Global IT Project Management Survey

I N F O R M AT I O N R I S K M A N A G E M E N T Global IT Project Management Survey How committed are you? A D V I S O RY The findings at a glance • Boards and executives are making increasing commitments to achieve business results through project outcomes. • These commitments are delivered through projects, and are often articulated as project benefits in a business case. • Both compliance and performance initiatives drove, and continue to drive, increases in project activity, budgets and complexity. • The success rate has marginally improved since our last international survey when defined by traditional on-time and on-budget measures, but the definition of success has evolved. The most popular definition of success now is meeting promised project benefits – in other words, keeping commitments. • Using this new benefits definition, project success is often a matter of interpretation. For the majority of survey participants, project success appears to equate to achieving an acceptable level of failure or minimizing lost benefits. • Project governance practices today tend to focus on making commitments, not keeping them. That is, executives are often involved in selecting and approving projects, but rarely involved in delivering them. • Inadequate benefits management processes are preventing the articulation of program and project success in the majority of cases. This creates a largely unquantifiable degree of benefits leakage. • For those that measure benefits, on average they are forfeiting up to one quarter of the promised business case benefits across their entire portfolio commitment. Summary • The top line gets punished as well, with customers often impacted by project failures. This amplifies the cost of failure. • While the discipline of project management is maturing in professionalism and profile, only a minority of organizations invest in project management capability development. • Increased success, or less failure, is achieved by adopting a range of good individual practices. However, a collective and systematic approach is required to substantially increase your success rate and help to minimize the loss of benefits. • Ultimately, integrated governance is the key to significant and sustainable success and delivering your commitments. Contents Executive summary 3 Introduction 6 Commitments for the future 7 What organizations are doing to keep 10 their commitments How well are commitments being kept? 17 Pathway to keep more commitments 23 Current practice overview 28 About KPMG 33 KPMG contacts 35 Acknowledgements This survey is a result of a significant investment of time and intellectual property on behalf of our valued member firm clients (clients). We greatly appreciate and thank all participants for their valuable contributions to our research. We are committed to conducting research regularly to develop further insights into trends for the benefits of our clients. 1 Global IT Project Management Survey Egidio Zarrella Global Partner in Charge, Information Risk Management KPMG’s Information Risk Management group is pleased to launch our 2005 Global IT Project Management Survey. Combining insights and trends from over 600 organizations internationally, with detailed analysis by our experienced project management practitioners, we believe our survey makes a significant contribution to project management research. With significant focus on governance and accountability, boards and stakeholders are, more than ever, results focused. Deploying scarce investment funds, boards, management, employees and third parties are expecting and demanding results. Organizations respond by making commitments – at every level. Projects are overwhelmingly the vehicle for executing these commitments, representing significant initiatives for any organization. As a result, the importance of making the right project commitments and keeping them is heightened. Across the global, project performance appears to be sub-standard. In other words, organizations do not appear to be delivering on their commitments. Project commitments are being sacrificed, the required value from project investments is not being achieved and consequently the discipline of project management is coming under scrutiny. We* trust that the insights contained in this survey provide useful guidance on the essential factors behind successful project management. * Throughout this document, ‘Our,’ ‘We’ and ‘KPMG’ refers to ‘KPMG’s Information Risk Management practice.’ Global IT Project Management Survey 2 Mark Tims Partner in Charge, IT Project Advisory, Asia Pacific The Asia Pacific region is being fuelled by various sourcing and shared services related initiatives, as well as from major ERP or core systems replacement programs. These projects are strategic in nature and impact most, if not all, parts of the organization. This heightened level of project activity puts more pressure on organizations in the Asia Pacific region to ‘get it right’. That is, build the capability, disciplines and accountabilities to deliver the value promised for the investment spend. This survey tells us that while, in general, organizations in the Asia Pacific region are on par with their international peers, there is much room for improvement. Bill Carr Partner in Charge, IT Project Advisory, Americas The Americas region recognizes the increased visibility of project management and realized project benefits to key corporate stakeholders. In fact, in today’s global market place if companies expect to realize the full benefits of their project spend, then solid project management processes are a fundamental requirement. Regulatory requirements in areas of security, privacy, corporate governance, financial reporting and reporting on internal controls are increasing the visibility of project management deficiencies at the board level. Companies are reacting to the pressures of global competition and new regulatory requirements with strategic initiatives that they cannot allow to fail. This survey identifies a number of better practices that can provide greater benefits realization to an organization as it continually assesses and prioritizes business initiatives to support future growth and improve internal performance. Walter Palk Partner in Charge, IT Project Advisory, Europe Middle East & Africa The volume and complexity of major projects and programs in Europe, Middle East & Africa have increased considerably in the last 12 months. These initiatives include both major IT system implementations, as well as increases in regulatory compliance programs such as International Financial Reporting Standards (IFRS) projects, compliance with the Sarbanes-Oxley Act of 2002 and the Basel II requirements. The Middle East, not surprisingly, is burgeoning with capital investment programs, many of which include large-scale IT spend, and many African countries are focusing on ‘capacity- building’ in both IT project and program management. All of this points to a great need to deliver on project management promises – something that is frequently not achieved. 3 Global IT Project Management Survey Executive summary Today’s business leaders are under increasing pressure to perform and make business commitments to boards, shareholders and customers. A big part of achieving (or not achieving) commitments rests with an organization’s ability to maximize the full potential of its technology project investment. Across the globe, organizations are depriving themselves of valuable returns on their project investments. Most are showing good intentions, however many are experiencing shortcomings, particularly around their ability to manage projects ‘through the lifecycle’. As a result, organizations are leaving expected benefits on the table.