Projected Results: Sound project management practices, combined with a complete technology platform, have an immediate and lasting impact on an organization’s bottom line.
By Melissa Centurio Lopes on Dec 13, 2012
Article By: Alan Joch, is a business and technology writer who specializes in enterprise applications, cloud computing, mobile computing, and the Web.
It’s no secret that complex, large-scale projects need close management controls to ensure that they’re delivered on time and on budget. But now there’s growing evidence that failing to meet these goals can have far-reaching consequences, not only for the reputations and value of individual organizations but also for the tenure of their top executives.
Government watchdogs forced one large contractor to suspend a multibillion-dollar defense program—and delay payment receipts—until a better management system was launched to more accurately track spending, project milestones, and other fundamental metrics.
Significant delays in the opening of the £4.3 billion Terminal 5 at Heathrow Airport impaired an airline’s operations and contributed to a drop in its share prices.
These real-world examples are noteworthy because of the huge financial risks they created. They’re also far from being isolated cases. Research by the Economist Intelligence Unit found that only 11 percent of companies claimed they delivered expected ROI on major capital projects 90 percent of the time or more. In addition, 12 percent of respondents said they achieved planned ROI less than half the time. According to Phil Thornton, lead consultant at the analyst firm Clarity Economics, the numbers demonstrate obvious challenges related to managing risks, accurately predicting ROI, and consistently delivering bottom-line growth for major capital investments
“Portfolio management is a path to improve your organization’s competitive advantage. It helps make sure your organization is investing in the right things and not spending its time on things that are not delivering the intended results for the firm.”