How to start choosing the right projects

Blog post series
Do the right thing - Blog #2

Choosing the right projects can be challenging, especially for complex organizations, but where can this process be improved?

Project management basics 

Let’s start with the basics – who does what.

According to the Pulse of the Profession study from the Project Management Institute, businesses with a clear project management structure in place have 38% more successful projects that met their original goals than those that did not.

Project management process

The dream of any enterprise-level PMO is to align strategy (doing the right projects) and execution (doing projects right) to effectively manage change. While the PMO is focused on ensuring that selected projects are completed successfully leveraging the right processes, technologies, and methodologies, by contrast, PPM ensures that the organization has chosen projects that are aligned to business priorities, goals, and projected ROI.

Effective portfolio management 

Effective portfolio management increases business value by aligning projects with the organization’s strategic direction. It also makes the most of limited resources and encourages synergy between projects. Unfortunately, many businesses do portfolio management insufficiently, leading to a lack of strategic results and a mix of all the wrong projects.

Why do projects fail?

Many high-profile projects fail because they succeed…they're ill-conceived efforts directed at achieving goals that have little value or relevance to their host organizations.

According to a widely quoted report by the analyst firm Gartner, 55% up to 75% of all ERP projects fail globally.

Project management focuses on ensuring that the project goals are achieved in an efficient manner. The goals themselves are often “handed down from above”, so the relevance or appropriateness of these is “out of scope” for the discipline of project management. Yet, the widespread projects of dubious value suggests that more attention needs to be paid to decision making in the early stages of a project, when the initiative is just an idea.

Choosing the right projects

These ‘front-end’ decisions usually carry more consequences than those made later on. Most major parameters – scope, funding, timelines etc. are more or less set in stone by the time a project is initiated. The problem is that these decisions are made at a time when the availability of relevant information is at its lowest, highlighting the role of sound judgement and estimation in decision making.

Project management lifecycle

Asking and answering the right questions in the right time – this Linkedin Article by Jakub Lasota discusses where PM and PPM collide.

Jakub says, “Many organizations are too much focused on “Project Stage” putting the whole effort on doing the selected projects “in time” and “in budget”, while if there are “no benefits” in the “Asset stage”, excellence in project management will not change the fact that organization will be losing value. For decision-making purpose usually, “10% budget excess” is not actually that painful as “10% sales drop compared with the 10 years’ economic life-cycle forecast. Understanding the long-term impact, expected costs and benefits, project risk and strategic fit is the ultimate goal of growth management."

“60% of companies don’t measure ROI on projects.”

Businesses are about making money, and ROI quantifies the project value. Without it, your chances of success are limited! The main focus of PPM is the strategic horizon of the organization and assuring long-term benefits and growth. 

PPM connects the company's strategy with its operations, transforming and communicating high-level goals into understandable and actionable criteria that should be met by new initiatives created by the organization.

Next blog: 10 reasons why projects fail and how to prevent this.