Every project is expected to deliver value to the organization in some way. In addition to the benefits the effort generates, most leadership teams also have a target for the return on investment (ROI) they want the project to achieve. But ensuring each initiative meets its financial goals can be stressful, particularly when very lean groups have multiple efforts going simultaneously. You might not feel you have enough resources to monitor all the metrics that go into overall project performance. Or it may be difficult to find time to pull manual reports out of a legacy system that isn’t built around the needs of today’s project teams.
In some cases, project teams work around their resource crunch by making the ROI analysis a look-back exercise only, rather than assessing progress as the project moves through its various lifecycle phases. Groups sometimes wait to review performance until the invoices are paid and reflect final cost savings or productivity data is ready. Unfortunately, this approach leaves you with some serious blind spots during the project’s active phase. The resulting lack of insight strips you of your ability to implement course corrections mid-project and makes it nearly impossible to achieve your ROI goals.
It’s important to see where projects aren’t meeting expectations, no matter where they are in their lifecycle. You can then review financial performance, resource allocations and consumption, and other elements at the portfolio level to understand which levers to pull to improve your ROI. Should you eliminate a poorly performing project to ensure its decline doesn’t hinder or contaminate other strategically important initiatives? Would changes to your resource management strategy enable you to restore an ailing project to a healthier state?
If you’re struggling to maximize your project ROI, consider some steps that will help ensure your team can keep your projects on track for strong financial performance.
Get access to real-time project data. Even if your team carves out time to review each initiative’s progress and performance during the execution phase, that evaluation can’t deliver true visibility if your data is weeks (or possibly months) old. Look at your portfolio management capabilities and technology tools for ways to apply current information to your project ROI optimization efforts. An on-demand solution designed for project teams will give you additional features such as quick-view dashboards and multi-level reporting options so your team doesn’t need to spend a lot of time staying current.
Use accurate data. One common problem with on-demand data signals is that they may not be as accurate as you need. Some platforms aggregate or roll up information sets that contain estimates or placeholders, for example. The inclusion of potentially imprecise or unreliable data points could cause your team to incorrectly interpret project performance or to implement course corrections that prove ineffective in bringing ROI back into line. You need to be familiar with your data sources and fully understand the integrity of your metrics before using them as part of the portfolio ROI assessment process.
Leverage the right data. You need more than an initiative’s original budget to define where you stand in relation to your ROI goals. Few project teams have access to detailed financial information, and even fewer can quickly get their hands on financial data that is current and broken out by project. This lack of targeted visibility means you only see a portion of your performance picture. Work with your internal stakeholders and your technology providers to pull together the data that matters most. You will better understand your project portfolio’s overall performance and how well each project aligns with its specific financial goals.