Thought Leaders

How Much Is Bad Project Management Costing Your Business?

broken failure

Project management is central to many industries and businesses. Timelines, stakeholders, KPIs, Gantt charts, and progress meetings comprise the daily lives of most managers, whether they are specifically ‘project managers’ or not.

When you consider how prevalent project management is in the world of business, you might question why all projects aren’t delivered on time and under budget.

However, it can be extremely challenging to accurately estimate the required resource, best approach and cost of a project.

Since projects are, by definition, unique in nature, and often hinge on a new product, service, or business update, it’s hard to predict the completion date and deliverables totally accurately.

As the size and complexity of the project grows, it can become incrementally harder to do this properly.

But beyond the headaches and time spent reading and re-reading spreadsheets, have you ever considered how much bad project management can impact your bottom line?

The cost of bad project management 

It’s estimated that $1 million is wasted every 20 seconds on project management tasks that can be automated. This adds up to a $438bn annual problem. (McKinsey, PWC, PMI).

This is a huge cost businesses cannot continue to bear the brunt of.

In addition to the financial cost, there is a human and emotional cost. Why would you want your workforce to be bogged down with menial tasks, devoid of inherent value? Machines can now automate so many of the tasks that humans previously had to undertake with mind-numbing repetition.

If you could free your staff to have more time for more creative thinking, more valuable and imaginative work, innovation and, crucially, happiness – why wouldn’t you?

A happy workforce is more productive, more likely to stay at your company longer and better to work with. It’s a win-win – so businesses should take the cost of unhappy employees into consideration as well as the financial burden of bad project management.

Why projects fail 

Dated work processes are usually the culprit and are a real strain on businesses. And with more of us working remotely, businesses inherently cannot operate the same way they did before.

Typical project management products are dated, but the proliferation of machine learning and AI is improving them.

Additionally, the need for skilled project managers is surpassing the rate the industry is able to train new workers.

At some point, the technology will need to take over – but this does not mean the death of the project manager role. Rather, we will see a new era of a more empowered, and creative project manager.

2020 showed us that project managers have to be prepared to lead both co-located and distributed teams. As remote work gained momentum in the coronavirus crisis, it led project managers to flex this skill and pay more attention to empowering teams in challenging times.

Remote team management has become a vital part of project management, calling on experts to move project communication from conference rooms to one central online location and seek better ways to monitor project progress regardless of the team’s location.

So how can companies improve project management – both from an efficiency and outcomes perspective?

How to up your project game

Before embarking on the use of a new tool, strategy or methodology – start with the objective first, and not just tech for tech’s sake.

There are thousands of tools out there for businesses of all sizes – not to the mention the many more project management methodologies that go alongside. But whether it’s a bespoke solution, or one out of the box – it has to be the right tool for the job.

While every project is different, there are some core skills written in stone that every manager or team should strive to nail – even as new tech and trends come and go.

Communication

90% of all project management work is about communication. Getting a good understanding of everyone’s expertise is essential to manage your team and push them towards the expected outcomes.

Working as a project manager will require much in terms of planning, time management, and productivity, so you won’t be able to hit goals without keeping communication lines open.

Time Management

To understand the true status of the project, project managers have to set up the right time registration discipline and know where their team’s time is going. Even the best teams require help to meet deadlines from time to time.

Using various tools like dashboards, calendars, timesheets, and monitoring the project life cycle, will create transparency, accountability, and ownership.

Task Management

No project has ever been brought to life without proper task management in place. Effective task management makes sure everyone knows the same news and facilitates work navigation.

Using to-do lists with task cards will help capture key information about the tasks, such as roles, descriptions, deadlines, and dependencies, and keep your team focused.

The sooner project management starts being perceived as a crucial discipline that cuts across verticals, the better. For your teams – and your bottom line.

Dennis Kayser is CEO and co-founder of Forecast.

Dennis Kayser
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