PMI study – Poor project performance leads to dramatically higher costs

Posted on: September 3rd, 2013 by Jim

The Project Management Institute published a paper (appears to be 2012) called, “PMI’s Pulse of the Profession: The High Cost of Low Performance.” The executive summary is this:

“When organizations continue getting better at executing their projects and programs, they drive success. But when organization executives undervalue the benefit of effective project, program and portfolio management—strategic initiative management—they put real dollars at risk, and perhaps more.

PMI’s Pulse of the Profession™ research shows that fewer than two-thirds of projects meet their goals and business intent (success rates have been falling since 2008), and about 17 percent fail outright. Failed projects waste an organization’s money: for every US$1 billion spent on a failed project, US$135 million is lost forever… unrecoverable. Some other key findings:

-Performance in meeting project goals, timelines and budgets significantly impacts an organization’s ability to thrive. Organizations with high performance risk US $20Million per US $1Billion spent. Their less successful peers risk US $280Million for the same US $1Billion spent.

-The best performing organizations approach project, program and portfolio management
differently from their peers:

1. They create efficiencies to drive organizational success.
2. They focus on talent management and improving its role in project management.
3. They employ project, program and portfolio management practices strategically.

-Training and development in project management has declined since 2010. Fewer organizations are providing training on project management tools and techniques (from 65 percent in 2010 to 59 percent in 2012). Less than half have a process to develop project management competency (45 percent, down from 52 percent in 2010) or have a process to mature existing project management practices (44 percent, down from 51 percent in 2010).

PMI’s conclusion is that organizations would be wise to take the following steps to minimize risk:

1. Focus on talent development

2. Support standardization

3. Ensure alignment with organization strategy.

You can see the entire report on project performance at:


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