BENEFITS OF ADOPTING PROJECT MANAGEMENT APPROACHES

BENEFITS OF ADOPTING PROJECT
MANAGEMENT APPROACHES


Recent research and publications help in quantifying the benefits of project
management, including executive surveys of what they consider to be its
benefits.22 However, continuous improvement should be the norm; good
performance “on average” is not sufficient (see Figure 1-6).
The negative impact of not practicing effective methods of project
management includes the escalating costs of high-profile projects. The risk
is that the sponsoring organization does not achieve its desired goals despite
its investment in the project. Some analysts have suggested that a company’s
stock price can drop if a failed project becomes public news.23
Taking a systematic approach to managing projects creates a number
of benefits, regardless of the host organization’s particular emphasis on outcomes.
These benefits are:
■ Quicker completion. Quicker time-to-market delivery of rapid
development can make all the difference in the profitability of a
commercial product. It is said that one-third of the market goes to
the first entrant when a breakthrough product is introduced. In
some sectors, delays enact penalties.
■ More effective execution. When projects are formed to create a
desired product first, the project that delivers results on schedule
simultaneously may deliver large profits to the host company.
Other projects must meet exact requirements.

■ More reliable cost and schedule estimates. Making adequate
resources available when they are needed increases the likelihood
that a project will deliver benefits or services within budget and
resource constraints. Resources can be leveraged.
■ Reduced risk. For highly visible projects, such as shuttle launches
and space exploration, the potential loss of life is an unacceptable
political downside to a project that does not deliver. In not-for-profit
organizations, the losses associated with a failed project may
consume the resource contingencies of the whole organization or
make its reputation unacceptable to its member customers. The
organization’s actual existence—continuation of a whole organization—
can be at risk if losses exceed the organization’s capital
reserve.
■ Reduced cost. Maximizing schedules, linking dependent tasks, and
leveraging resources ultimately reduce waste, including wasted
time and effort on the part of the project team’s highly skilled and
trained staff.
A major benefit of adopting project management is that it raises
awareness of costs, complexities, risks, and benefits early in the process of
development, enabling sponsors to know where they stand in proceeding
with a given commitment and allowing action to reduce negative influences
so that the investment pays dividends and delivers on its promises.
The end result is that society gets benefits with the expenditure of fewer
resources.
What is ultimately needed is an environment where systems and
processes work together with knowledgeable and skilled professionals to
deliver on the promises of project management. While mature integration
has not yet been achieved, this new direction is well on its way.