KPMG advocates programme management offices

Compared with the rest of the world, fewer organisations in the Asia-Pacific region, including New Zealand, have adopted the concept of the programme management office, says a report by accounting and consultancy practice KPMG.

Compared with the rest of the world, fewer organisations in the Asia-Pacific region, including New Zealand, have adopted the concept of the programme management office (PMO), says a report by accounting and consultancy practice KPMG.

And they could well be paying for it in elevated business project failure rates, the firm says.

KPMG sees the PMO as an essential part of aligning projects, including IT projects, with overall business strategy, and ensuring they reach an outcome that helps achieve that strategy. It claims the presence of a well-functioning PMO is significantly correlated with the likelihood of project success.

“IT projects are well known for poor success rates,” says KPMG New Zealand partner for information risk management, Graeme Sinclair, saying “between 50% and 75%” of all such projects fail.

Over projects in general, 66% of New Zealand companies questioned in KPMG’s survey had had a project failure in the previous 12 months. This compares with 59% in the Asia-Pacific region and 56% in the world as a whole.

“Technology projects are about changing the way a business operates,” Sinclair says. “Businesses are faced with the challenge of ensuring that key people at all levels are involved and that participation rates are high.”

New Zealand could be falling down on that participation by prospective users and definers of the system. One of the biggest variances in the report is in the functions seen as appropriate to a PMO. Business requirements planning is included by only 17% of organisations, as against 50% in the world sample overall.

New Zealanders give the same leading reason for project failure as do overseas participants: unclear and changing scope requirements. In second and third place, however, New Zealand is unusual in blaming poor communications and lack of business buy-in.

“When the average [value of a failed project] from our Asia-Pacific respondents is $US8.9m, we ask ‘what board can easily accept an unplanned write-off of this magnitude,” the report says. Growing demands for accountability and less forgiving stakeholders mean failed projects have a more serious effect today on a business’s reputation.

The KPMG survey comprised 51 questions asked face-to-face of business executives in 15 countries.

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