What Poor Project Management Might Be Costing You
- by Sylvie MacKenzie, PMP
For project-intensive organizations,
capital investment decisions define both success and failure. Getting
them wrong—the risk of delays and schedule and cost overruns are ever
present—introduces the potential for huge financial losses. The
resulting consequences can be significant, and directly impact both a
company’s profit outlook and its share price performance—which in turn
is the fundamental measure of executive performance.
This intrinsic link between long-term investment planning and short-term
market performance is investigated in the independent report Stock Shock,
written by a consultant from Clarity Economics and commissioned by the
EPPM Board. A new international steering group organized by Oracle, the
EPPM Board brings together senior executives from leading public and
private sector organizations to explore the critical role played by
enterprise project and portfolio management (EPPM).
Stock Shock reviews several high-profile recent project
failures, and combined with other research reviews the lessons to be
learned. It analyzes how portfolio management is an exercise in
balancing risk and reward, a process that places the emphasis firmly on
executives to correctly determine which potential investments will
deliver the greatest value and contribute most to the bottom line.
Conversely, it also details how poor evaluation decisions can quickly
impact the overall value of an organization’s project portfolio and
compromise long-range capital planning goals.
Failure to Deliver—In Search of ROI
The report also cites figures from the Economist Intelligence Unit
survey that found that more organizations (12 percent) expected to
deliver planned ROI less than half the time, than those (11 percent) who
claim to deliver it 90 percent or more of the time.
This fact is linked to a recent report from Booz & Co. that shows
how the average tenure of a global chief executive has fallen from 8.1
years to 6.3 years. “Senior executives need to begin looking at
effective project delivery not as a bonus, but as an essential facet of
business success,” according to Stock Shock author Phil
Thornton. “Consolidated and integrated visibility into individual
projects is the most practical solution to overcoming these challenges,
which explains the increasing popularity of PPM technologies as an
effective oversight and delivery platform.”
Stock Shock is available for download on the EPPM microsite at http://www.oracle.com/oms/eppm/us/stock-shock-report-1691569.html
