Why Better Project Management Matters

by Douglas M. Arnstein, PMP, President, Absolute Consulting Group, Inc.

The Value Proposition of Project Management
The last 50 years have seen an explosion in the practice of project management.
Professional association membership has grown significantly worldwide. Project
management methods and practices have spread far beyond the industries and
organizations that are commonly associated with its origins; engineering and
construction, aerospace, automotive, and military applications. In many
organizations today, one finds project management being used in information
systems development, new product development, software integration, and
infrastructure upgrades among numerous other areas.
Much has been said and written about the promise of project management, yet hard
research has lagged behind the survey-oriented results that highlight the perception
that project management benefits organizations. Although this message is generally
believed to have made it to the ranks of senior management, one would be hard
pressed to find a C-level executive who has seen the value of project management
demonstrated. Therein lies the rub. Clearly there is a gap between perception and
reality. The good news is that there is hard research that demonstrates the value of
project management. The remaining challenge is to convince organizations to look at
project management in a different light.
Project management faces a perception problem. Part of it is self-inflicted by the
professional associations whose members are the true believers. The focus of these
associations is the promotion of project management as if it were in a vacuum. This
is possibly the biggest mistake these organizations make. Ultimately there is nothing
wrong with defining and promoting the attributes, methods, and practices of project
management. To submit that project management is a profession and is the goal and
objective in and of itself misses the point entirely. To understand this, one need only
look at the cottage industries that have grown around the professional associations.
These include certification training, project management consultants, professional
development focused on the project management practice, and educational
institution assimilation of the project management discipline as witnessed by the
growth of degree programs in project management. What 90% of these lack is any
recognition that project management is a tool to be used for the benefit of deriving
business and organizational value. Plain and simple, project management is an
operational practice; the means to an end. Practiced well, it leads to value; practiced
poorly it does virtually nothing except give itself a bad name.
The Human Factor
This raises the issue of the human factor. Project management is nothing more than
a construct with methods and practices that support it. The difference between doing
it well and doing it poorly therefore must lie with the practitioners, those who
manage the practitioners, and the organizational support provided to project
management within an organization. Were this not true, every organization that
practices project management would realize similar benefits. We know this is not the

case. If we look at the differences between how a manufacturing company

implements engineering-driven machinery development, how a bank implements
financial market-driven operational processes, and how most organizations
implement human-driven project management, some interesting dynamics surface.
The discipline required to develop a machine to produce a specific part for a
manufacturing process has no tolerance for error. It is design and specification driven
requiring a precision in planning, design, development, quality assurance, and quality
control that ultimately drives the organizations ability to achieve its business goals
and stay in business. Likewise in a banks trade finance operations department, an
import letter of credit (LC) clerk is trained to collect the right data from the applicant
and determine the applicants credit worthiness prior to booking the letter of credit.
Other clerks are responsible for approving the LC as assurance that appropriate
controls are in place to prevent fraud, and yet other clerks are responsible for
checking shipping discrepancies once the LC has been presented for payment. These
workers are constantly measured and evaluated on their accuracy and number of
errors made because in this operational environment errors equal losses of money
and/or customer good will. Neither are an acceptable outcome to a bank and they
manage the process accordingly. Both examples above focus on organizational
discipline: the first in a one-time project environment and the second in an on-going
operations environment.
Compare those two situations with the hypothetically haphazard deployment of
project management within these same organizations. Experience shows that
different methods and practices are probably conducted within different internal
divisions and departments. Individual project managers most likely do things
differently exhibiting varying degrees of expertise and skill that are not necessarily
aligned with the project to which they have been assigned. Staffing is often based on
New project? Who is available, or worse yet, Who has the bandwidth to take this
on? This is in spite of the tremendous amount of behavioral research linking project
failures with project complexity and staffing practices among other things.
Problematically, many organizations appear to be complacent about the situation
figuring that they implemented a project management office and a project
management methodology, now all that they have to do is sit back and watch the
benefits flow in. Wrong. What is missing is that more focus needs to be put on
project management as an operational competency.
Project Management as Operational Competency
Success in supporting project management as an operational function requires two
things:
1. an understanding that project management is a tool, and
2. implementing organization-wide discipline related to the management and
practice of the tool. The tool exists for the benefit of providing value to the
organization. Used correctly, the tool can provide improved product time-tomarket resulting in quicker revenue realization, better project cost and
schedule performance leading to greater portfolio predictability and reliability,
and more project value delivered for equal or lower cost.

What it takes to do so is for organizations to implement the same discipline and

precision in planning, executing, quality control, measurement, and evaluation that
they do as a matter of course in other areas as noted above. This is nothing more
than good management. If it were done more effectively than it is now, organizations
would not look to cut project managers first when financial times get tough and they
need to cut costs as happened during the economic downturn of 2001-2003. This
was a disturbing and too common practice that senior managers at numerous
organizations exhibited during this period because project management is not viewed
as operationally important, but as an expendable nice-to-have.
The key to turning project management into a core operational competency involves
benchmarking. As mentioned in the opening paragraph, there is existing hard
research that identifies the benefits of project management. Conducted by Dr.
William Ibbs and Justin Reginato of the University of California at Berkeley and Dr.
Young Hoon Kwak of George Washington University, the research indicates a
correlation between project management maturity and organizational financial
results. Based on the collection of various project management costs, a project
management maturity assessment, and project portfolio metrics for cost and
schedule performance, the benchmarking is able to target specific practices within
the project phases and knowledge areas that would lead an organization to higher
maturity and improved performance focused on business results. The data has
become so robust over the years that it is now possible to draw projections for PM
ROISM based on an organizations current assessed level and a realistic projected
target level to be achieved by addressing the identified areas for improvement.
The Benefits of Benchmarking
Even more compelling is that several organizations have been re-assessed a couple
of years after implementing the recommendations for improvement highlighted by
the data from the original assessment. In one case, improvements included faster
time-to-market, project manager staffing ratios that reduced the cost of delivering
business value by over 40% annually, and greater project portfolio predictability
leading to higher project throughput which means more business value delivered.
The concept behind rigorous benchmarking is that the assessment collects data and
reports results; the data represents information regarding which project
management methods and practices could be improved; addressing the areas for
improvement leads to PM maturity; PM maturity leads to integrated and sustained
performance which drives business financial benefit. Ultimately, the results
referenced above were driven by discipline; discipline in analyzing where the
significant deficiencies were; discipline in applying methods and practices to address
or eliminate those deficiencies, discipline in measuring performance; and discipline in
eliminating the human factor to the extent possible through training, best practices,
and organizational commitment and support to improving the operational process
known as project management.
Why Good Project Management Matters
This then is the proof as to why getting better at project management matters. The
short answer is simple and sweet; operational competencies lead to bottom line
financial results and project management is one such competency. Given todays
business mantra of Do more with less, one sees the many opportunities available to

organizations to make this happen. The data is there; the path to improvement is
there; the results are there. Project management should be viewed as an operational
competency; nothing more, nothing less. That said, with the appropriate level of
discipline in its implementation, it is a powerful tool capable of great potential. Better
project management matters.