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August 2008 Archives

The New ROI?

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The Researching the Value of Project Management study raised some serious questions about ROI. It may even cause project professionals and executives alike to re-evaluate their definition of what ROI actually is. According to the study, organizations are looking for more than just the usual "on schedule and on budget" demands from project management.

So what satisfies organizations now in terms of ROI? My theory--and granted, it's not a groundbreaking one--is that organizations now expect project management to contribute to the overall business strategy and results of the organization.

I checked in with Sheilina Somani, PMP, owner of the U.K.-based Positively Project Management consulting firm, and a PM Network columnist. And here's what she had to say:

"I'm experiencing more management commitment to meeting performance indicators and creating organizational value--such as optimizing a process, increasing efficiency, streamlining business efforts and, of course, cost saving, which in the current economic climate is critical."

But that raises another important question: How can executives get project managers to consider the overall business strategy of an organization when they launch a project? Ms. Somani had some thoughts on this as well.

"I believe this is the responsibility of the project manager. For me, working as a [project manager] for a client, I expect to have to know the business, ask questions about strategy and understand where the project fits for the organization. To have executives encourage/direct project managers to think this way--first of all make it part of the job role--an explicit responsibility to know the business, the marketplace of the organization and the corporate strategy. Thereafter, it's by asking questions of the [project manager] regarding the organizational value of the project, the perceived benefits to the organization and of the course the strategic fit."

Want More Information?

The results are in: Project management does have value. If you didn't get a chance to view the full presentation of PMI's Researching the Value of Project Management preliminary results you can still watch it now. You'll hear more about the tangible vs. intangible benefits of project management, along with the importance of fit. It clocks in at about an hour--definitely time well-spent.

The preliminary results of PMI's Researching the Value of Project Management study was given by principal researchers Janice Thomas, Ph.D., and Mark Mullaly, PMP, on 14 July 2008 during PMI's Research Conference in Warsaw, Poland. For more on the study, be sure to check-out the full monograph, available this October.

Why Projects Fail

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I was doing a little research for this post and like every good writer these days I started with Google. I typed in "why projects fail" and came up with 16,700 entries. The first few pages were dominated with entries like "Top 10 Reasons Projects Fail" and "Why Projects Fail: Part 1." So what were some of the answers? Some articles blamed a lack of user involvement. Others said projects were started for the wrong reasons.

There was nothing related, however, to organizational fit or to measuring intangible benefits as part of your ROI. It made me wonder: Will the results of the Researching the Value of Project Management study change the way the profession thinks about project failure? Will things like the makeup of the organization--and how project management plays into that--become more important to a project's failure or success? And, how can organizations use the results to improve the way they achieve project results?

All good questions, right? And I hope to get the chance to ask the study's principal researchers, Janice Thomas, Ph.D., and Mark Mullaly, PMP, at PMI's North American Congress 2008 in Denver, Colorado, USA. It's coming up in October, and I hear they will be giving a special presentation on the research.

Coming Soon ...

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Want proof that project management does add value to organizations? Check out a short video on Researching the Value of Project Management featuring fresh insights on both the tangible and intangible benefits of project management from principal investigators Janice Thomas, Ph.D., and Mark Mullaly, PMP, and some of the study's contributing researchers, including Terence J. Cooke-Davies, Ph.D.

The Value of Standards

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Did you know that this month PMI is celebrating 25 years of standards creation? Tuesday, I interviewed Debbie O'Bray for an upcoming PMI.org story I am writing on PMI standards. She has been involved in standards development for quite some time and is currently a member of the Standards Member Advisory Group.

The interview got me thinking about the added value of standards. For some project professionals, they serve as a constant companion while for others these standards are guidelines or references project professionals can turn to with questions. But for everyone, the standards help create a common language to help communicate about everything from project scope to risk. And that common language is a key intangible benefit revealed in the Researching the Value of Project Management study.

In the presentation of the study's preliminary results in Warsaw, Poland, principal investigator Janice Thomas, Ph.D., said:

"The good news is that most organizations demonstrate intangible value and its significant intangible value around decision-making, around strategy, around effective work cultures, around alignment of approach, around terminology ..."

For my story, I also interviewed team members of different standard development teams. They devote time--sometimes years--to helping develop PMI's library of standards.

Obviously they see the value of standards. And this leads me to one conclusion: The value of standards and the value of project management go hand in hand.

The Value of Satisfaction

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Companies around the globe are constantly touting their ability to keep customers satisfied as a competitive advantage and selling point. Google vs. Yahoo, Lexus vs. BMW, Sony vs. Zenith--these battles can be won and lost based on customer satisfaction.

Just think about the last time you were really disappointed with a product or service. Did you go back to the same company or brand the next time around? Face it, most people would say no.

Satisfaction is something that resonates with both companies and consumers. And this is a lesson project professionals can take hold of.

Initial results from PMI's Researching the Value of Project Management study clearly show consistent processes lead to consistent results and greater satisfaction from everyone involved. That covers everyone from the people in the trenches performing the work every day to the end-users who see the final product.

In light of all the possible rewards companies stand to gain from satisfied customers--repeat business, brand loyalty, even evangelism--who says satisfaction isn't a tangible benefit?

For the Project Manager

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We've talked a lot about what the Researching the Value of Project Management study means for executives, but what does it actually mean for the in-the-trenches project manager? How do they benefit?

First of all it re-emphasizes the importance of the work they do.

But listening to interviews with principal investigators Mark Mullaly, PMP, and Janice Thomas, Ph.D., I see it goes beyond that. It helps project managers in a few key ways, including:

1. Understanding what support they need in the organization to be the most effective

2. Implementing the most effective project management practices in their organizations

3. Understanding how project management ties to the strategic direction of their organizations

But it doesn't end there. Once the full report is available, the library of 65 case studies can be used by project managers for lessons learned. It will also help the next generation of project leaders. Several of the academicians I spoke with during and after PMI's Research Conference have said they will be able to take the study and use it in their classrooms. In fact, some of them are already doing precisely that.

On the Street

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In the days following the release of the preliminary results from Researching the Value of Project Management, conference-goers weighed in on the importance of the study. Here is a snapshot of some of their thoughts:

 "It's a landmark study that we all have been looking forward to. ... The results will be felt for many years to come."
--Frank Anbari, Ph.D., United States

"They've gathered a huge quality of very valuable data, the analysis of which will probably take a couple of years. So the presentation that Janice [Thomas] and Mark [Mullaly] gave just gives us the tip of the iceberg. I think they did a very good job presenting how rich that data is, but one thing became very clear out of it. There's a bit of a paradox here. Companies are asking for ROI, but even when they have the opportunity they're not measuring the cost of the benefits."
--Brian Hobbs, PMP, University of Quebec, Quebec, Montreal, Canada

"It was a huge study. ...I can see some very interesting case study work coming out of that and I'd be very keen to read it."
--Derek Walker, Australia

"One thing that struck me in the results of the Researching the Value of Project Management is that there were no companies that were at the [higher] maturity levels. To me, that might be an indication that companies stop at certain points. They see value in project management and they invest in getting common models, common training for their project managers, common terminology, but after a certain level of maturity they stop. So that's probably something that needs to be further investigated to understand ..."
--Yven Petit, PMP, Canada

Come back for more interviews.

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