Our experience on project and portfolio management gained at the largest companies of the private and public sector in Greece clearly indicates that they do not. Most organisations experience fragmented change initiatives which are inconsistent, uncoordinated and unlikely, overall, to add value to their business.  

Projects are hard – balancing benefits and resources of change initiatives at organisation level is even harder. Organisations may not have difficulty answering questions like “Was project X concluded within the planned timeframe,” or “How much did it cost us,” but it is very difficult to answer questions regarding the alignment of projects to corporate strategy, their financial benefits and ROI, or the reasons behind their failure. Try: What were the reasons for the deviations from the baseline or the budget? What were the measurable benefits we expected from the implementation of our portfolio of projects? Have we gained so far what we expected? How do the selected projects support the accomplishment of the corporate strategic goals? Are we still moving towards the right direction? Or: Do we feel comfortable enough that the selected portfolio will not face huge issues regarding resource usage, schedule or scope conflicts? Are we in a position to get this information early enough in order to take corrective actions?

Looking through the entire lifecycle of portfolio management, from project selection to completion, and transition to operations, the main reasons we encounter behind the failure of organisations to realise the benefits from project execution are:

– Lack of an objective process to support selection of projects that are fully aligned to organisation strategy and goals. One of the common grey areas we encounter in many organisations is related to the steps that lead to a sound, commonly accepted decision to start new endeavours. Individual projects are approved in isolation, without consideration of the bigger picture and their alignment to business strategy, with incomplete business cases and unclear and generic benefits. On the contrary, “internal politics” or the “voice of the powerful” are commonly used practices. The result is an uncoordinated change roadmap and a lack of ability to measure if the company is moving in the right direction.

– Unclear governance framework to manage portfolio implementation and anticipated benefits realisation. In most cases, there is no defined structure to monitor and govern portfolio implementation and to track, realise and measure its benefits. Critical external and internal changes that occur during the implementation of the projects, unexpected challenges that are encountered by the teams (such as limited resources, conflicting priorities, project baseline changes) are not adequately and timely managed by senior management, with negative consequences in the whole portfolio performance.

– Absence of or inconsistent project management practices. The set of supporting processes and tools to manage a project efficiently and effectively are undefined, vague or not rigorously enforced, with direct consequence to the effectiveness of planning and controlling activities. Cost overruns, scope changes, time delays and dissatisfaction are frequent indications of the poorly managed projects we encounter.

– Lack of project management skills, experience and culture. Many organisations struggle to identify and develop competent project managers. In addition, there is an absence of project culture especially in functionally structured organisations, with limited investment in project management education and skills development, and a lack of incentives and rewards for project teams. These issues can directly lead projects to failure or to considerable deviations from their initial goals.       

It is our view that companies should not tolerate ineffectiveness in managing their project portfolio especially under current economic circumstances. Clearly stopping or suspending projects is not a solution, as it prevents the organisation from evolving and adapting to rapidly changing new business requirements. Managing the project portfolio in a more effective, efficient and sophisticated manner is the key.

Companies should select effectiveness instead of inaction. They should deal with the challenges of aligning project objectives to business strategy, tracking and measuring benefits and performance especially in today’s increasingly dynamic environment, implementing stronger governance and management discipline across portfolios and projects.

Appropriately and well managed and executed projects at organisation level is the vehicle from strategy to reality.

Efi Katsouli is an IT Advisory Partner at KPMG Greece