PROJECT MANAGEMENT: ARABS LOSE LESS MONEY
"GCC More Efficient in Project Management"
Mega projects in the GCC meet their objectives and lose less money than the global average. For every $1 billion project about $109 million are lost on a worldwide average, which is close to 11 per cent, says Mark A. Langley, the president and CEO of Project Management Institute.
However, the money lost due to reasons such as a project’s goals, budgeting and timeliness is just eight per cent in the GCC, mostly because of better management of projects, fixed prices and government funding, he says.
The US-headquartered institute has globally recognized standards and certification program, extensive academic and market research programs, chapters and communities of practice, and professional development opportunities.
The institute has close to 12,000 members in the GCC, who keep a close eye on projects in the region in terms of building standards and best practices.
Overall, organizations in the Middle East waste an average of $79m for every $1bn spent on project – $30m less than the global average of $109m lost. In addition, PMI’s 2014 Pulse of the Profession reports that strong focus on the strategic practices surrounding processes; people and outcomes – and close alignment of projects to the strategy of the organization – enable the successful completion of more strategic initiatives.
The latest research from the Project Management Institute (PMI) reveals that organizational leaders are changing their approach to strategy. Though executives know what they should be doing – 88 per cent of them say that strategy implementation is important to their organizations – 61 per cent acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation. This gap demonstrates a lack of understanding among organization executives that all strategic change happens through projects and programs.
“Organizations are beginning to realize that improving the alignment of strategic initiatives impacts project success and the success of the organization. Organizations in the Middle East, in particular, are achieving the tangible, bottom-line benefits that effective project and program management deliver,” said Langley. “However, our report shows that many organizations are still not aligned and suffer as a result. With a steadily growing economy and increasing global complexity, now is the time to refocus on aligning project and program management with organizational strategy to improve results.”
PMI’s 2014 Pulse of the Profession demonstrates the significant implications of this change:
* Very few organizations (9 percent) rate themselves as excellent on successfully executing initiatives to deliver strategic results. Consequently, only 56 percent of strategic initiatives meet their original goals and business intent.
* This poor performance results in organizations losing $109 million for every US$1 billion invested in projects and programs.
* High performing organizations successfully complete 89% of their projects, while low performers complete only 36% successfully. This difference in success results in high performing organizations wasting nearly 12 times less than low performers.
“While not all projects and programs rise to the level of a ‘strategic initiative,’ all of an organization’s strategic initiatives are implemented through projects or programs that inevitably change the business,” said Mark A. Langley, president and CEO of PMI.
“Most in the C-suite fail to realize this simple truth. Maybe more would if they assigned a senior executive to oversee strategy implementation the same way many of them designate a Chief Strategy Officer (CSO) who has responsibility for strategy development. When that person is supported by an organization culture of project management, including a high performing PMO, that is when we will see project success rates climb.”
To increase success and achieve these results, PMI’s 2014 Pulse of the Profession shows that organizations must continue to focus on:
* People: Managing and developing talent. Organizations will need to create a culture receptive to change and an increasing focus on the critical ‘human factor’ to include ongoing training in project management tools and techniques, a formal and effective knowledge transfer process, and well-established competency development programs and career paths for project managers including a process in place to manage it, and have actively engaged sponsors on projects.
* Processes: Maturing project, program and portfolio management capabilities. In achieving this, many organizations turn to their enterprise PMO to instill a top-down understanding of the value of project management throughout the organization and establish standardized project management practices.
* Outcomes: Measuring and communicating the benefits of successful projects. Establishing benchmarks and metrics for project results allows both high-level strategists and front-line executors to see the value that successful projects (and successful strategic initiatives) bring to the organization.
By Atique Naqvi | Dubai, UAE | Uploaded on the blog recently**
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| Arab companies lose $30m less than global average per $1bn spend. |
Mega projects in the GCC meet their objectives and lose less money than the global average. For every $1 billion project about $109 million are lost on a worldwide average, which is close to 11 per cent, says Mark A. Langley, the president and CEO of Project Management Institute.
However, the money lost due to reasons such as a project’s goals, budgeting and timeliness is just eight per cent in the GCC, mostly because of better management of projects, fixed prices and government funding, he says.
The US-headquartered institute has globally recognized standards and certification program, extensive academic and market research programs, chapters and communities of practice, and professional development opportunities.
The institute has close to 12,000 members in the GCC, who keep a close eye on projects in the region in terms of building standards and best practices.
Overall, organizations in the Middle East waste an average of $79m for every $1bn spent on project – $30m less than the global average of $109m lost. In addition, PMI’s 2014 Pulse of the Profession reports that strong focus on the strategic practices surrounding processes; people and outcomes – and close alignment of projects to the strategy of the organization – enable the successful completion of more strategic initiatives.
The latest research from the Project Management Institute (PMI) reveals that organizational leaders are changing their approach to strategy. Though executives know what they should be doing – 88 per cent of them say that strategy implementation is important to their organizations – 61 per cent acknowledge that their firms often struggle to bridge the gap between strategy formulation and its day-to-day implementation. This gap demonstrates a lack of understanding among organization executives that all strategic change happens through projects and programs.
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| Mark A. Langley |
“Organizations are beginning to realize that improving the alignment of strategic initiatives impacts project success and the success of the organization. Organizations in the Middle East, in particular, are achieving the tangible, bottom-line benefits that effective project and program management deliver,” said Langley. “However, our report shows that many organizations are still not aligned and suffer as a result. With a steadily growing economy and increasing global complexity, now is the time to refocus on aligning project and program management with organizational strategy to improve results.”
PMI’s 2014 Pulse of the Profession demonstrates the significant implications of this change:
* Very few organizations (9 percent) rate themselves as excellent on successfully executing initiatives to deliver strategic results. Consequently, only 56 percent of strategic initiatives meet their original goals and business intent.
* This poor performance results in organizations losing $109 million for every US$1 billion invested in projects and programs.
* High performing organizations successfully complete 89% of their projects, while low performers complete only 36% successfully. This difference in success results in high performing organizations wasting nearly 12 times less than low performers.
“While not all projects and programs rise to the level of a ‘strategic initiative,’ all of an organization’s strategic initiatives are implemented through projects or programs that inevitably change the business,” said Mark A. Langley, president and CEO of PMI.
“Most in the C-suite fail to realize this simple truth. Maybe more would if they assigned a senior executive to oversee strategy implementation the same way many of them designate a Chief Strategy Officer (CSO) who has responsibility for strategy development. When that person is supported by an organization culture of project management, including a high performing PMO, that is when we will see project success rates climb.”
To increase success and achieve these results, PMI’s 2014 Pulse of the Profession shows that organizations must continue to focus on:
* People: Managing and developing talent. Organizations will need to create a culture receptive to change and an increasing focus on the critical ‘human factor’ to include ongoing training in project management tools and techniques, a formal and effective knowledge transfer process, and well-established competency development programs and career paths for project managers including a process in place to manage it, and have actively engaged sponsors on projects.
* Processes: Maturing project, program and portfolio management capabilities. In achieving this, many organizations turn to their enterprise PMO to instill a top-down understanding of the value of project management throughout the organization and establish standardized project management practices.
* Outcomes: Measuring and communicating the benefits of successful projects. Establishing benchmarks and metrics for project results allows both high-level strategists and front-line executors to see the value that successful projects (and successful strategic initiatives) bring to the organization.
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