The troubled global economy has forced companies big and small to reevaluate their project portfolios, zeroing in on those projects that bring real value and cutting everything else. “Companies aren’t just slashing the top 25 percent [of their portfolios], they want to cut right 25 percent—trimming the fat and focusing their emphasis on projects that support the business more efficiently,” says Margo Visitacion, analyst with Forrester Research, Marlton, New Jersey, USA.
We normally define project failure in terms of time, money and specification. A typical end-of-project report will state that the project was late, cost too much or failed to meet the users’ requirements. The National Audit Office reports on public sector projects that fail to meet these criteria.
The key point that I draw from both these articles, as well as from our own recent research on PMOs and Resource Management, is that the PMO is a powerful nexus of people and processes; companies that use this organizational structure wisely can invest wisely, cut costs wisely, preserve valuable resources wisely … and avoid the worst dislocations of recession.
Every organization wants to effectively execute strategies, but many struggle to implement a process for doing so. This struggle is one reason that the Balanced Scorecard has had such a wide following and impact on business. Simply put, the BSC emphasizes the linkage of measurement to strategy. For the first time, the details of the project portfolio (what the Balanced Scorecard creators call “strategic initiatives”) become important to a company’s strategic thinkers. Companies that have implemented this model have seen measurable bottom line successes, according to research by Scorecard creators Kaplan and Norton.