You are not in control of value creation in your organizations business critical projects ...
Updated: Jun 26, 2020
... If you can answer yes to less than 8 out of 10 statements below, then you are most likely not managing your company's business-critical projects closely enough, which means losing great value in the form of lost market opportunities, over-exploitation of resources, dissatisfied customers, stressed employees, lack of bonuses, unhappy bosses, bad karma and many other negative consequences. If your company operates more than 10-15 projects annually, there are large sums of money and many soft values to be captured in improving the scope, turnaround time and financial perspectives - through the real value creation of the projects. The majority of Danish companies do not work with a measurable value creation approach in their projects - only 13% are aware of and have anchored the profit realization in the organization (1). A "time - plan - budget" approach continues to be used to measure project success. Despite the fact that many companies have implemented project managers, PMOs, project management tools and project management models (PRINCE2, PMP, SAFe, etc.), the realization of the gains in projects is not reached, because of the fact that the realization of profits is not part of the management's objectives and thus does not have the necessary managerial awareness and support. Do yourself a favor and review your project portfolio on the dimensions below - then launch efforts to lift your maturity in areas that are lagging behind - there is a lot of money and many soft bebefits to gain in a value-based approach to project and portfolio management. You control the value creation in your company's projects when; 1) All projects are based on business cases that have been verified in collaboration with a steering committee and company management.
2) All projects report on parameters and dimensions that are directly linked to the value-adding objectives of the business case.
3) All projects have a project team that includes the full value chain, which means that the members of the project team consist of equal parts management, systems, processes, business and organization.
4) All projects have a documented plan for transfer to operations, as well as defined objectives for realizing the project's benefits during the operational phase. 5) All projects have one person in charge of the realization phase, which reports directly to the management, on the progress of the realization phase - this as a minimum on a monthly basis. 6) All projects report on progress, risks, scope, finance and issues on a weekly basis, in a defined, simple and clear form, so that management can easily and accurately obtain an overview, and take action depending on the status of the projects. 7) All projects are organized into a project hierarchy (portfolio or program) with priority in relation to strategic importance and the size of the potential gains. 8) All projects are staffed/allocated with resources and competences according to the project hierarchy, so that the most important projects take precedence over the less important ones. 9) All projects record changes and have a fixed procedure for approving these changes, so that the scope, plan and budget of the projects are adjusted according to the registered and subsequently approved changes. 10) All projects register and manage RISK's on a daily basis, tracking risks with respect to probability, impact and mitigation as well as assigning the managment of the risks to specific persons. A number of important dimensions and processes must be managed and controlled in order for the company's projects to be expected to deliver the planned results without any major delays or deviations. With the right governance and follow-up, management can ensure that the company's strategic initiatives are realized as expected. You can download a comprehensive checklist in excel at this download link to calculate the value creation index for your company's projects. (1) Reference is made to the "Project Management Survey" conducted by Roskilde University in August 2018, comprising 1,740 Project Manager respondents across industries and with an average of more than 7 years of Project Management experience. The report can be downloaded here.