Measurement is key to demonstrating the impact and value of projects. Measurement provides project visibility and delivers the data to strengthen the future business case for a program or project management office (PMO). However, if project success is limited to the “iron triangle” metrics of scope, schedule, and cost, it often condemns projects (and the PMOs overseeing them) to being “red flagged” as a poor return on investment for organizations. But what if PMOs change the way projects are perceived by emphasizing outcome-based benefits such as operational efficiencies or customer satisfaction?
Project Management Institute (PMI), the world’s leading authority on project management, and professional services firm PwC have teamed up to address how success being measured by project-based organizations impacts PMOs. Our global research indicates that innovation in measurement is a key feature of PMO maturity. Our PMO maturity index highlights a group of 230 PMOs which make up the top 10% of organizations— called the “Top 10 Percent” in this report— which are bringing in a greater variety of measures and using technology to increase the number and variety of metrics and the frequency of measurement. The Top 10 Percent organizations outperformed organizations overall in 2020 in revenue, customer satisfaction, and acquisition (see Figure 1) and Environmental, Social, and Governance (ESG) indicators.
The report also highlights what PMOs can do to reimagine their approach to measurement, which will help to increase the visibility of evolving maturity levels and increase the perceived value and impact of PMOs and project managers across organizations.
When projects come into existence, the planning process undoubtedly starts with what needs to be done, when it will be done and how much it will cost. These dimensions frequently form the foundation for tracking progress and reflecting on project success as well. The iron triangle (see Figure 2) is easy to understand, quantifiable, and trackable. However, what it doesn’t do is provide a robust evidence base for the wider impact of projects. The conversation about project outcomes, which happens during the planning process, needs to start driving measurement at project initiation—not afterward. The ability to link performance metrics to outcomes from start to finish is critical in positioning PMOs as valued contributors to strategy delivery.
The Top 10 Percent organizations are more likely to be aligning key performance indicators (KPIs) to wider organizational strategy, communicating the impacts of projects, and making the most effort to improve the line of sight for the C-suite (and engage them in the PMO) during the COVID-19 pandemic (see Figure 3). We believe that this is driving a more outcome-focused approach to measurement. Our research confirms these organizations have a more innovative approach to measurement using more metrics and technology. In order to qualify in the Top 10 Percent, we know they are also more likely than not, to be communicating the impacts of projects and aligning KPIs to wider organizational strategy. That said, there is still more to be done even by the Top 10 Percent to improve the approach to measurement and the use of technology to facilitate measurement.
Our research identifies these four key approaches to improving how the impacts of projects and programs are measured:
In our global survey, only 12 project professionals out of 4,069 told us that their organization had no formal metrics in place to monitor the success of projects. The rest, on average, had 7.1 metrics in place for every project—but of these, typically four were linked to the iron triangle (see Figure 4). Therefore, only three additional measures were being used to tell a compelling story of project success. To amplify the impact of projects, and by extension the PMO, additional measures such as societal or environmental impact or return on investment must be the headline act. Being on time, in scope and on budget are the basics; they do not evidence the real change in outcomes that projects can provide.
Overreliance on the iron triangle is also affecting the image of project managers. When participants in our global survey were asked to describe how those outside of the profession would describe project managers, scheduler was the second most frequent word used, selected by 54%. However, among those in the Top 10 Percent, scheduler was just one of many descriptors used to the same degree to describe project managers. In addition, many more participants in the Top 10 Percent used words like changemakers, essential, and realizing visions to describe project managers, compared to organizations overall. This suggests that increasing the scope of measures can also influence the perceived value of project management capabilities and help combat the talent crisis.
The frequency of measurement also poses a challenge. Our findings showed that only 41% of PMOs were consistently measuring and reviewing their performance, and that just over half were regularly communicating project milestones and impacts to the C-suite. Both of these elements are key to improving PMO maturity in our index—using measurements to assess the performance of projects and PMOs has to be done on a regular basis.
Source: PMI and PwC Global Survey on Transformation and Project Management 2021.