The reliance on data within project management roles continues to intensify. Reliable information is crucial to every stage of your initiative’s development and lifecycle: planning, budgeting, monitoring, executing, and reviewing. But as project stakeholders find new ways to make use of the growing volumes of data that are available, some have discovered they still have critical gaps in their information.
Even with a lot of data at your disposal, missing elements create the potential for errors and inefficiencies. In turn, these could cause your project’s ROI to suffer. Developing a holistic data strategy is an area project managers need to address if they want to maintain control over their project portfolio’s financial health.
How do data gaps cut into the return on your project investments?
When the information coming into your project team doesn’t cover all the bases, there’s a good chance you don’t know the extent of ROI-impacting problems.
- How long has a particular issue existed?
- Which areas of the project are affected?
- Were additional areas impacted previously?
- Has this problem influenced the project’s ROI?
- If ROI will suffer due to the issue, is there still time to undo that harm?
Beyond your current project, these unknowns could cast doubt on past ROI figures. You may now need to confirm if previously trusted calculations were based on potentially inaccurate and/or incomplete data.
Data gaps also create uncertainty about how deeply a particular issue affects your project’s final ROI. You may not have the information you need to confidently tie schedule changes, cost overages, resource consumption deviations, or other project elements to your financial performance calculations. Attempts to fill in the missing pieces with assumptions opens the door to downstream errors, and these could eventually seep into additional areas of the project portfolio and inflict additional financial stress.
Another effect of missing data is an ongoing struggle to make meaningful comparisons between current ROI projections and those from previous projects. If your historical data isn’t reliable or only tells part of the story, then any determinations about trends in financial performance could be similarly misinformed and misleading. Your continuous improvement efforts may not deliver the best results if you don’t fully understand your project portfolio’s overall health.
Any resolution you implement to get your project’s ROI back on track could be unsuccessful, simply because you lack the insight to know if you’ve truly eliminated the problem. You might go down the wrong path for a long time before recognizing that your fix didn’t work as hoped. And in the meantime, money will continue to leak out of your projects.
The information you do have is less useful when gaps result in a lack of context. Basing project decisions on a standalone metric that seems positive—but in fact isn’t—could lead you down a path that doesn’t serve your project’s financial goals. Maybe you don’t have enough benchmarking data to recognize that seemingly reasonable production rate forecasts are paltry compared to what your competitors achieve. Or perhaps you’re missing context around what does and doesn’t represent waste in your project’s end user training budget. That lack of context could lead to diminished returns on your organization’s project spend.
Your post-mortem reviews will be less effective and less actionable. That means you run a greater risk of experiencing poor financial performance on future projects, too. Will you even recognize all the missteps, overspending, and inefficiencies that exist today? Diligent post-project reviews won’t save you from falling short of future project ROI targets because you don’t have the right information to identify and address the root causes of your financial performance challenges.