There's been a marked increase in the number of projects being undertaken by Kiwi organisations - but two thirds of the projects fail, according to KPMG's Project Management Survey released today.
The survey categorises a "project" as a temporary group activity designed to produce a unique product, service or result.
According to Perry Woolley, a KPMG director specialising in project management, the average reported cost of each project is NZ$15 million. But the survey results indicate that only one-third of that money is delivering the desired outcome.
“If those results are extrapolated across New Zealand’s public and private sector organisations, then it equates to a truly staggering waste of resources,” he said.
The survey is conducted every two years. The latest survey, in which 208 organisations participated, shows that in the 12 months to September 2012, some 54 per cent of organisations surveyed completed more than 21 projects.
But KPMG said that despite this significant increase in project activity, in general, the latest survey results showed that organisations did not appear to be doing better at capturing the business value of their projects than they were in previous survey.
"Worryingly, we also see an overall increase in project failure rates..."
The survey results results identified lower than average success rates in the government and financial services sectors.
Also too, the survey found that most organisations found it difficult to define what project success looks like.
"While the success of each individual project should be defined at project initiation, traditionally, success in projects is defined on three measures – timely delivery, delivery on-budget, and delivery of the stated deliverables," the survey report said.
"Our 2012 data showed only 29% of respondents [down from 36% in 2010] consistently delivered projects on-time, only 33% [down from 48%] consistently delivered on-budget, and only 35% [down from 59%] of respondents consistently delivered on scope.
"Compared with our 2010 Survey, this is a significant decrease in project success rates."
On the positive side, Woolley said New Zealand organisations were generally more aware of the challenges of project management, and were showing a higher awareness of what must be done to improve.
New Zealand’s high-performing organisations adopted a number of ‘good practices’ that correlated highly with project success. For instance, they used a proven project management methodology, and had effective risk management strategies.
Another key factor for success was having a Project Management Office (PMO) within the organisation.
"Worryingly though, while PMOs become more common worldwide, the latest survey showed there has been a 30% decline in the number of PMOs across New Zealand since 2010.
“We strongly recommend that all New Zealand companies involved in significant project work should seriously consider the value of having a PMO,” Woolley said.
"Companies that have poor delivery records are now waking up to the fact that project managers need support and infrastructure to deliver more reliably. The days of relying solely on the ‘superhero project manager’ are numbered."
5 Comments
Actually, you just have to apply logic. Why that is so difficult for so many, is the puzzler.
Every time any choice is made, the low-hanging fruit is picked first. Doesn't matter what it is, that's what happens. If the early entries picked fruit from higher up then the low ones are soon retrieved when the penny drops.
This sequence means that things get harder, more marginal, more specialised, as time goes on. Curtail the energy input to the overall system, combine with competition pressure, and all you can expect is increasing failures - both physical and financial. Doesn't matter how good the PM was/is.
Some folk, of course, complain that people are scaring them, then they retreat into their comfort-zone shells, and attempt to blame-shift the increasing rate of failure onto something comfirtably blameable.
That said, this is a promo, surely?
That some really big variances in percentages, if the numbers jump back up next year will there be wild celebration about how much better things are getting?
There are any factors that could be coming into play- can the increaseing number of projects mentioned at the start, with more failures overall be explained by more proof of concept projects killed at the point of "we can do this, but now that we know how (and what it will take) we can judge it is not feasable/desirable" stage.
From the headline figures we just can't tell. Projects failing is not a bad thing if they are cheap exercises and you learn valuable information from the failure, projects failing is a bad thing if it is an expensive flop that you learn nothing from the failure (huge IT projects with ill planned implementation meaning they don't work in the context they were intended for, I'm looking at you).
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