Organizations struggling with project overruns and lackluster returns on investment may discover a surprising solution: cancel more projects. A new survey from project management software company Tempo suggests that a more ruthless approach to project evaluation, coupled with robust scenario planning, can significantly improve overall profitability. The findings, based on responses from 667 project planning leaders, indicate that proactively identifying and halting failing projects is often more beneficial than continuing to invest in them.
While 90% of organizations surveyed reported alignment across teams, the reality often falls short of expectations. Tempo’s research revealed that only 70% of projects ultimately deliver a meaningful return on investment. A substantial 33% or more are cancelled or stopped prematurely, frequently due to misalignment or a lack of demonstrable ROI. This highlights a disconnect between perceived alignment and actual project success, suggesting a need for more rigorous evaluation processes.
The survey data points to a clear advantage for companies that prioritize scenario planning. Those utilizing such software experienced a 17-percentage-point increase in delivering ROI compared to those that did not. Interestingly, the most mature planning processes also correlated with a higher rate of project cancellation. This isn’t a sign of failed planning, according to Tempo, but rather a result of more frequent and thorough project reviews that allow organizations to identify and discontinue underperforming initiatives sooner.
The Power of Early Intervention
The core message from Tempo’s findings is that early intervention is key. Waiting to see if a struggling project will turn around can be a costly mistake. By regularly assessing project viability and being willing to cut losses, companies can free up resources – both financial and personnel – to focus on initiatives with a higher probability of success. This approach requires a shift in mindset, moving away from a reluctance to abandon projects already underway and embracing a data-driven approach to portfolio management.
Scenario planning software, like Tempo’s Structure PPM, plays a crucial role in this process. Tempo offers solutions for visualizing multiple Jira projects, programs, and portfolios in a single view, facilitating better communication and alignment across the organization. This visibility allows project leaders to quickly identify potential issues and make informed decisions about whether to continue, modify, or cancel a project. The company also highlights the importance of understanding project management process groups – initiating, planning, executing, monitoring, and closing – as a framework for consistent outcomes.
Portfolio Management and ROI
The benefits of effective portfolio management extend beyond simply avoiding losses. By concentrating resources on the most promising projects, organizations can maximize their overall ROI. Tempo’s research suggests that the projects that survive a rigorous evaluation process are, on average, more profitable. This underscores the idea that sometimes, the best investment is knowing when to walk away.
The concept of strategic portfolio management is further supported by ReleaseTEAM, which positions Structure PPM as the “#1 Project Portfolio Management solution for Jira.” ReleaseTEAM emphasizes the ability to visualize, manage, and align multiple Jira projects within a single platform.
Looking Ahead
As organizations navigate increasingly complex project landscapes, the ability to make data-driven decisions about project viability will grow even more critical. The trend towards greater transparency and accountability in project management is likely to continue, with a growing emphasis on ROI and strategic alignment. Companies that embrace a proactive approach to project cancellation, supported by robust scenario planning tools, will be best positioned to thrive in this environment.
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