Project Portfolio ROI: Thinking Beyond Dollar Signs

Industry research continues to reveal dismally low project success rates. There are many factors that play into this, and the PMAlliance project management consulting teams see a range of reasons why organizations aren’t delivering projects on time or on budget, or why project outcomes don’t meet expectations.


Unfortunately, analyzing the dollars that are lost as a result of these failures doesn’t tell the whole ROI story. There are other elements stemming from poor project performance that reduce the return your company receives from its project investments. Not only is it difficult to gauge these downstream losses when a project is late or when expenditures are high, but the impacts of delays and budget overruns are magnified—and the harm to your ROI is similarly increased—when viewed across the entire project portfolio.

If you struggle to achieve consistent project success, consider where waste and lost opportunities may be hurting your portfolio’s ROI beyond each initiative’s near-term dollars.

Lost productivity

The benefits of improved processes and workflows are an important component in many projects, even if those frontline changes aren’t the primary focus of the effort. When a project is late, end users are stuck dealing with inefficiencies that continue to compound. Something as seemingly simple as navigating glitchy software for a few extra months can eat away at your ROI through lost productivity. Ongoing drains on labor hours then prevent workers from turning their energy toward higher-value work or achieving higher production levels, for example. Over time, this decreases the ROI of your entire portfolio.

Lost innovation

Poor project performance forces your team into a reactive position. You’re fighting fires, resolving a list of last-minute issues that never seems to end, and spending all your time trying to rescue one project after another from failure.

That environment doesn’t provide an opportunity to explore innovative ways to transform your operations and make your business more competitive. Without continuous optimization and the implementation of new ideas, this lack of innovation will prevent your company from capitalizing on the project investments you’ve already made, plus it inhibits your ability to adapt and move ahead as market conditions change.

Lost brand awareness and customer engagement

It’s fairly easy to calculate how a late product launch impacts immediate sales figures, but don’t forget to include the other costs of delays when getting a new product to market. If your item is absent from the marketplace, your name is no longer top-of-mind for buyers. You’ll lose sales now and you may never successfully reengage customers who purchased from your competitors. You miss the opportunity to build relationships with potential buyers and it’s more difficult to maintain a reputation as an innovator when you miss out on prime market conditions.

Lost team morale

Project professionals are known for being self-motivated, high-performing team members. They want every initiative to be successful and they feel invested in their projects. An organization that doesn’t manage its portfolio well lessens the value of team members’ efforts—particularly when their own performance is good but other factors stand in the way of success. Your group’s morale suffers and good performers may explore opportunities outside your organization.

It’s a damaging cycle that’s tough to break, since a drop in morale often leads to sagging performance and further erosion of your company’s ability to successfully execute projects. In turn, it creates a situation where team members are even more challenged to maintain good morale. Over an extended time horizon, you may find it increasingly difficult to achieve the project results you want and even more challenging to get your ROI back into positive territory.

PMAlliance, Inc uses a team of highly experienced and certified professionals to provide project management consultingproject management training and project portfolio management.

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