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If you have ever wondered where the value goes on projects? Why, regardless of the rigour of the business case and financial analytics, the results fail to meet expectations and the benefits are … well where did they go?

Our research over the past 20 years has found that today’s largely cost control driven approaches to project delivery result in projects losing more value than they deliver. Our figures are derived from research by the author at BCG and Capability Management and confirms research findings from Standish, AD Little, Deloitte, Gartner and others.

Cumulatively, bit-by-bit during a project, value is missed, lost or destroyed, and/or costs increased. Much of this value loss has been invisible and therefore has not been addressed or managed. It is not uncommon for 60% of the available to be lost and the costs to simultaneously increase by 60%. Frighteningly, these results have not improved in many years (The 1991 AD Little and 2004 Standish studies on project success are remarkably similar in results).

Yet the cost of the current level of project failure is phenomenal. Research (R. Young, “What is the ROI for IT Project Governance? Establishing a benchmark.” 
in 2006 IT Governance International Conference (Auckland, New Zealand, 2006)) on just the IT projects commissioned in Australia found that improving project delivery performance could increase the banked returns from 30% to 240%, an eight times increase in returns. Even if you only attained half of this increase, you’ll have moved from 30% to 135% returns — a prize still well worth pursuing (This degree of improvement is more consistent with our own research and level 4 capability results achieved).

All of these poor project delivery performance statistics just emphasize the size of the prize available. And that ignoring these statistics is expensive — very expensive!

And yet poor project performance is allowed to continue. This does not need to be the case.

By identifying where and how value is lost and costs increase, we put you in a position to manage your projects’ value. Simple steps can help you avoid significant value loss and increase the delivered value to your organization – often with less effort and in less time.

Project value loss is caused by inadequate organizational project delivery capability. To increase your organization’s capability to successfully deliver projects entails more than just improving project management skills. It requires a holistic, value driven approach whereby every project delivery element is focused on delivering maximum value.

But the first step is to recognise the need – to understand that there is significant value loss on most projects – and to understand where the value is being lost and why.

And then take action.

In the following few weeks we’ll explain the main causes of value loss and cost gain.