take advantage
of the re-emerging economic growth. Organizations also need to adopt a greater focus on their people,
both customers outside the organization and project managers and team members inside. Finally, they
should pay attention to their processes and look for ways to improve them. Overcoming these
challenges will help organizations turn their project management into a competitive advantage.
If you would like to optimize the project processes in your organization, please consider our
project management consulting services. 405 N. Jefferson Ave, Springfield, MO 65806 417.414.9886