Inaugural Lecture
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The document discusses the challenges and failures in project, program, and portfolio management (3PM) and their impact on economic growth and poverty alleviation in Africa, particularly in light of the global financial crisis. It highlights various significant project failures and the necessity for improved management practices, including strategic alignment, understanding user needs, and effective communication. Additionally, it presents statistical data on project success rates over time and emphasizes the importance of measuring project benefits and alignment with organizational objectives.
Inaugural Lecture
- 1. Les Labuschagne Inaugural Lecture 17 March 2011 Open Rubric
- 3. Mission Strategic Strategic Objectives level Operationalising Management of the Strategy of Portfolio Management of Management of Operational Plans Programmes Tactical level Managing day-to-day Management of Projects activities Perform operations activities Perform project activities Operational level ORGANISATIONAL RESOURCES
- 4. Africa • 1 billion people (2009) in 61 territories • 14.72% of the world's human population Global financial crisis • Growth declining from 5.0% in 2008 to 1.6% in 2009 • Impact : 20m more people in Africa will be in extreme poverty in 2015 World Bank Assistance • Total lending rose to $11.4 billion • Largest single loan made was a $3.75 billion to Eskom Holdings Ltd., The World Bank Annual Report 2010 – The World Bank
- 6. FIFA World Cup 2010 Gautrain (R24.5 billion), (R25.9 billion), Cape Town International Airport (R1,6 billion) King Ushaka International Airport (R6,8 billion)
- 7. o LSE Breaks Down Biggest Failure in 8 Years o September 8, 2008 – System broke down on the day European equities posted their biggest gain in 5 months, hurting clients who trade an average $17.5bn a day o Overstock.com's 4 Year ERP Nightmare o October 8, 2008 - The $14.2m loss was further exacerbated by a customer service meltdown related to the hurried ERP rollout o eNatis o 2007 - The Department of Transport’s R311m nationwide licensing system unable to register new and pre-owned vehicles leading to lost revenue o Sainsbury's $526m Project Failure o October 2005 - Giant British food retailer had to write off $526m it had invested in an automated Supply-Chain Management system http://www.lessons-from-history.com/node/89
- 8. o FBI Virtual Case File project o 2005 - US Justice Department Inspector General report stated $170m project was a failure o UK IRS o 2005 - the UK Inland Revenue produced tax payment overpayments of $3.45bn because of software errors o Canadian Government welfare management system o July 2004 - A new system costing $200m was unable to handle a simple benefits rate increase o AVIS ERP o 2004 - Avis cancelled an ERP project after $54.5m is spent o Pathway project o 2002 - the UK government wasted £698m on a smartcards for benefits payments project
- 9. 60% • Hollywood movies 60% • Mergers and acquisitions 80% • Food products 80% • Venture capital investments (Slywotzky & Weber, 2007):
- 10. Goal • Investigate the practice of 3PM (project-, program- & portfolio management) in order to develop an understanding of its causality Impact • An improved understanding can lead to the development of improved 3PM practices leading to the optimisation of results • This will directly impact economic growth and poverty alleviation
- 12. 60% 50% 40% 30% 20% 10% 0% Prosperus 2002 Prosperus 2008 Prosperus 2010 Successful 43% 37% 59% Challenged 35% 36% 29% Failed 22% 27% 12%
- 13. 60% 50% 40% 30% 20% 10% 0% Prosperus 2002 Prosperus 2008 Prosperus 2010 Successful 43% 37% 59% Challenged 35% 36% 29% Failed 22% 27% 12%
- 14. 60% 50% 40% 30% 20% 10% 0% Prosperus 2002 Prosperus 2008 Prosperus 2010 Successful 43% 37% 59% Challenged 35% 36% 29% Failed 22% 27% 12%
- 15. 70% 60% 50% 40% 30% 20% 10% 0% CHAOS CHAOS CHAOS CHAOS Prosperus CHAOS CHAOS CHAOS Prosperus CHAOS Prosperus 1994 1996 1998 2000 2002 2002 2004 2006 2008 2008 2010 Successful 16% 27% 26% 28% 43% 34% 29% 35% 37% 32% 59% Challenged 53% 33% 46% 49% 35% 51% 53% 46% 36% 44% 29% Failed 31% 40% 28% 23% 22% 15% 18% 19% 27% 24% 12%
- 16. 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 .0 Maturity Level 1 Maturity Level 2 Maturity Level 3 Maturity Level 4 Maturity Level 5 2010 8.5 24.9 32.2 23.9 9.1 2008 5.3 27.7 39.3 20.4 7.3 2003 4.4 28.6 36 24.4 6.6
- 17. Maturity Level 1 Maturity Level 2 Maturity Level 3 Maturity Level 4 Maturity Level 5
- 18. 4.00 3.50 3.00 2.50 Axis Title 2.00 1.50 1.00 0.50 0.00 Integration Scope Time Cost Quality HR Communica Risk Procureme Mean value tions nt 2010 3.21 3.16 3.13 3.05 2.99 2.99 3.14 2.91 3.26 3.09 2008 3.75 3.71 3.79 3.61 3.44 3.61 3.65 3.38 3.59 3.61 2003 3.02 3.12 2.99 2.94 2.82 2.87 2.93 2.65 2.99 2.93
- 19. 4 3 2 1 2003 2008 0 -1 2010 Average Perceived Average Actual Difference 2010 3 3.09 0.09 2008 2.97 3.61 0.64 2003 3 2.93 -0.07
- 20. SUCCESS CHALLENGED FAILED FACTORS Somewhat Very Somewhat Very Somewhat Very important Important important Important important Important Support of innovative technology 30.5 17.9 10.0 6.5 8.2 6.0 Executive support 36.4 32.2 13.4 11.8 13.6 11.1 Clarity of organisational objectives 37.2 37.1 13.2 11.9 13.9 11.1 Understanding of user’s needs 41.6 33.8 10.6 11.0 10.8 8.7 Requirements definition 40.0 35.8 14.9 13.8 12.1 10.0 Communication between team & customers 41.2 37.6 16.9 9.6 14.2 9.7 Communication between project team members 43.4 35.7 12.4 8.4 8.5 8.6 Project manager competency 40.9 32.9 9.6 7.0 9.1 6.7 User understanding of technology 29.7 21.5 14.1 8.5 9.8 6.7 User involvement 36.3 26.3 11.9 11.0 10.5 8.9 Handling of change 36.0 28.8 16.0 11.0 12.4 9.5 Change control processes 35.4 24.5 12.8 7.4 8.9 7.9 Formal methodologies 33.5 23.7 10.8 7.1 8.6 7.7 Auditing of processes 28.5 18.2 8.0 5.6 6.3 3.7
- 21. Direction Direction SUCCESS CHALLENGED People Processes People Processes Direction FAILED People Processes
- 23. Strategic level Tactical level Operational level
- 24. Representing the needs of the permanent organisation Representing the needs of the temporary organisation
- 25. Representing the needs of the permanent organisation Representing the needs of the temporary organisation
- 26. Representing the needs of the permanent organisation Representing the needs of the temporary organisation
- 28. No. Hypothesis Finding H1 Strategic objectives guide the conceptualization and selection of initiatives and/or projects H2 The benefits associated with a project are major determinants in its selection and funding H3 Benefits are determined and quantified before the start of all projects H4 Benefits are tracked and measured after completion of projects H5 Project success is measured against the benefits that were realized
- 29. Different interpretations of project success • Management of the project • Ability of the project deliverable to satisfy needs • Triple / Quadruple constraints Linking project outcome to strategic objectives • Projects contribute to strategic intent, even if not measured quantitatively Programme and benefits management processes • Organisations were achieving strategic objectives and were therefore successful despite absence of processes
- 31. Vision Strategy Map (Translate Vision into Strategies) Strategies Portfolio Portfolio Measure Strategy against Portfolio Management Strategy Map (Translate Balanced Scorecard (Link Strategies into Business Measurements & Targets Measure Business Objectives Programmes Programme against Programmes Objectives) to Business Objectives) Management Business Objectives Projects / Action with Measurements & Measure Measurement & Targets Project against Projects Plans Targets Management Requirements Management
- 34. Best Practice vs. Real Practice Dream vs. Philosophy vs. Reality Science Conventional Wisdom vs. Unconventional Wisdom
- 35. o If you know the enemy (projects) and know yourself (3PM), you need not fear the result of a hundred battles. o If you know yourself (3PM) but not the enemy (projects), for every victory gained you will also suffer a defeat. o If you know neither the enemy (projects) nor yourself (3PM), you will succumb in every battle.