Project Portfolio Management: Three Dangerous Myths

CIO - The Standish Group's "CHAOS Summary 2009" report shows a marked decrease in IT project success rates, with 32 percent of all projects succeeding. It's one thing to know that 68 percent of all IT projects don't succeed. But it's another to look across your company and realize you have no way of knowing which of your projects might be in the 68 percent bucket and which have the potential to be in the 32 percent bucket.

Project Portfolio Management is gaining respect for effecting successful project outcomes, creating a discipline of informed, confident decision-making and better stewardship over scarce resources.

Project Management Definition and Solutions

But there are many who come to PPM with high hopes, big investments, and end up disappointed and discouraged. In our experience, three persistent myths about PPM are to blame.

Myth 1: PPM is IT's Lookout

It is estimated that Fortune 500 companies have half to three-quarters of their top strategic initiatives tied up in projects, yet CEOs are often unaware of their progress, uncertain of their objectives, and unengaged in their challenges. Why? Because the project has been, you might say, "outsourced" to IT. There are reasons, of course. IT supplies the resources for the project, and there may be a new technology tool involved.

Recession Causes Rising IT Project Failure Rates

Defining a PPM rollout involves strategic questions often outside IT's purview. What are all the company projects under way or in the queue? Are they projects the company should be doing? How does each relate to its strategic initiatives? How are they prioritized? Budgeted? Resourced? Which business lines are profiting by them, and which are not? How does management obtain insights into their progress?

PPM is, ultimately, a new enterprise management capability for strategic priorities and governance, not a technology rollout. Successful PPM engages the enterprise at the top and across the business lines. It belongs to the businesses whose objectives are being served; delegating it to IT curtails its chances.

Myth 2: The Right Tool Drives PPM Success

In our world of amazing technology, it is a beguiling message that accompanies almost every ambition: "There's an app for it. It's all in the tool." Sometimes a similar mindset prevails when a company decides to get serious about managing its portfolio of projects. After all, they need to capture reams of data from many sources and see it updated and reported regularly. There's no doubt that plugging in a smart tool is easier than addressing vast process and culture issues.

So for some, the first step toward PPM is a determined effort to buy and install "the best PPM tool available." Then reality sets in. They don't have the data it needs and no process for getting it. They meet widespread resistance to changing processes to suit the tool's needs. The tool is better at reporting past project activity than delivering insights about what remains to be accomplished. Ultimately, they find themselves little better at managing the array of costly projects than they were before.