Project performance – low performance

Low performer projects in IT project portfolio management: Recognize, question, act

Every IT department knows them: Projects that cost more than planned, get delayed or don't bring the hoped-for benefit. But when is it time to question such a project – or even stop it? And how can the project portfolio management be optimized such that resources are deployed sensibly?

Whoever doesn't face these questions risks binding valuable budgets and squandering innovation potential. In this article we show by what you recognize low performer projects, which structured steps you should initiate for the evaluation and how you deal with resistance in the company.
 

How do I recognize low performer projects?

Before a project is stopped or reoriented, it has to be identified as a potential low performer. That sounds simple, but is often a challenge – in particular when clear metrics are missing.

The following indicators point to a project being on the brink:

• Budget overruns: Are the planned costs long since blown?
• Time delays: Is the project clearly behind schedule?
• Quality problems: Are the expected results not reached?
• Low acceptance: Is there negative feedback from stakeholders?
• Lacking strategic orientation: Does the project really contribute to the company strategy?
   

Studies show that up to 30% of ongoing projects are to be classified as low performers[1]. Nevertheless, many of these projects are continued out of fear of wrong decisions or political pressure. But precisely here, courage and a structured decision process are needed.

From the problem to the decision – this is how evaluation succeeds

Once a project is identified as a potential low performer, it's about drawing the right consequences. For that, a three-stage approach has proven itself:

1. Analysis at the department level: The affected business department evaluates the project and examines alternative solutions.
2. Committee discussion: An overarching committee from IT and business jointly elaborates possible options for action.

3. Decision-making: Based on data, strategic relevance and stakeholder feedback, a decision is made about stop, adjustment or continuation.

    

But how does one deal with resistance? Project leaders and teams have often invested a lot of energy in an undertaking and find it hard to admit wrong developments. Here, transparency, early communication and a neutral moderation are decisive. A strong PPM team can take on this role and steer the project evaluation objectively.

Technical support: Without the right PPM tool it doesn't work

Whoever wants to make data-driven decisions needs a solid basis. Nevertheless, only 22% of companies use specialized PPM software[2]. Yet a powerful tool can make the difference by:

• Capturing real-time data, in order to recognize warning signals early.
• Providing KPI dashboards that visualize resource deployment and project progress.
• Using forecast models, in order to identify risks early.
• Enabling scenario analyses, in order to play through various options for action.
   

Companies with modern PPM tools increase their project success rate by up to 28%[3] – an investment that's worth it. But even more important than the technology is the change in the company culture.

The cultural change: Why courage to change counts

The biggest hurdle isn't the decision about individual projects – it's the acceptance of a continuous optimization process. Many companies find it hard to critically question ongoing projects. But only whoever regularly reviews their portfolio stays competitive in the long term.

How does the cultural change succeed?

• Leaders as role models: Management has to actively model that transparency and optimization are desired.
• Trainings and workshops: Employees have to be enabled to evaluate projects objectively and to deal with criticism.
• New incentive systems: Not the project start, but the sustainable project success should be rewarded.
   

Companies that master this transformation can increase their project success rate by up to 40%[4].

Conclusion: Grasp low performer projects as an opportunity

Every company has them – the projects that don't run as planned. But the difference between successful and stagnating companies lies in the consistency with which one acts.

Whoever identifies low performer projects early, evaluates them data-based and acts decisively secures valuable resources for innovations. The combination of a structured decision process, the right tools and an open company culture makes the difference.

Do you want to manage your IT project portfolio more efficiently? grandega accompanies companies precisely with that – with best practices, the suitable tools and years of experience in change management. Let's take the first step together.

Sources:

[1] https://www.brightwork.com/guide-project-portfolio-management 
[2] https://www.itonics-innovation.com/blog/quickly-identify-low-performing-innovation-projects 
[3] https://brainsensei.com/spotting-poor-project-management-techniques/ 
[4] https://www.sciforma.com/blog/the-4-main-challenges-and-solutions-of-project-portfolio-management/ 
[5] „Magic Quadrant for Strategic Portfolio Management”, 25 April 2023 – ID G00770793 
[6] „Toolkit: RFP Template for Selecting Strategic Portfolio Management Software“, 19 January 2022 – ID G00739165