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Tips, advice, and information for South African business owners

19 Nov

Projects Don’t Do Business

Imagine wasting 29.1% of your budget on failed projects. For many companies with a poor project management capability, this is the reality according to Project Management Institute’s 2018 Pulse of the Profession survey. Compared with high-capability companies that “waste” only 1.4% of budget, the loss is alarming.

If you think this doesn’t affect you because you’re an executive or small business owner who doesn’t run projects, you’re wrong.

By the nature of your job, most of your work should be project-based even if you’re not thinking of your work as projectised. As the saying goes, “If you want different results, change what you’re doing.” For any business, whether change happens at strategic- or operational levels, it’s more likely to be successful – on-time, under-budget and deliver its objective – when it’s run as a project.

In the same Pulse report, a key cause of project failure is poor scope control – AKA scope creep – uncontrolled changes to what the project delivers. Interestingly, “poor scoping” is infamous for regularly showing up in the top-5 causes of failure year after year. I’m not at all surprised. As a practicing project manager, I can attest to scope management as one of the trickier aspects of project management. Keeping a tight rein over controlled scope changes involves a gazillion interdependent factors.

I can also vouch for a common misperception being a root cause of many scoping issues: the view that projects achieve business objectives.

As a general rule, business objectives are almost never directly achieved by projects. For example, higher revenue targets, producing more, or reducing costs, are business objectives that are achieved through ongoing operational activities.

Strategic projects, however, might change the business in a way that enables these business objectives to be realised. For example, by researching and launching a new product, we might be able to boost revenue. Or if we implement a project to expand our production capacity, this should make a higher output possible. Or if we install new systems that are cheaper to run, we could reduce our costs.

The specific distinction is that each project merely delivers a thing that makes it possible for the business to achieve its objectives. Take increasing revenue through a product launch as an example. The project might research and launch a new product into the market, including building the production line that will make that new product. The project will deliver only the new production line and a marketing campaign to activate the product. The project won’t make the product itself and it won’t advertise and sell the product. It’s up to the operations manager, not the PM, to actually use the new production line, make the product and sell enough of it to achieve the revenue target.

When you see the difference between your project deliverables and business objectives, managing scope change in your projects will be much easier. Do this and you’ll not only enjoy greater project success and better business, but you’ll have a lot more cash to do more business by not wasting 29.1% of your budget.

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