7 Common Mistakes in Project Performance Management & How To Avoid Them
Numerous project applications, approvals, budget and resource allocations, and the monitoring of the success of projects and portfolios regularly push program managers to their limits.
I summarize seven common mistakes in program management and show how they can be avoided, with examples. With a flexible, well-thought-out tool, you not only reduce costs and time expenditure but also get an effortless overview of all projects and portfolios.
1. Missing a single source of truth
Many companies work with Excel files in their program management. Countless employees manually merge different versions of the files they collect. Due to the complex and error-prone processes, the reliability of the statements based on this data is limited. Management then struggles with the limited reliability, which impacts all aspects of planning.
The solution lies in fully integrated data. To improve confidence in your organization’s data, it is necessary to consolidate all relevant information from the entire organization and make it accessible to all involved. By linking procurement, order, personnel and capacity planning data, managers can access current and precise figures to make informed decisions. This is also known as single source of truth (SSOT).
For seamless data integration and connection of all upstream systems, a modern software solution that can be flexibly adapted to the requirements of the respective organization is recommended. Modern program management and portfolio optimization solutions prevent siloed solutions and allow modular expansion up to fully integrated enterprise planning. Key stakeholders see the expandability of standardized and field-tested modules as a great advantage. User reports from the field show a comprehensive cost and time saving potential when using a modern solution.
2. Framework conditions and guidelines are missing or poorly defined
The justification of project rejections and approvals must be based on well-defined framework conditions and guidelines. Research provides meaningful structures such as PMI, PMBOK or Prince2.
Define key information for project proposals, such as strategic relevance in line with corporate goals, budget, resources, and schedule as necessary for project submission. A lack of comparability leads to lengthened processes and decisions that are difficult to defend.
Best-practice program management solutions automatically apply recognized project management and controlling standards. For example, only projects that meet predefined criteria can be submitted and then go through a defined approval process (such as a second set of eyes above a certain budget level). The assignment to specific project clusters and the frequency of project status checks can also ideally be made dependent on the specifications of the respective standards.
3. Inadequate prioritization of projects or lack of allocation to portfolios
Managing many projects simultaneously requires careful planning and allocation of resources according to the strategic goals of the organizations. Make well-founded, objective decisions using defined, weighted criteria such as contribution margin, strategic relevance, project costs, risk, or opportunity costs.
In leading program management solutions, flexibly adaptable scoring systems can be used for project prioritization. Figure 1 provides an overview of portfolio balancing according to selected criteria. This ensures traceability for project approvals and project prioritization. The allocation of projects to specific clusters/portfolios allows for a clear classification.
4. Rigid deadlines for the evaluation of project progress and success
Usually, fixed points in time are defined for projects to monitor and evaluate the success of the project, e.g. after certain milestones or shortly before the end of the project. This is where the mistake lies, as unforeseen events can have a massive impact on the success of the project, which is why their immediate adjustment is vital.
Continuous control of the project and portfolio during the entire project life cycle decreases the likelihood of unpleasant surprises. By means of project performance management (with some of the goals aligning with program management), first the project pipeline, then the project status, costs, required resources, and risks are continuously monitored and a comprehensive overview of all projects and portfolios of the company is provided (see Figure 2).
Methods such as drill-down, ad-hoc analyses, milestone trend analyses, earned value analyses, rolling cost planning and, above all, what-if simulations are helpful for decision-making. It should be possible to call up the status of projects at any time.
5. Failing to effectively address resource bottlenecks
Many of the organizations we talk to about resource management consider the allocation of resources to employees with the right skills for project success to be both highly relevant and highly complex. Often there are bottlenecks in certain skills that different departments fight over. The regular re-allocation of employees with the appropriate know-how from projects with less strategic relevance to the organization to those with high importance is standard practice.
A program management tool supports you in making allocation decisions that are also aligned with the strategic goals of the organization and project dependencies. A suitable solution provides an overview of the skills and resources required for projects in the future (e.g. for the next 2 years). In this way, you make skills that are in particularly high demand available to a greater extent through further training measures or hiring campaigns. This allows you to plan required external resources or personnel releases early on. An appropriate solution can detect bottlenecks and automatically initiate coordination processes. This helps management to react more quickly.
This principle of early identification of impending bottlenecks or resource conflicts can be easily applied to other resources such as production equipment, goods to be procured, etc.
6. Lack of communication between stakeholders
Several departments are usually involved in a project within the organization. Internal company projects and coordination with affiliated companies, suppliers, or customers that go beyond this require regular, structured information exchanges. While face-to-face meetings are useful, but not always possible, (as is now the case with the global pandemic) communication tools such as Microsoft Teams, Planner or Project are often the next best choice.
The seamless integration of these tools into a project management solution allows clear task assignment and online collaboration (e.g. live chat via Teams) of the persons involved. Deadlines and traceable task packages ensure successful coordination, and all participants work in the same system and with the same data. Persons without appropriate project management training, such as technicians or scientists, have no problem dealing with such systems. An always up-to-date, standardized project status report at the push of a button supports communication and saves time in preparation. Capacity utilization previews and (rolling) cost forecasts are an integral part of the report.
7. Not using proven templates: Making the same mistakes repeatedly
Why not learn from mistakes and prevent their repetition by documenting them? A modern project-controlling solution ensures the possibility of a standardized, clear recording of project experiences and secure access for all participants. Lessons learned after project completion as well as the use of well-functioning templates of completed projects in one system increase efficiency and reduce errors. Project post-calculation allows major deviations from the original plan to be identified and recommendations for future similar projects to be derived.
Summary: How to avoid 7 common mistakes in project performance management
- Use a single source of truth as a data basis for reliable decisions. The project performance management solution should be seamlessly integrated into the business planning in order to have maximum flexibility for extensions.
- Monitor projects and portfolios continuously and not just in fixed time periods.
- Use standardized, predefined criteria for project awards and decisions.
- Benefit from established analyses, such as milestone trend analyses and scenario simulations.
- See the big picture of all projects and portfolios in a single graph.
- Communicate efficiently in one system with access for all participants.
- Utilize a learning and template system
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