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Article By: Alan Joch, is a business and technology writer who specializes in enterprise applications, cloud computing, mobile computing, and the Web.
It’s no secret that complex,
large-scale projects need close management controls to ensure that they’re
delivered on time and on budget. But now there’s growing evidence that failing
to meet these goals can have far-reaching consequences, not only for the reputations
and value of individual organizations but also for the tenure of their top
executives.
Government watchdogs forced one
large contractor to suspend a multibillion-dollar defense program—and delay
payment receipts—until a better management system was launched to more
accurately track spending, project milestones, and other fundamental metrics.
Significant delays in the opening of
the £4.3 billion Terminal 5 at Heathrow Airport impaired an airline’s
operations and contributed to a drop in its share prices.
These real-world examples are
noteworthy because of the huge financial risks they created. They’re also far
from being isolated cases. Research by the Economist Intelligence Unit found
that only 11 percent of companies claimed they delivered expected ROI on major
capital projects 90 percent of the time or more. In addition, 12 percent of
respondents said they achieved planned ROI less than half the time. According
to Phil Thornton, lead consultant at the analyst firm Clarity Economics, the
numbers demonstrate obvious challenges related to managing risks, accurately
predicting ROI, and consistently delivering bottom-line growth for major
capital investments
“Portfolio management is a path
to improve your organization’s competitive advantage. It helps make sure your organization is investing in the
right things and not spending its time on things that are not delivering the
intended results for the firm.”
Read the full article here
