Success in project management has been traditionally associated with the ability of the Project Manager to deliver in scope, time, cost, and quality, commonly referred to as the 'iron triangle'.
However, projects whose success is limited to the 'iron triangle' metrics, tend to fail more often, along with the Project Management Offices overseeing them. The iron triangle, although quantifiable and trackable, fails to provide a true depiction of a project’s health and does not allow for a clear understanding of true project value or the wider impacts a project has on an organisation.
It is therefore relevant to consider alternative measures that provide more holistic information to be able to assess and identify the real impact of a project in the current economic climate of frequently changing demands.
The Project Management Institute (PMI), the world’s leading authority on project management, and PwC, have teamed up to address how success is being measured within project-based organisations. To explore the issue further, in 2021 they conducted a global survey involving over 4,000 individuals who lead or facilitate the delivery of projects, programs and portfolios and stem from a vast range of education backgrounds.
From the total sample of interviewees, the Project Management Office (PMO) maturity index highlighted a group of 230 PMOs which comprise the top 10% of organisations which are bringing in a greater variety of success measures. They are using technology to increase the number and variety of metrics, as well as the frequency of measurement. It has been revealed that these organisations make use of 10 project success measures on average, whereas other organisations make use of only 7 (on average), indicating that innovation in measurement is a key feature of PMO maturity, which translates to organisation success.
The Top 10 Percent organisations outperformed other organisations in measures such as: ‘revenue’, ‘customer satisfaction and acquisition’ and ‘Environmental, Social, and Governance (ESG)’ indicators.
Although fundamental to measuring project impact, time, scope and budget do not evidence real change created by project outcomes. Additional measures such as societal impact, environmental impact, and return on investment, should be used to tell a compelling story about the project’s performance.
Whilst the traditional iron triangle measures create the perception that project management relates to ‘scheduling’, research shows that in high functioning organisations with successful PMOs and associated projects, project managers are seen as ‘changemakers’, ‘essential’ and ‘realising vision’; highlighting the importance of adaptability in success.
The two aspects to consider which underpin effectiveness are:
Measures being developed without involving the necessary stakeholders may lead to disjointed or conflicting priorities, and the employment of metrics which fail to align with the organisation's strategic vision. Top performing organisations involve a greater variety of stakeholders in coming up with their measures, including; customers, consultants and external stakeholders, ensuring that metrics focus on outcomes that truly matter.
Strategy execution management technology is helping organisations capture more metrics beyond the iron triangle. On average, those using technology tend to capture about 1.8 metrics more. Organisations which have invested in such technology have experienced notable benefits including:
the easy tracking of project performance of remote projects;
improved ESG indicators;
superior customer satisfaction metrics;
lower customer acquisition levels; and
overall improved performance in terms of revenue.
The improvements highlighted above have resulted in 73% of the Top 10 percent organisations recognising an improvement in communication and transparency around projects over the last 12 months. Tracking these broader metrics can also be associated with the achievement of wider organisational strategic targets, adding further strategic value when reporting project performance, and increasing the visibility of evolving PMO maturity levels. Furthermore, given the increased shift towards a hybrid or remote working set-up, the need and importance of such metrics and technology is repeatedly highlighted.
With the previous sections having shed light on the importance of diversifying the measures and metrics used in Project Management, it is clear that high performing organisations take project success metrics seriously. To bring this into your organisation, you can start off by understanding what works for your organisation.
Enhance the conversation of project and PMO success with outcome-based metrics. Collaborate across the organisation to develop new measures that matter and shift the project manager’s role from a scheduler to a changemaker.
Identify metrics that matter for the project to improve collaboration between the PMO and C-suite. Set collaborative workshops early on and involve a greater variety of stakeholders to identify project specific metrics. Reflect on the effectiveness of measures for each project and keep in mind that metrics may change as the organisation’s needs change.
Consider investing in technology. Organisations that are making use of technology are seen to report better business performance and are likely to benefit from increased competitive advantages. Strategy execution management technology and benefit realisation tools allow for a greater number of metrics to be used. This results in a more holistic view to be presented to key stakeholders and therefore more informed decision making.
There is no question regarding the value that can be derived from a PMO, however it is essential that the right metrics are developed to fully realise the potential value. As a result, PMOs that are responsive to change and utilise a range of measurement tools have proven to be more successful than those who do not. They will enhance an organisation's strategic alignment, facilitate capacity building, support in identifying opportunities throughout the project and assist in realising the intended project objectives.