Research shows PPM and EVM improve project performance
Using Portfolio Management techniques and software increases the chance that your project will hit its budget, schedule and quality targets, and deliver all-important business benefits, according to new research by PricewaterhouseCoopers.
This is the third time that PwC have carried out their Insights and Trends: Current Portfolio, Programme, and Project Management Practices study, based on responses from over 1500 respondents in 38 countries. The most recent report shows that while the use of Portfolio Management hasn’t grown since 2007, it is important for project performance. Which makes us want to ask: why aren’t more companies adopting Portfolio Management?
The benefits of Portfolio Management
With business results being so critical today, Portfolio Management is a way to gain competitive advantage. It’s a good way of improving project success rates, and the PwC study reports that nearly two out of three organizations that use Portfolio Management say that more than 90% of their projects hit their targets for scope, quality, cost, benefits and schedule. That’s impressive – and it’s even more interesting to find out that 70% of organizations that don’t use Portfolio Management find that less than 10% of their projects hit their targets.
You might assume that the companies getting the best results with Portfolio Management are those doing easy projects as part of straightforward portfolios, but that isn’t the case. PwC looked at portfolios with a range of investment values, durations, number of projects and people involved. The benefits of Portfolio Management hold true even in portfolios with an investment of more than US$60bn, 10 years of effort, over 100 projects and more than 200 people involved.
On top of that, project management teams believe that their companies perform better as a result of using Portfolio Management. More respondents say that they are effective and efficient in companies where Portfolio Management techniques are in use than in companies without Portfolio Management.
If your business is struggling to make that extra leap when it comes to performance, Portfolio Management could be the answer.
Portfolio Management software improves performance and satisfaction
We’ve seen products like Primavera software increase in sophistication over the past few years so it’s heartening to see that research backs what we have always known – Portfolio Management software improves portfolio performance and increases the feeling that a company’s project management practices are benefiting the organization.
Over half of companies using Portfolio Management practices are also using software to support their efforts, most of whom are choosing commercial, off-the-shelf products rather than developing their own tools internally. In fact, where companies choose to build their own tools, the improvement in performance is mixed: mid- to large-scale portfolios don’t get the benefits, and the study concludes that software developed in-house only benefits small portfolios.
The other key finding regarding Portfolio Management is that an Enterprise Project Management Office really makes a difference. Where Portfolio Management and the associated software are managed by an Enterprise PMO, the performance of portfolios is consistently twice as high as those where portfolios are managed by other groups. In other words, having an enterprise PMO to increase the adoption of software tools, to support project managers and to improve standardization across the company, gives you double the performance improvement than if you leave portfolio management to disparate groups or individuals. That’s impressive!